After Chiptopia: Where Does Chipotle Go After Its Summer Loyalty Program?
By this point, you’ve likely heard of Chiptopia Summer Rewards. Chipotle's seasonal loyalty program, which just ended, has created some serious buzz among consumers, marketers and the media. However, as its end date fast approaches, the question remains — has Chiptopia done enough to increase long-term customer loyalty for Chipotle?
The short answer — probably not.
But there is potential, and perhaps some momentum, suggesting that Chipotle could turn the summer promotion into a successful loyalty program.
First things first: Chiptopia is not a loyalty program but a promotion. The short-term initiative is not really designed to build long-term customer loyalty, but to help drive customers back into the restaurant after well-publicized food safely issues caused a decline of almost 30 percent in same-store sales in Q1 2016. The Chiptopia promotion was probably the right strategic move; its first priority must be motivating defecting customers to try Chipotle again. You can’t focus on nurturing long-term loyalty until store traffic returns to something more like normal.
There is evidence that Chiptopia has brought many formerly loyal patrons back to the restaurant. That’s a good start, and suggests that the rewards — free meals after the fourth, eighth and eleventh visits in a month, along with the opportunity to earn catering services and other bonuses — were motivational for a fair number of customers.
If Chipotle wants to leverage the modest success of the summer loyalty promotion, they might consider rolling out Chiptopia (a brand-appropriate and fun name, by the way) as a long-term loyalty program. To do so, the brand would need to move beyond a promotional approach and leverage the engagement driven by the summer program.
The key to a successful loyalty program is customer data. Programs use data analytics to understand and anticipate customer needs and tailor offers, messaging and content to deliver personally relevant value to each customer. It doesn’t appear that Chiptopia is integrated with a Chipotle customer database. This limits the brand’s ability to effectively target shoppers, moving forward. Creating an integrated customer database would be an easy way for Chipotle to both engage with customers on an ongoing basis, and improve the guest experience.
Here are some best practices Chipotle should consider if it wants to turn Chiptopia into a long-term relationship tool that drives incremental customer lifetime value:
Capture and Use Customer Information
Loyalty programs are one of the most effective ways for companies to learn about customers in a permissioned environment. Key data points usually include transaction data, demographic and household information, personal preferences — and the all-important information that turns traffic into addressable individuals: name, email address and phone number.
Integrate Loyalty Efforts Across the Holistic Customer Experience
Customers should be identifiable — and be recognized for their loyalty — across all touchpoints. Point of sale, online, email, mobile and social channels should deliver unified messaging. All channels should make use of the data collected by the loyalty program. Simple features can mean a lot for the customer experience — like ensuring that a single customer ID can be used to log in or identify the customer across disparate touchpoints. For example, guests already enrolled in Chipotle’s text alert program should be able to use the same login to access Chiptopia, facilitate ordering and enable other interactions.
Ease-of-use is a major contributor to program success, and in most cases this means going mobile. Two-thirds (64 percent) of American adults own a smartphone and they expect loyalty programs to leverage that technology. Mobile capabilities open brands up to powerful marketing tools, like real-time alerts and geolocation-based offers.
Today’s most successful loyalty programs — think My Starbucks Rewards or Walgreens Balance Rewards — solve multiple programs with a single integrated loyalty app, creating a positive and seamless user experience. A great loyalty app should allow customers to earn and redeem rewards in real-time, place orders, pay for their orders, receive customized offers and content. Starbucks even entertains its app users, allowing them to stream music for free. Starbucks credited Starbucks Rewards with creating 5 percent growth per quarter for 25 quarters in a row for 16 percent annual growth. The streak ended only when Starbucks stumbled on executing its re-launch earlier this year.
Chipotle could use a loyalty app to foster long-term relationships with shoppers via games, personalized content, unique deals (i.e. skip the line at checkout/exclusive offers), etc. A robust loyalty app would help turn guest engagement into measurable ROI.
— Chipotle (@ChipotleTweets) October 10, 2016
A strong and differentiated loyalty effort can be a major component of success in the highly competitive QSR environment. Key demographics like Millennials already exhibit a clear preference for loyalty programs (80 percent of Millennials participate). Today’s consumers across all demographics increasingly demand a well-integrated, personally relevant, valuable and seamless experience.
Chiptopia could be a good start for the recovering restaurant brand. The promotion has enjoyed some success in revitalizing guest traffic. Only time will tell if Chipotle follows through with the strategies, tactics and commitment that drive long-term customer engagement.