Nuts & Bolts - Case Study : Dairy Queen’s Loyalty Blizzard

Challenge: Acquire loyalty program members.
Solution: Launch a text-based, near-field communication mobile loyalty program.

International Dairy Queen franchisee Dave Reasner wanted a blizzard of customers to join his loyalty program.

He got his precipitation: By the end of his pilot mobile loyalty rewards program, nearly 1,000 customers became members. Not too shabby, considering he targeted the 12,000-resident-strong community of Rochester, Ind.

As small a town as Rochester is, though, its consumers have choices. Three years ago when Reasner hired fellow Hoosier firm, Tetherball of Indianapolis, to create what would become a pilot near-field communication (NFC) mobile program, he was mainly thinking about growing his business by luring smart consumers away from his competitors during a down economy.

"Our main thrust was to build a loyalty program and a base of customers that would get rewarded, periodically, for coming to our store," Reasner says.

So he started adding "bag stuffers," or literature about the loyalty program, to every order—whether customers entered the Dairy Queen or just used its drive-through lane. "We bribed them, if you will," says Reasner, "by 'Sign up with our program and you get a free Blizzard.'"

Soon, customers were sending off their short codes to opt-in to receive text messages. Part of it was due to that Blizzard coupon—the calorific blended ice cream treat worked wonders. Already his most popular item, the $4 dessert ended up being one of his main offers.

"A good summer day would be what we would call a 'Blizzard Happy Hour,'" he says, recalling how sending out a text message at 11 a.m. would yield 4 percent to 6 percent redemption rates between the 2 p.m. to 6 p.m. offer "hour."

Reasner says the Blizzard Happy Hour performed well year-round.

Overall redemption rates ranged from 1.5 percent to 9 percent, depending on how "aggressive" he made an offer. Reasner says the NFC check-ins—where customers would visit a kiosk at the Dairy Queen and print out coupons—worked really well for word-of-mouth advertising.

"People would be in line [and ask], 'How'd you get that free cheeseburger?'" Reasner explains. "'Oh, I'm a member of their loyalty program.' So then it would prompt sign-ups."

• MORE ON
• ONLINE MARKETING