Loyalty 3.0 – The Rise of Distinctive, Personalized Loyalty

Rote loyalty programs are a dime a dozen.
Thanx is on a mission to make it easy for brands to stand out from the crowd.
Image showing the loose concepts of personalized, non-discount loyalty including secret menus and reward marketplaces

Loyalty doesn’t have to be about expensive discounts and rote rewards. At least, not anymore, thanx to our latest platform announcement. With our new platform, brands will be able to offer secret menus, special events, golden tickets, charitable donations, personalized challenges and a whole lot more.

A Brief History of Loyalty

Loyalty 1.0: The era of rote rewards

Years ago, retailers interested in driving frequency and spending implemented basic rewards programs, for example, spend $100, get $10 off. When properly implemented, these programs drove material business impact. As guests got close to reaching a reward, they increased their spending and came in more frequently which in turn resulted in more revenue for the business.

Loyalty of the past, Loyalty 1.0, images with 3 generic coupons and discounts

Despite these potential benefits, many businesses hesitated to adopt loyalty programs. They worried that discounting would impact profitability, cheapen their brand and attract discount seekers. 

Loyalty 2.0: The era of segmented marketing

Over time, the brands that got caught up in a cycle of ongoing promotion, started to realize how expensive it was. So they started to look at ways they could optimize that spend. They started to segment their customers and deliver rewards to their most valuable customers or those who really needed a reason to come back. They set up 30-day lapsed guest campaigns, sent messages to breakfast guests trying to get them to come in for dinner, and rewarded VIPs with 20% off.

3 similar discount interfaces that are segmented to 3 slightly different audiences to represent Loyalty 2.0

And this more targeted marketing had a big impact on their outcomes. Promotion costs were reduced and marketing ROI on campaigns improved. In fact, revenue per customer on targeted campaigns is 6x better on the Thanx platform across our customer base. But this big leap forward is still not enough for restaurants to be successful in the future. 

Here’s why.

Digital ordering changed the game

COVID accelerated an already rapidly growing trend in digital ordering. More than ever, consumers are opting for the safety and convenience of placing orders online.

Growth of digital ordering in U.S. restaurants

Line chart showing the large growth of digital restaurant ordering in the U.S. caused by COVID-19
Source: Edison Trends via McKinsey & Company

Digital order fundamentally changes the give get when it comes to loyalty enrollment. When all you are asking customers to do is use a tool you have built to make a digital purchase, your ask is much less and, in fact, there is a convenience that comes with it that incentivizes them. Loyalty enrollment and participation is about getting customers into a digital flow instead of a sign-up process fraught with friction. What we are talking about is loyalty that moves away from offers and instead is about creating lifetime value.

At the same time, the third-party delivery companies have changed the competitive dynamics. What used to make a restaurant competitive…the ambience, the real estate, the customer service, none of that matters when the customer is sitting on their couch at home. What’s more…the product that’s available to them across these different channels is the same.

3 mobile app screens highlighting how similar apps are between restaurants and their third party delivery competitors

The third-party delivery apps, like DoorDash, all have the same food that you do. So when the product that you offer is the same – even the picture of the food is the same – the only way to compete is to know who your customers are and give them a reason to order direct.

Loyalty 3.0: The rise of distinctive, personalized loyalty

The future of loyalty, highlighting 3 example use cases including secret menus, golden tickets, and reward marketplaces on a spearmint background

In order for consumers to have a compelling enough reason for order directly, restaurants still need to offer an incentive. But that incentive doesn’t have to be a costly discount. Now don’t get me wrong, there still has to be a value exchange. But that value exchange doesn’t have to be devaluing for the brand. In fact, when done correctly, the benefit can and should create an emotional connection that inspires a long-term relationship. 

But that’s not all. Consumer expectations are at an all time high and the way that brands facilitate that engagement with the guest must be distinctive and authentic to the brand. And what’s more, it has to be relevant to them. When everyone is doing digital and everyone has data, to be competitive, you have to activate data across every touch point including not just the rewards that consumers receive but also the triggers that earn progress. And lastly, the program needs to be easy to implement and straightforward to change as you learn about what matters most to your guests. This is the future of loyalty. 

The winners in this new normal will harness their digital data and activate it with a distinctive, personalized and on-brand approach. It is with this context that we are excited to announce the launch of the Thanx 3.0 Loyalty Platform, a year-long R&D initiative delivering advanced loyalty that enables three key differentiating capabilities:

  1. Distinctive – allows brands to offer creative, on-brand programs that go beyond rote rewards to offer non-discount, experiential, and bespoke communications.
  2. Personalized – goes beyond the one-size-fits-all programs to add loyalty as unique as the individual.
  3. Self-service – makes it easy and straightforward for brands to set up and evolve their programs as they learn what works.

To learn more about our new loyalty platform, watch the Sneak Peek video here:

Watch our virtual event, “Loyalty 3.0 – Free Your Brand from Discounts and Generic Rewards” with industry leaders from Chipotle, Hodpoddy Burger Bar and PINCHO.

Watch the webinar