For Sandy Nelson, Director of Marketing, Duffy’s Sports Grill, a digital experiment with its highly popular and successful MVP customer loyalty program earlier this year taught company officials a great lesson.
From April 1 of this year through Sept. 30, Duffy’s Sports Grill expanded its Paytronix-powered MVP loyalty program to include mobile check-in, mobile sign-up, and real-time messaging capabilities.
With check level data and other metrics provided by Paytronix’s POS-integrated solution, Duffy’s is able to strategically design messaging, offers, and promotions tailored to each program tier’s behavior.
“We went from April 1 through Sept. 30 with the digital methods and just got the paper applications in the stores on Oct. 1,” Nelson told Loyalty360. “The registration rates improved instantly, back to our normal levels.”
During that six-month stretch, Nelson learned how many of its MVP members weren’t ready for the digital enhancements to the loyalty program.
“This was a very interesting experiment for us … taking a well-established program and changing the rules is always tricky,” Nelson explained. “We eliminated the paper application we have used for over 10 years and switched to three different digital ways to join the MVP program – either via text, mobile app, or website. Upon launching the digital registration methods, we tracked the progress of the program very closely.”
First, Nelson said the amount of accounts activated dropped by one third.
“We expected to see less, however, as a tradeoff for more quality data, we were willing to accept this,” Nelson said. “We did not expect to see such a huge drop– it was over 30% less people joining the program. The next phenomenon was completely unexpected. The members signing up with the new digital methods were not earning points as compared to our old method. It looked like the sales associated with new registrations dropped by 50%. We attribute this to a few different things–guests could join without being in the restaurant so they may not have made a purchase. Also, it was perhaps confusing for the guest who joined via text or mobile app in the store to understand that they needed to generate the “check-in” code and relay it to their server to earn the points. We also think that without the plastic card in their wallets, guests may have forgotten to earn their points when they did visit. Nonetheless, after seeing both registrations and MVP spending plummet in the first few months with the new method, we decided to reinstitute our handwritten application process.”
Going forward, Nelson said it’s important to continue to offer actual plastic MVP cards to MVP members and ensure that Duffy’s captures the
basic guest information, including email, upon registration.
“We will continue to use the “text to check-in” feature, which allows existing MVPs to earn points and redeem rewards without presenting their cards,” Nelson said. “This is simply an option for guests and we have seen this feature continue to grow in popularity as both servers and MVP members become more familiar with how it works. We will also utilize the digital registration method for campaigns to grow our membership via social media and/or through advertising on the web in the future. It will be an excellent tool for us to reach potential new members efficiently who aren’t in our restaurant–especially in conjunction with new store openings.”
Michelle Tempesta, Director of Marketing for Paytronix, told Loyalty360 that not everyone will engage with a cardless loyalty program.
“It depends on the company’s target audience,” Tempesta said. “The digital engagement through a cardless program usually is more successful when the target audience is Millennials.”
Since Duffy’s returned to its traditional paper enrollment program, Tempesta said it’s given the company its base back along with incremental gains.
“You use the tools that make the most sense for your audience,” Tempesta said.
In retrospect, Nelson said the changes were “too revolutionary for our mature and wildly popular program,” but adding the new digital capabilities gradually will make the most sense.
“We hope to continue to offer multiple ways for our MVPs to interact with the program–we will just be a little bit more cautious when completely changing the systems that have worked well for us over the past 10 years,” Nelson said.