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In February, Chipotle faced the most adversity it had seen in its 20-year history. E coli outbreaks affected almost 60 people who ate at the massively popular burrito chain, with many more shying away from the food for fear of the virus. The chain’s previously optimistic financial reports took a turn for the worse, and speculation ran rampant about how the restaurant would recover from the shots to both its reputation and its bottom line.
Chipotle answered that question earlier this week, as it announced its first-ever loyalty rewards program, Chiptopia. The program rewards the chain’s most loyal customers, a segment that had caused the most damage by turning away from Chipotle amidst the health scare. By purchasing a set number of burritos per month (Chiptopia runs from July through September), guests will earn free entrees, Chipotle merchandise, and, for the most fanatical burrito lovers, catering for up to 20 people.
“Our aim in creating this program was to reward our most loyal customers who continue to support Chipotle’s efforts to cultivate a better world,” Chris Arnold, Chipotle’s Communications Director, told Loyalty360. “The rewards are very generous and we think that may appeal to newer customers as well.”
The program’s structure, while not necessarily innovative, is a proven tactic for gathering data regarding purchase history and customer preference. This data can then be leveraged for future loyalty efforts.
“Beyond goodwill on the heels of a turbulent time, Chipotle’s Chiptopia reveals a keen step toward behavioral intelligence,” Ron Rubbico, CEO of Pointillist, told Loyalty360. “The structure of the loyalty system itself identifies a behavioral understanding of its top segment, incentivizing the rekindling of a habit that many consumers fell out of during the health scare. Both the brevity and reward value of the program further urges consumers to act now and renew their bond with Chipotle. Despite recent financial challenges, the inception of a loyalty program will drive engagement and revenue for years to come.”
Not all experts are onboard with the Chiptopia program, with detractors citing the program’s structure and temporary nature as disadvantages in sparking loyalty.
“Free is nothing to create loyalty to,” said Phil Rubin, Founder & CEO of rDialogue. “While Chipotle needs to win back customers, they need to create something more than transactional loyalty, which is all too often the focus of brands these days. They also took an interesting approach in requiring four visits in a month for the free burrito, which is likely only addressing the top decile or quartile of their customers. While that’s going to go far for the high end of their base, they likely retained a lot of those customers anyway.”
"It’s an interesting move for Chipotle who just last year declared that a traditional loyalty program was not a fit for their brand,” added Bob MacDonald, President of Bond Brand Loyalty. "As they recover from the food poisoning crisis, I give them credit for testing the loyalty waters but this short-term program feels more like a frequency rewards campaign to acquire new customers and win back others who defected to competitors like Panera. My watch out for Chipotle is that they should be focusing on building back trust to their brand instead of building loyalty to transactional-based rewards and free burritos.”
In many ways, Chipotle is facing the biggest test it has seen yet. Its once sterling reputation has been tarnished by an undoubtedly scary health crisis, and it’s only now that we’ll see the brand’s ability to respond, recover, and get people back to their burritos.
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