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Officials at Panera Bread have successfully followed a path of customer loyalty that has enhanced the brand’s image and value among its customer base.
During Panera’s recent third-quarter earnings conference call, Ron Shaich, company chairman and CEO, talked about strategic maneuvers.
“Many years ago we foresaw the forces reshaping the restaurant industry and conceived a strategic plan to capitalize on them,” Shaich said. “Recognizing the potential of digital, we built Panera 2.0, a comprehensive guest experience platform enabled by digital. Recognizing the increasingly omnichannel nature of commerce, we accelerated our growth of catering, delivery, Rapid Pick-Up, and Panera at Home. Recognizing the changing nature of competition, we enabled innovation in food, marketing, operations, and design. Consistent with that intent, we saw the growing importance of wellness and doubled down on our commitments to transparency, clean food, and having a positive impact on the food system. Further, we recognized the power of loyalty and created a program (MyPanera Rewards) that is now the industry’s largest and arguably most impactful. While others in the industry are just now recognizing and beginning to tap into these themes, I am pleased to say that Panera is years ahead in our efforts and we believe we are well positioned for long-term success.”
Third-quarter comps rose 3.4 percent and two-year comps are up 7.2 percent.
Is Panera taking the right path to true customer loyalty?
“We’ve heard the question from our clients who have taken note of Panera’s approach that’s built upon unpublished, surprise-and-delight type offers and rewards and wondering if this approach is perhaps a good one for their business,” Clay Walton-House, principal and lead of Customer Retention & Loyalty Practice at Lenati, told Loyalty360. “Our response is often—‘perhaps, but not exclusively so.’ The ability to target offers and rewards can provide greater leverage to the business, choosing on whom to spend the money to grow customer value, and building a deep capability around offer optimization.”
But, Walton-House said, targeted offers alone “leave a lot to be desired in terms of leading, innovative program designs for loyalty.”
Panera has a few different angles to enrich the MyPanera rewards program, looking to potentially integrate with the Panera at Home experience, mobile order features already existing in its mobile app or potential food delivery services, he noted.
“Brands that tie utility-based features and experiences to rewards membership often get a greater lift in the program itself, rather than relying purely on offers alone,” Walton-House said. “Panera Bread has a good backbone upon which to build, and a lot of the right assets in place already in the mobile app. The question is whether it will expand the vision of the rewards program as more than an offer engine, and enhance the member experience in doing so.”
Meanwhile, Stellar Loyalty CMO Narina Sippy believes Panera has demonstrated that a well-executed brand strategy, tightly aligned with customer loyalty and experience programs, can reap dividends.
“The company has built a strong brand value around the concept of ‘food as it should be’ and extends that value through its end-to-end mobile customer experience -- with enjoyable and easy browsing, order recommendations, convenient dine-in, or pick-up – all while delivering personalized surprise-and-delight rewards to its most valued customers,” Sippy explained. “This heightened focus on customer loyalty and brand value are why Panera is pulling ahead, while others are struggling.”
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