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Starting in 2010, a new generation of millennials became the largest group of consumers for fast-food and fast-casual restaurant businesses. All market players, including Pizza Hut, started to focus heavily on building their customer loyalty and created a marketing strategy around the needs of this particular group. During the same period, restaurant businesses in Russia became more competitive due to new local players and global brands entering the market.
During 2010-2014, Marina Mirokhina, marketing manager for Pizza Hut Russia, said the pizza chain’s solution was based on straightforward tasks to meet millennials’ needs and win customer loyalty in an oversaturated market.
But in 2015, Pizza Hut launched a mobile loyalty program aimed at millennials. Loyalty360 talked to Mirokhina about the progression of the program.
What factors prompted the launch of Pizza Hut’s mobile loyalty program in early 2015 and how has it progressed in the past two years from a customer engagement/membership standpoint?
Mirokhina: During the last two years (since 2015), our program has raised from being a simple marketing tool to becoming a really huge platform of customer engagement. Having a mobile platform gave Pizza Hut a great advantage to analyze the consuming behavior of our guests and to more deeply understand their insights. Based on this knowledge, we adapted our “traditional” marketing and communication strategy to match customer needs and finally, it worked. This personalized communication from our brand to different segments of our guests brought a measurably successful response from the audience. Now we can say confidently that members of our loyalty program are open to speak and interact with our brand.
Millennials were one of your main targets. Can you talk about their engagement with the program?
Mirokhina: Millennials are the biggest group of our members of the Pizza Hut program (around 70 percent) and, at the same time, they are the most active users. It is easy to speak with them through the mobile app because it’s their common language, and most of our promo campaigns in mobile app are focused on this audience.
We always try to create some real-time promotions to engage them in our brand. For example, the most effective for us was called “Christmas lottery” within the mobile app, where every user could receive an electronic lottery ticket after each visit and have a chance to win thematic winter time super prizes for youngsters, such as a snowboard, GoPro camera, and so on. We did not attract any paid media for the campaign, but the redemption rate without any additional spend was almost 50 percent. Before the launch of our loyalty program, we never could reach the same indexes just relying on customers’ engagement.
Another good example is football games. Through the mobile app, we offered guests of particular restaurant locations to visit us during TV football matches and get their second beer for free. After usage of this mechanic for several months, we succeeded in making this offer really popular and keep it now as our traditional offer. Today there is no shortage of transactions during football games, our millennial customers come to our restaurants to watch the game without an invitation. And this is how the loyalty program turns customers’ behavior into a real loyalty.
What makes the program unique?
Mirokhina: For Pizza Hut, it’s not just a usual reward system we deploy, but a real platform for engagement and communication. We can describe the uniqueness of the program from three different points of view. First of all, from the business side, the outstanding feature of the program is high efficiency. The ROI for the project is impressive and is saves a lot costs for paid media. From our marketing team’s perspective, the program is flexible and can be adapted to changes happening in external environments and with changing market trends. In cooperation with our partner, LoyaltyPlant, we work daily on new features and promo mechanics for the program to increase engagement of users and continue to grow our results. From the customers’ side, it’s very user-friendly and the easiest way to communicate with our brand. They prefer this channel of communication more than any other over the past two years.
What are some of your main learnings from the first two years of the program and what behavioral changes have you seen in customers?
Mirokhina: The key learning for Pizza Hut was that our guests are really open to interacting with our brand when we send the right communication to them. They are ready to do a lot for a little, we just had to find the correct approach to ask them. For example, we increased the number of transactions when the whole market was in crisis without the use of any huge advertising campaigns, but just through using the right communications with the right customers. In the program’s beginning, most of our “heavy users” reacted the best to free gifts in the mobile app, and we used this mechanic to drive extra transactions. But today, after two years, we notice that the same audience segment doesn’t show the same reaction for such gifts, but they are quite interested in some of the events we provide inside of the restaurants. As a result, they turned their occasional visits with us from coming in only for simple gifts into visiting and experiencing a real interaction with us.
What do you see for the future of the program?
Mirokhina: Our market now is still growing and we survive in a very competitive environment, so of course we have to pay attention to all market trends and match all the latest technology and marketing innovations. We are satisfied how the Pizza Hut loyalty program works with customers during and after their restaurant visit, but we would like to add some possibilities of gamification into the application to make people use it even before they visit our restaurants. We think this full-time interaction with customers can help us to gain a new step of loyalty.
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