Marketing

Loyalty programs boosting visits, customer spend

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October 5, 2021

Loyalty programs can consistently boost site visits and spend by 18% to 30% per member, according to the Paytronix Loyalty Report released from Paytronix Systems Inc.

Loyalty members spent an average of 6% more, per visit, than non-loyalty members in 2020, according to a press release on the findings.

The report examined restaurant and convenience industry trends, including trends in visits, spend, member demographics and program types.

Additional findings from the report include the following:

• The top 10% of loyalty members accounted for more than half of all loyalty spend at their favorite brands for eight months of 2020.
• Ice cream and coffee brands had a banner year in 2020 despite the pandemic, realizing on average a 7% increase in visits and a 26.5% increase in spend.
• Convenience stores saw a 10% increase in average spend per visit despite a decline in fuel sales.
• Spend per visit increased across convenience stores and all restaurant segments.

"During a tumultuous 2020, loyalty programs shone through as one of the key survival tools for brands in the restaurant and convenience industries," Andrew Robbins, CEO of Paytronix Systems Inc., said in the release. "The best programs are those that look beyond simply enticing customers with offers and leans into the idea of personalizing the customer journey. In this way a loyalty platform is part of a broader guest engagement strategy that touches all parts of the guest experience, whether that's digital, physical or a combination of both."

The report stated that "critical mass" for a loyalty program is reached at about 15% penetration, the baseline brands should strive to achieve one year after launching a program for the first time. At this level, the program is producing material results: enough to make a noticeable difference on the top line, according to the release.

Excellent performance falls between 25% and 35%, while top-tier brands can reach penetration rates of 50% or even 70%. Panera Bread, according to the release, represents one of these successful brands: the fast-casual has a 50% penetration rate and 40 million loyalty members — twice as many loyalty members as Starbucks.