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04.27.17

Recapping the Restaurant Leadership Conference: Loyalty, Delivery Fees, And Customer Service

by Jayson Truttmann

At T3, we strive to make brands more useful. In other words, we don’t build products or provide services just for the hell of it. Our work, to meet this baseline, must provide value to both the business and the consumer. This is why our most recent endeavors are defining and modernizing loyalty programs – bringing more value to the business by giving consumers what they want, in a way that makes them feel like they’re winning. This builds real loyalty.

After publishing our Modern Loyalty Report, we traveled to Phoenix for the Restaurant Leadership Conference (RLC). We chose this event because almost all major quick serve restaurants (QSR) and casual dining brands have some form of loyalty membership, but few of these programs are seen as useful by their targets.

In fact, according to our research, 59% of millennials quit restaurant loyalty programs because rewards “aren’t valuable.” And 52% of millennials want to use their mobile devices to take advantage of loyalty programs. Seems like a smart place to invest, right? Make something valuable and accessible in a way that meets the expectations of your consumers. So, why don’t they?

The RLC was a perfect place to gain insights on these pain points. After many thoughtful panels, lively happy hours, and one massive (300 cart group) round of golf, we headed back to Austin energized by the idea that loyalty is an increasingly common talking point in the restaurant industry, and many brands are ready to embrace the shift toward more modern and useful programs.

If you weren’t able to attend, here’s a recap by Peter Romeo, Digital Content Director of Winsight Media, on the main takeaways from the conference:

One of the events on Day One was a tour of local restaurants, including a Firehouse Subs unit. Chain CEO Don Fox was on hand to answer visitors’ questions about what the chain has learned from its recent foray into delivery via third-party services. Attendees wanted to hear, in particular, about who was getting the blame from customers for botched orders.

Patrons have become so familiar with the delivery process that they can now read who might be at fault, said Fox. If an order wasn’t accurate or something was left out, the restaurant gets the blame. But if a utensil wasn’t included, customers are now smart enough to realize it was the delivery service.

An executive of a California Pizza Kitchen franchisee noted that store managers are also getting savvier. If a particular driver has a history of disappointing customers, the restaurant just won’t deal with him, the exec explained.

Fox expressed amazement that third-party services haven’t yet realized they have the potential to deliver a powerful payback to the restaurants whose food they haul, to the benefit of both parties. As he explained, those services collect a ton of data about who is using the ordering component of their systems—how many are first-time users of a chain, what they typically order, how much they order, etc.

Mining that data, he explained, would yield tremendous insights, not the least of them being whether a 20% or 30% delivery fee is worth the cost. Fox noted that one of Firehouse’s franchisees regards that charge as a marketing fee, since the patrons often try a delivered Firehouse sandwich first, then subsequently pop into a store. The franchisee makes a point of talking to guests, so he’s able to make a connection with those new customers, a benefit that’s worth kicking back a third of the sale.

To read the entire recap, visit RestaurantBusinessOnline.com

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