Tag: reward program

Loyalty Program Review: Chipotle Rewards

Posted on

Chipotle, the fast-casual restaurant chain specializing in Mexican food, has launched a new loyalty program called Chipotle Rewards. The company is currently beta testing the program in three markets: Phoenix, AZ; Kansas City, MO/KS; and Columbus, OH, and plans to roll out nationwide in 2019. For this week’s blog, I thought it would be fun to do a professional review of the new program using the five criteria for assessing loyalty program value I wrote about previously.

First, a few details about Chipotle Rewards. The program is free to join. Members earn 10 points per $1 spent at its restaurants or through catering orders, and 15 points per $1 for orders placed via its website or mobile app. There will be bonus actions consumers can complete to earn additional points. Once a member accumulates 1250 points, those points can be redeemed for a free regular-priced entrée item. Rewards expire after 60 days. Till Nov. 21, 2018, the program is offering a joining incentive of a free order of Chips & Guac after the new member makes the first purchase under the program. Let’s take a look at how this design stacks up against the five value criteria.

Criterion #1: Cash Value

In my geographic area, a typical entrée on the Chipotle menu costs about $7~$8. Together with the point earning ratio of 10 points per $1 and a reward threshold of 1250 points, we can calculate the reward ratio to be ($7~$8/1250)*10 = $0.056~$0.064 per dollar spent (or 5.6%~6.4%). This reward ratio is pretty high compared with a typical credit card reward program, but how does it compare with other restaurant loyalty programs? Chipotle’s direct competitor, QDOBA, also runs a loyalty program called QDOBA Rewards. The program requires 3000 points for a free entrée priced at the $8 range, with lower thresholds for cheaper items. The earning ratio for QDOBA Rewards is the same 10 points per $1 at the two lower tiers (Recruit and Apprentice), and goes up to 15 points per $1 for the Pro tier and 20 points per $1 for the highest Champ tier. Putting these numbers together, it appears QDOBA Rewards has a base reward ratio of about 2.67% for the two lower tiers, and 4% and 5.33% for the two higher tiers. Comparatively speaking, Chipotle Rewards offers a higher cash value. However, considering the bonus points per visit offered to higher-tier members of QDOBA Rewards, the two programs are more comparable in cash value at the higher tiers. Continue reading “Loyalty Program Review: Chipotle Rewards”

John Hancock’s New Reward Program to Life Insurance Customers

Posted on

I offered my tiny two cents today in an NPR Marketplace story about a new rewards program by John Hancock for their life insurance customers. Under the John Hancock Vitality Program, customers can receive discounts and free rewards for making healthy lifestyle choices. These choices are recorded through smart wearables such as Apple Watch and Fitbit. Since this is a very loyalty program-relevant topic, I decided to repost the radio segment below, followed by a list of the pros and cons that I see in the program.

Pros

  • The activities rewarded through the program are things that consumers should be doing and are beneficial to them. So the program is high on both relevance and aspirational value.
     
  • Since most activities are automatically tracked by smart devices, the program is also quite convenient to participate in.
     
  • Most importantly, from a branding perspective, the program turns a negative event driven product into something positive. Customer interactions surrounding life insurance (and most other types of insurance) policies are typically motivated by an unfortunate negative event. This program focuses on the good and creates positive connection between the brand and the customer. It also greatly increases the frequency of brand-relevant interactions with customers.

Continue reading “John Hancock’s New Reward Program to Life Insurance Customers”