There's a sweet spot somewhere between hard-to-earn loyalty rewards and giving them away too readily. Make perks too easy to attain and they start to feel worthless. Make them too difficult and most customers will give up on the thought of them.
Few companies have nailed the rewards system perfectly. Many airlines, for example, have tinkered with their loyalty program as customers are flying more frequently, leaving some rewards seem unattainable.
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Others, however, have nailed the promotional system. Ulta Beauty, for example, has a good program since it's easy and incremental. Customers earn one point for every dollar they spend. It's simple, rewards loyalty, and is easy to accumulate (250 points, for example, is $8 off, which is pretty good as far as perks go).
But the food business has largely struggled for a standout rewards program.
Affiliate programs, like American Express' Gold Card, give cardholders 4x points on restaurants and take out. Uber has a burgeoning program that rewards users for riding and ordering, but it's only available in certain regions. And plenty of us probably have those business card-sized loyalty cards shoved into our wallets from our favorite deli, cafe or ice cream shop with a few stamps on them (I'm so close to getting that free kid's cone - just eight more stamps to go!).
The difficult factor, of course, is that restaurants are limited with what they can offer. How much Jimmy John's are you really going to eat to earn that free sandwich?
Dominos Steps Up Its Loyalty Rewards Program
The exception here is pizza, which is often enjoyed in groups. The impetus isn't on you to eat a whole pie, but if you're ordering it, you're earning the loyalty rewards. Domino's (DPZ) -) recognizes this and is tweaking its loyalty program in the months ahead.
CEO Russell Weiner told analysts and investors on the Q2 earnings call that rewards will soon come easier to customers.
"I want to talk about another important initiative for us, the new and improved loyalty program that we'll be launching in the U.S. in September of this year. The program will reduce the requirements to earn and redeem loyalty points. This will positively impact our carryout customers as well as help us retain our current and new delivery customers," Weiner said.
He didn't specify exactly what changes are coming, but he did say the new and improved plan offers "more ways to reward customers with our new loyalty program."
Weiner also recognized that sometimes, lower prices make it harder to earn rewards.
"Usually, as a customer, I'm on the short end. A new loyalty program for a company usually means they're trying to drive a little bit more profitability, which means things are taken away from me as a customer. We're doing the exact opposite here," he said."
"One of the things that's going to be true in the new loyalty program is we're going to recognize that a carryout customers' ticket is lower, and so the hurdle for getting points will be lower," he said, adding Domino's is trying to engage the customer, no matter where the point of sale takes place.
Currently, Domino's Piece of the Pie rewards program gives customers 10 points for every order. 60 points earns you a free pizza.
"And our current program, you need 60 points, there'll be points at various levels from a redemption standpoint," Weiner said.
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