November 07 2017
Americans spend close to $100 billion yearly on fast food, and half of them eat out at least once a week. McDonald’s alone opens its doors to 68 million people every day.
But studies show that fast food customers feel little loyalty towards chains; competitors can easily lure them away. There’s also the challenge of low-cost switching. Unlike their loyalty to a specific coffee shop or clothing brand, customers don’t stick to just one fast food option.
Fickle customers have been a fact of life for fast food for many years, but in the internet age, these habits are spreading to new industries. Learning how fast food companies deal with today’s disloyal customers can show the way for other verticals.
Personalizing mobile apps
In apps, “personalization” often means creating tools for the customer to set their own preferences. True personalization, in which the app proactively adapts to the customer, is more rare. That’s how Chick-fil-A keeps its customers coming back, with an app that revolves around the user’s everyday habits. Menus change based on history order, routine, and preferred locations. The app also adjusts depending on the user’s allergens, and makes checkout more convenient through simple in-app payments.
Chick-fil-A’s efforts toward personalization and service help the chain rank high on customer satisfaction, and earns them the highest average sales per restaurant, selling three times as much as its competitor KFC.
Not your usual loyalty programs
Taco Bell’s app gamifies loyalty programs with a feature it calls Explore. More than 60,000 users participated in the first round, sharing various photos including those that weren’t related to Taco Bell at all. “We are actually just rewarding people for living their lives,” said Tressie Lieberman, Taco Bell’s VP of digital innovation. The prizes range from a free frozen drink to a visit to Taco Bell’s famous test lab in Irvine, California. “Loyalty is all about connecting with consumers. We want to reward with more than free food,” says director of digital innovation Lawrence Kim in an interview with QSR Magazine.
Fast food’s biggest demographic is young people, ages 18-29. To connect with this segment, brands need to offer unique content with a social component.
Track social media conversations
When Pizza Hut saw Hypixel — a popular Minecraft-content platform — ask its 290,000 Twitter fans what they thought about fries on pizza, they knew they had a rare opportunity on their hands. The brand reached out and let Hypixel know about their poutine pizza. The resulting exchange resulted in over 1,000 mentions on social media.
By keeping their ear cocked for trends and mentions, fast-food brands can discover opportunities to inexpensively reach an engaged audience, as well as intercept disgruntled customers before a bad tweet or post goes viral.
The value of honesty
One of the biggest criticisms faced by Domino’s was about the quality of its pizza. Sales declined until the pizza-delivery pioneer reached its crisis. Finally, instead of ignoring its problems, the chain launched a much-publicized Pizza Turnaround campaign. The brand openly rebranded and researched how to improve the quality of their pizza, as well as launched self-deprecating marketing campaigns. Customers responded well to the transparency, and Domino’s saw better revenue and a 400% increase in its stock price over the next three years.
Customers trust businesses less than they did 20 years ago, and honesty is often a deciding trait when customers switch brands. Transparency will help fast food chains win customer loyalty, and maybe even entice new customers to try their food.
The future will bring even more changes to customer loyalty, with younger generations more accustomed to searching out information and competing options. But these changes don’t have to be negative: the best fast food companies have simply realized the need to outperform competitors on new fronts.