New research conducted by Circana, LLC sheds light on the dynamics of restaurant loyalty programs, revealing that membership does not lead to exclusive brand loyalty as commonly presumed. The study, which analyzed longitudinal receipt data from four of the largest loyalty programs in the United States, found that loyalty members visit an average of 20 different restaurant chains over the course of a year, mirroring nonmembers in terms of brand variety. However, these loyalty participants significantly increase restaurant visit frequencies, leading to a notable 22% higher annual visitation rate compared to their nonmember counterparts.
The findings also illustrate that while loyalty members do not solely patronize one brand, they have a marked preference for the brands they are associated with, visiting them at double the rate of nonmembers. Specifically, loyalty program participants allocated 8% of their total restaurant visits to their enrolled brands, whereas this figure stood at just 4% for nonmembers. This behavior underscores the value that loyalty program members represent in driving traffic growth within the restaurant sector.
Since 2019, the overall loyalty program traffic has burgeoned, doubling during this period, while loyalty members now account for nearly 39% of total restaurant visits. In the past year alone, loyalty program traffic increased by 5%, even as the wider restaurant industry witnessed a 2% decline in overall traffic. In fact, within leading quick-service restaurant (QSR) chains, loyalty members now comprise half or more of total visits.
Tim Fires, president of Global Foodservice at Circana, commented on the significance of these trends, stating, “Loyalty programs remain a winning strategy and have been one of the few consistently effective ways to build restaurant traffic since 2019.” He cautioned, however, that simply enrolling customers into these programs does not guarantee success. For restaurants, establishing meaningful personal connections with their patrons and creating moments of delight throughout the year are paramount to ensuring that loyalty programs deliver their intended benefits.
The research further highlights the critical role that loyalty programs play in offering restaurant operators deeper insights into customer behavior and preferences. By integrating loyalty program data with broader industry and demographic insights, restaurants can attain a holistic understanding of their market position and the key drivers of customer decision-making.
As the adoption of loyalty programs continues to rise, brands are urged to invest in multi-channel engagement strategies that extend beyond mobile applications. The app should be viewed not as a standalone strategy, but rather as one of several touchpoints in a comprehensive customer experience that includes tailored promotions, exclusive content, and consistently engaging moments. The restaurant industry, fundamentally rooted in providing memorable experiences, can harness loyalty programs to reflect the same spirit of hospitality and personal connection that guests expect when they dine in-person.
Circana is a recognized leader in delivering technology, artificial intelligence, and data solutions to companies in the fast-moving consumer package goods (CPG) sector, as well as manufacturers and retailers seeking to enhance their operations. Their predictive analytics capabilities empower businesses to measure market share, understand consumer behavior, and devise strategies for sustainable growth in an increasingly intricate and fast-evolving economic landscape. The company’s Liquid Data® technology platform utilizes a broad, high-quality data set along with sophisticated algorithms drawn from over sixty years of industry experience, providing clients with necessary tools to adapt and thrive.
For further inquiries regarding Circana’s research, or for media-related questions, Shelley Hughes can be reached at [email protected] or by calling 312-731-1782.