California Pizza Kitchen (CPK) just announced their new customer loyalty program called “Pizza Dough.” The program has an easy to understand value proposition – spend $100 at CPK and earn $5 in “Pizza Dough” that you can apply towards the payment of your check (with certain exclusions). A simple, easy to understand proposition is an important characteristic to maximize consumer acceptance – one of the key findings of our national consumer loyalty study – LoyaltyPulse.
CPK has jumped in along with a growing number of casual dining restaurants that realize the value of a customer loyalty program as a “tie-breaker” when guests have multiple options, all of which are appealing, and need something to tip the scales in favor of one brand over the others. That’s what effective loyalty programs can do. Pizza Dough also allows CPK to understand guest behavior at the level that enables the development and measurement of effective targeted marketing programs (read more about this in our Roadmap for Sagging Restaurant Sales).
This program has a bit of a cautious feel. The value proposition (spend $100 and receive $5 – a 5% face value proposition) is lower than what we see in many casual dining programs. Also, the Pizza Dough Rewards expire in 90 days. In many programs, rewards survive for a year or more. There is a tipping point with the value proposition. Some companies launch their first loyalty program with a cautious reward structure and, while we are strong advocates of carefully considered action, an excessively cautious value proposition may generate cautious response on the part of consumers.
The pizza segment of the restaurant industry has been and will continue to be a major competitive battleground. The combination of national, regional and local competitors and the heavy delivery/carry-out component provide some unique dynamics as compared to more traditional casual, fast casual and QSR restaurant brands. Because many of these brands have been collecting customer data for years (to facilitate the delivery process), the development and implementation of loyalty/rewards programs is not as logistically complex as it is in many other restaurant companies. These companies already connect customers with purchase transactions and that’s more than half the battle.
Papa John’s has already jumped on the bandwagon with Papa Rewards. It’s simple to participate and the program rewards members for orders placed online. To participate, you simply register online and from that point forward, as you place orders online you earn points in your Papa Rewards account. It’s a fairly rich proposition too – for every $25 you spend, you earn a free large pizza with up to three toppings.
Earn 1 Papa Rewards Point for every $5 you spend, including tax and delivery, on every purchase from your papajohns.com account.
You are eligible for a FREE large pizza with up to three toppings when you have earned 25 Papa Rewards Points.
Look for other special offers for Papa Rewards members throughout the year, but you must opt-in to receive promotional and marketing emails from Papa John’s.