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Schlotzsky’s Delivers Personalized Experiences to Build Customer Loyalty

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Schlotzsky’s, which is part of the Focus Brands family, opened in 1971 in Austin, Texas. Almost 50 years later, they’ve since expanded with more than 400 franchise and company-owned locations in 35 states. The menu has also expanded to include toasted sandwiches, artisan flatbreads, specialty pizzas, freshly tossed salads, soups and more.

Recognizing a significant shift in marketplace trends over the past three to five years, Schlotzsky’s knew they needed to make some changes in order to stay competitive and keep profitability headed in the right direction. With a nod to their Austin roots, Schlotzsky’s is in the process of converting its 400 restaurants into eclectic spaces that are both cool and comfortable, introducing shareable menu options inspired by the Austin street food scene, adding beer and wine, as well as online ordering with in-store pick-up or delivery and from third-party sites.

“We believe these changes are important in order to connect with millennials and make their dining experience, however they choose to begin it and enjoy it – well worth it,” former Schlotsky's president, Kelly Roddy, said. Understanding that the millennial generation is also all about sharing, Roddy recognized it was time to implement a customer loyalty program to reward those guests who wholeheartedly supported the brand and increase their overall lifetime value with Schlotzsky’s. “More loyal customers are inherently more valuable customers,” explains Roddy. “We needed a way to talk to our guests and reward the most loyal guests differently with offers that make them feel truly special.”

While past communication efforts included a myriad of local store marketing tactics and text campaigns, they lacked a consistent focus and message needed for true engagement. Without deep customer knowledge and insights, their marketing efforts were not standing out in an increasingly digital landscape. Roddy expressed that Schlotzsky’s needed a robust solution that would address these challenges and prevail in the online ordering and delivery space as well as grow in-store sales.


Loyalty Matters

Schlotzsky’s has seen their loyal customer base grow by 52% year over year and loyalty check-ins/ visits increase by 57% year over year since using Punchh.

Schlotzsky’s implemented the Punchh Marketing Cloud platform in 2014. Initially rolling out a rewards program based on visits with every visit earning guests a bite and every bite earning a $7 reward. Roddy is looking forward to evolving their loyalty efforts by motivating customers through a points-based program, wherein guests will earn a point for every dollar spent.

Gleaning data-backed insights from loyalty guests has helped Schlotzsky’s better understand their customers’ behaviors and engage them through a more strategic approach. Roddy explains they now target customers differently within their loyalty program
and provide a higher level of personalization, such as offering a discount, like a free slider to a guest who hasn’t visited recently while offering a more loyal customer an exclusive sneak peek at new menu items. Understanding their customers’ motivations has
helped increase total offer redemptions by 42% year over year and increase average check lift from 12% to as high as 16%.

Schlotzsky’s remains dedicated to not only providing personalized offers, but providing a truly personalized customer experience.

“With Punchh, we’re enhancing our guests’ experiences every day through more two-way communication, the sharing of news and new ordering and delivery options all through a single technology for our guests,” says Roddy. “Now we don’t miss out any opportunities to connect with loyal customers and new guests.”

Their efforts are paying of as Schlotzsky’s has seen their loyal customer base grow by 52% year over year and loyalty check-ins/ visits increase by 57% year over year.

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