Schlotzsky’s has been laying the groundwork for future growth. With increasing competition, Schlotzsky’s President Kelly Roddy knew the brand needed to make some changes in order to stay relevant with today’s consumers and keep profitability headed in the right direction.
The venerable brand, which is part of Focus Brands, opened its first sandwich shop in Austin, Texas, in 1971. Over the years, the menu offerings have evolved to include toasted sandwiches, artisan flatbreads, specialty pizzas, salads, soups and more.
That evolution has continued in recent years to include a new look and feel for its brick-and-mortar restaurant spaces. Schlotzsky’s is in the process of converting its 350 locations into trendy and comfortable spaces. The menu too is expanding to include beer and wine as well as shareable menu options inspired by the Austin street food scene. Recognizing that today’s consumers are increasingly seeking off-premise dining options, Schlotzsky’s added online ordering for in-store pickup and delivery 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,” said Roddy.
According to Hospitality Technology’s 2019 Customer Engagement Technology Study, 49% of customers are demanding mobile ordering and 48% are seeking mobile loyalty program management. Roddy recognized it was time to implement a customer loyalty program to reward guests who support the brand and increase their overall lifetime value with Schlotzsky’s.
“More loyal customers are inherently more valuable customers,” said 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.”
Past marketing communication efforts included local store marketing tactics and text campaigns; unfortunately they lacked a consistent focus and message needed for true engagement. Without deep customer knowledge and insights that comes from data, these marketing efforts were falling flat. Roddy realized Schlotzsky’s needed a robust solution to thrive in the online ordering and delivery space as well as grow in-store sales.
In 2014, Schlotzsky’s implemented the Punchh Marketing Cloud platform initially rolling out a rewards program based on visits with guests earning a $7 reward after seven visits. The plan is to evolve the loyalty program into a points-based program, where guests earn a point for every dollar spent. Gleaning data-backed insights from loyalty guests has helped Schlotzsky’s better understand guests’ behaviors and engage them through a more strategic approach.
Roddy explains they now target customers differently within the 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.
The Punchh Marketing Cloud has paid off. Understanding customer motivation has helped Schlotzsky’s 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 personalized customer experience. Roddy credits Punchh with helping the brand enhance guests’ experiences every day through more two-way communication, the sharing of news and new ordering and delivery options all through a single, comprehensive customer platform that offers the customization and scalability the brand needed. As a result, Schlotzsky’s has seen its loyal customer base grow by 52% year over year and loyalty check-ins/visits increase by 57% year over year.
“Now we don’t miss out any opportunities to connect with loyal customers and new guests,” Roddy says.