With increasing competition, Schlotzsky’s (www.schlotzskys.com) former 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. Part of Focus Brands (www.focusbrands.com), Schlotzsky’s opened its first sandwich shop in Austin, Texas, in 1971. 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. She recognized it was time to implement a customer loyalty program to reward guests who support the brand and increase their lifetime value.
“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.”
Without deep customer knowledge and insights that comes from data, earlier marketing efforts were falling flat. 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 (www.punchh.com) 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. 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 customers are targeted differently within the loyalty program and given a higher level of personalization, such as offering a discount to a guest who hasn’t visited recently while offering a more loyal customer an exclusive sneak peek at new menu items.
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%.
Guests’ experiences are enhanced 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 loyal customer base grew 52% year-over-year and loyalty check-ins increased by 57% year-over-year.