Drill down on personalization

Loyalty programs may be due for an evolution. It’s probably no surprise, considering they have become so widespread. Foodservice operators need to find new and inventive ways to reach guests and earn their loyalty – and that becomes more challenging if brands are using similar loyalty playbooks. Some recent reports and events are hinting at where loyalty is heading.
In a recent episode of the Restaurant Masterminds podcast, host Paul Barron and guest Stacy Kane, a fractional CMO for several fast-casual brands, said Gen Z has less brand loyalty than previous generations. As their spending power grows in the coming years, restaurants may have to rethink traditional, points-based models. Kane said authentic hospitality – like a personalized note on a takeout bag – drives true brand affinity more than transactional rewards. They both critiqued the industry’s lack of meaningful personalization and transparency, citing Starbucks' 2023 rewards devaluation as a cautionary tale. “If you can’t afford the loyalty program, don’t do it,” Barron advised, underscoring the importance of building trust over gimmicks.
So what can operators do? At the Restaurant Leadership Conference in Phoenix this month, one panel discussion, “The More You Know: Fueling the Personal in Personalization,” focused on how brands can create meaningful guest connections. Jane McPherson, senior vice president at Penn Station East Coast Subs, spoke on the panel – and emphasized how collected data and AI insights are enabling the differentiation brands need to enhance loyalty. Specifically, she said foodservice brands can collect and combine information like how often a customer visits, what they order, how they interact with emails or apps, and general demographic details – taking steps to protect their privacy in the process. From there, they can use AI predictive analytics to get unique insights on guests, the occasions they visit, and the opportunities that exist for reaching them. Armed with this information, brands can use generative AI to tailor messaging to individual guest segments.