Loyalty programs that include the concept of “surprise and delight”— rewards that are not directly tied to specific spending or points goals — are helping some restaurant operators drive excitement around their brands.
These types of rewards appear in many forms in the industry and are often offered alongside traditional points-based loyalty programs as added benefits for customers. Surprise-and-delight loyalty programs also exist on their own as the primary rewards strategy for some brands, such as Jimmy John’s and The Cheesecake Factory.
“When you’re going to get a coupon or a special reward that you don’t know about, and you don’t necessarily know how you're going to get up to that point, it could be exciting for the consumer,” said Brad Jashinsky, director analyst at research and consulting firm Gartner. “But it's also limiting to a certain point, because you're not necessarily going to get a consumer to do that extra visit because they’re close to getting a reward.”
In fact, Gartner research found that consumers prefer loyalty programs that allow them to accumulate points. The 2022 Gartner Consumer Priorities Survey, conducted across a range of industries, found that redeemable points were the top loyalty reward favored by consumers, cited by 50% of respondents. These structured programs are easy for consumers to understand and track, Jashinsky said.
“I think that’s the one danger of restaurants that are only offering surprise and delight,” he said. “It could be hard to get that kind of engagement when a customer doesn't really know what to expect.”
Operators revamp loyalty programs
The focus on surprise and delight comes as many companies have revamped their loyalty programs amid inflation, economic uncertainty and higher operating costs. Loyalty programs can be a cost-effective vehicle for providing value for consumers, while also driving incremental sales from existing customers, Jashinsky said.
“We're seeing this continued focus on customer retention,” he said. “As customer acquisition gets more costly, businesses always turn to customer retention, and loyalty programs are a great way to retain customers.”
In addition, loyalty programs offer retailers a way to gather customer data so they can create more relevant and personalized offers.
Among the restaurant companies that have cited surprise and delight as a part of their relaunched loyalty programs is Dutch Bros Coffee, which is seeking to incorporate more targeted offers and random rewards into its loyalty efforts, and Panda Express, which has in the past effectively incorporated surprise-and-delight rewards via gamification, Jashinsky said.
Sweetgreen adds new level of rewards
Sweetgreen also recently revamped its loyalty program to include more elements of surprise and delight. The salad chain is implementing a two-tiered loyalty program, with a free level called Sweetpass and a paid level called Sweetpass+ that includes exclusive experiences and opportunities to get free merchandise. Sweetpass+ members also get first access to new menu items.
“The market is saturated with loyalty programs offering discounts to customers through traditional earn-and-burn structures,” a spokesperson for Sweetgreen told NRN. “The concept of ‘surprise and delight’ drives loyalty with customers because it offers them something beyond what they’ve grown to expect, creating memorable moments and bringing them closer to the brand.”
Sweetgreen offers free items and other surprise rewards through its new, two-tiered Sweetpass loyalty program.
Sweetgreen is seeking to “reimagine the traditional point-based loyalty program,” the spokesperson said, noting that Sweetpass and Sweetpass+ allow customers to choose which types of rewards are most important to them.
Other newly revamped loyalty programs that offer elements of surprise and delight include Chipotle Rewards, which added a perk called Freepotle earlier this year. Members could win free Chipotle for a year and other prizes, adding a level of excitement to the chain’s traditional rewards program.
“The launch of Freepotle generated a strong pickup in enrollments, as we now have more than 33 million Chipotle Rewards members,” a spokesperson for Chipotle told NRN. “We also saw an increase in member engagement as Freepotle gained traction throughout the first quarter of 2023.”
Free items ‘spread joy’ at Pret A Manger
Pret A Manger, meanwhile, incorporates a true surprise-and-delight strategy alongside a traditional points-based loyalty program called Pret Perks. The chain empowers its employees to give away free items to customers at their own discretion, within certain limits.
“Spreading joy has long been a part of Pret’s ethos, and our shop teams are encouraged to spread joy by surprising customers with a free coffee, treat or even lunch,” said Jorrie Bruffett, president of Pret A Manger North America. “Sometimes we may want to reward a loyal customer; other times we may be trying to cheer up a customer who seems to be having an off day. We use these random acts of kindness to build a rapport and a loyalty that we wouldn’t get with a standard rewards program — although we have one of those too.”
Handing out free items at random enhances the customer’s in-store experience, which consumers appreciate more than ever in an increasingly online world, she said.
“Many customers are primarily choosing to have digital experiences with the brands they shop with, which means there are fewer in-person interactions,” said Bruffett. “So, when a customer chooses to come into a Pret shop and interact with our team members, these surprise-and-delight moments make those visits more worthwhile.”
Managing the costs of loyalty programs
Surprise and delight can be a relatively low-cost marketing strategy, said Jashinsky, although operators do need to remain conscious of their spending on these efforts.
“Companies sometimes get into trouble with the financial structure, because you can over-incentivize,” he said. “There's a lot of financial modeling that goes into it when companies are doing this.”
He cited as an example prizes such as the Starbucks For Life reward, which offers a free drink or food item every day for 30 years. If the chance to win that prize is relatively small, it can provide the company an opportunity to generate a lot of excitement and traffic at a low cost overall.
Jashinsky said operators appear in recent years to have focused more acutely on the profitability of their rewards programs.
“I think that's why we've seen Dunkin’, Starbucks and other restaurants out there tweak some of their programs to ensure that they are meeting the business goals, and also hopefully leading to greater customer satisfaction,” he said.
At Sweetgreen, the company measures the success of Sweetpass by the number of subscribers, order frequency and increase in average order value, the chain’s spokesperson said.
When Sweetgreen piloted a version of Sweetpass for 30 days in 2022, users placed an additional five orders compared with their average monthly orders in the fourth quarter of 2021, nearly tripling their frequency and more than doubling their spend, the spokesperson said. While still early in the program, Sweetpass+ has also driven more frequency among customers.
“Our loyalty program is a huge opportunity to drive our digital flywheel, given the strength of our owned digital channels, our healthy and crave-able menu, and our highly engaged cohort of habitual Sweetgreen customers,” the spokesperson said.
At Pret A Manger, meanwhile, Bruffett said the chain doesn’t measure the ROI of its surprise-and-delight program.
“Each Pret shop has a budget they use at their discretion, specifically to surprise and delight a customer, usually with a coffee or a treat on the house,” she said. “We have always operated with this budget, so we don’t look to measure the ROI. It’s part of who we are and what we do as a brand.”