Red Robin Gourmet Burgers Inc. updated its Royalty program in May and found it led loyal guests to increase visits, executives said Thursday.
The Englewood, Colo.- based casual-dining brand, which released earnings Thursday for the second quarter ended July 14, said loyalty members now earn one point for every dollar spent.
“After earning 100 points, guests receive a $10 reward, good for both dine-in as well as online orders,” explained G.J. Hart, Red Robin president and CEO in Thursday’s earnings call. “This allows guests to earn a reward much faster than the previous program and encourages more frequent visitation to capitalize on their earned rewards.”
Hart also said a 90-day redemption window for rewards provided an incentive for return visits.
“Guest response during the first 10 weeks of this program has exceeded our expectations,” Hart said. “Our operators have done a great job engaging with guests and driving enrollment in the program.”
Since the launch of the new program, guest sign-ups have increased from 60,000 to 90,000 per four- week financial period prior to the loyalty,” Hart said. “These sign-ups are an increase of 156% vs. the same time frame in 2023.” The latest Royalty loyalty platform had more than 14.3 million members at the end of the second quarter, he added.
About 130,000 new members signed up and completed a transaction in the last four weeks of the second quarter, he said, up 240% from the same period last year.
“New loyalty members are visiting more frequently. The average time until a second visit has been reduced from 51 days to 39 days,” Hart said. “Loyalty guests typically spend more than non-loyalty members. The total check for our loyalty guests has increased to approximately $4.40 greater than the non-loyalty guests from approximately $2.90 previously.”
The loyalty program was changed amid uncertainties in the general economy, he added. Initiatives such as adding servers, hosts, and bussers to the dining rooms helped improve internal service scores and wait times, Hart said.
“Our guests report a 7% improvement on pace of experience and 3% gains in orders served on time,” he said. “Wait times greater than 15 minutes are an indicator of false waits. In the second quarter of 2022, 10% of our guests reported waiting more than 15 minutes. And in the second quarter of 2023, it was reduced to 3%, and now down to 1% in the second quarter of this year.”
Red Robin has also, “returned to a dedicated kitchen expo and management structure to provide timely and accurate delivery of orders,” Hart said.
With those changes, Hart said 2024 “is about putting Red Robin back on the map in the minds of consumers, communicating value and harnessing the power of our relaunched loyalty program to drive guest engagement.”
That was accompanied by refreshed marketing initiatives, he said.
“We incorporated initial learnings and work to optimize our media mix by doubling down on social and digital streaming, TV and video, including platforms such as Amazon, Hulu and other strong partners,” Hart said. “This targeted approach was intended to drive greater efficiency and reach among our core target guests.”
For the second quarter ended July 14, Red Robin reported a net loss of $9.5 million, or 61 cents a share, compared to net income of $3.9 million, or 24 cents a share, in the same period last year. Revenues rose to $300.2 million compared to $298.6 million in the prior-year quarter.
Same-store sales at company-owned restaurants declined 3.2% in the quarter.
Red Robin has more than 500 restaurants in the United States and Canada.
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