Why Duck Donuts made the switch from a loyalty app to an SMS rewards programWhy Duck Donuts made the switch from a loyalty app to an SMS rewards program

Joanna Fantozzi

Is a loyalty program even a loyalty program if it isn’t attached to an app? While for many restaurant operators, digital rewards and a phone app interface go hand in hand, Pennsylvania-based mid-sized brand Duck Donuts has taken a different route in choosing an SMS-based rewards program, which just launched in January.  

The rewards program, in partnership with mobile engagement platform, Vibes, is called QuackChat, and allows the company to communicate with guests, keep them updated on new flavors, and offer promotional rewards, including “surprise and delight” offers.

While Duck Donuts originally started out by having a loyalty app, the provider for the company’s app went out of business, which then “forced their hand” to move on to a new idea. Duck Donuts CEO Betsy Hamm said. Although it was challenging to get the new rewards program up and running, the switch ended up being a blessing in disguise.

“Of course, as much as I would love to think that people should be eating donuts once a week, we don't really have that high of a frequency, but we want to stay top of mind,” Hamm said in a recent interview at the Restaurant Leadership Conference. “We want to be able to engage with our customers and 98% of text messages are read, so it just seemed like a really great opportunity to have another touchpoint with our customers… We have a really strong e-mail program so it makes sense to build that same sort of engagement through texting.”  

Related:Duck Donuts reports development growth in Q2

So far, QuackChat has 50,000 subscribers and counting, and the goal is to get to at least 100,000 subscribers by the end of the year. Currently, the rewards program helps to promote new items, like the new cotton candy doughnut, and offer promos on days like National Cold Brew Day. In the future, Hamm said, there will also be a personalization element, as well as a “digital punch card” where customers would be able to add their rewards card to a digital wallet like Apple Wallet.

Currently, this SMS program is just one part of the digital evolution Duck Donuts is undergoing, though another loyalty app is not part of the plan right now.

“People are talking about how they don't want yet another app on their phone,” Hamm said. “We’re really focused on the digital customer experience right now — on the website and the online ordering experience…. Once that's built, we feel strongly that we will have just as exceptional of an online experience as we do in the shop.”

Hamm said they want to cut down on the channel fragmentation and create a unified experience for customers, whether they just wander into a Duck Donuts shop or place an order based on the text message deal they received the other day.

Related:Betsy Hamm, Duck Donuts CEO, on the keys to transitioning from emerging to mid-sized brand

Ultimately, the goal of QuackChat is to create more returning customers, though Duck Donuts’ measurement of traffic might be different as a sweet treat brand than a coffee or lunch chain that encourages people to come in daily or several times a week.

“Five years ago, there wasn't nearly the amount of dessert competitors that there are today, whether it's cookies or Bundt cakes or ice cream,” Hamm said.  “We’re targeting the people who want a treat after dinner, or who have a special occasion like Mother’s Day or Valentine’s Day, and even made-up holidays like National Doughnut Day, so we have to think, ‘how do we lean into that?’ particularly in a crowded space.”

Contact Joanna Fantozzi at [email protected]