This week Pizza Hut launched a loyalty programme in the UK for both app and online customers. Based on a simple ‘earn a slice’ for every £10 spent, the rewards are then split into three tiers: five slices earns a free side, seven a free medium pizza and ten slices gets them a free large pizza. Once they have hit ten slices, the programme resets.
While orders placed online or via the Pizza Hut app currently make up 80% of total orders, they have to invest in loyalty in an increasingly competitive market. The industry is ripe for change, and customer demand is at an all-time high when it comes to delivery. Everyone wants convenience and speed but also choice – not just with pizza any longer – and now it’s time for restaurant brands to assert their position and get some skin in the game by matching the delivery experience that was almost unique to pizza chains for decades.
With brands like Deliveroo, Uber Eats and Just East driving the mainstream adoption of food delivery, loyalty programmes might be an excellent strategy which is set to become more relevant in the food delivery space. According to research done at the Kellogg School of Management at Northwestern University, up to 15% of a business’s most loyal customers account for 55-70% of its total sales. Loyalty is a feeling that comes from experiencing brand love in different ways, from special in-store experiences to discounts or vouchers.
Pizza Hut wants to make Hut Rewards the “easiest and richest loyalty programme in the food delivery segment”, Stephan Croix, chief sales and brand officer at Pizza Hut Europe and UK, told Marketing Week. “Loyalty is super important, it’s probably at the heart of any retail driven business today across pretty much any industry you can think of. At Pizza Hut the online customer journey is really at the heart of our strategy.”
To make this digital transformation happen, two years ago Pizza Hut established Pizza Hut Digital Ventures (PHDV), an in-house team which is focused on enhancing the customer experience. This team of digital experts have remarkably managed to simplify the user experience and customer journey with projects that included reducing the number of steps involved in ordering a pizza and improving the conversion rate by 50%.
There is a clear upside to restaurant chains like Pizza Hut which invested in creating their own delivery fleet. Owning the supply chain all the way to the customer enables them to control the entire customer experience, leveraging their brand at every single touch-point: from the driver’s uniform to the loyalty programs. Ultimately, this will helps them maintain healthy profit margins on their orders by not having to fork over a large portion of their revenues to their last-mile delivery partners. What’s more, results of a recent survey by UBS show that 76% of consumers prefer to order directly from the restaurant rather than through a third party.
As the industry evolves and competition intensifies from all type of food and delivery options, brand loyalty is only achievable through exceptional delivery experiences – and it is the challenge for some of the world’s favorite food chains to fulfill and exceed their customers’ expectations with simple, attractive, and speedy offerings.