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KFC is one of the food giants that bet on a modern loyalty program offering personalized deals, exclusive challenges, and an omnichannel experience. Let's find out how the company used gamification and personalization to combine the transactional value businesses need with the superb customer experience clients demand.
Economic pressures, rapidly evolving digital landscapes, and changing consumer behaviors, including a tendency towards slower lifestyles, have pushed major fast food giants to reshape their approach to driving customer loyalty.
McDonald's and Starbucks have taken charge of revamping their rewards programs. As their initiatives proved successful, they validated the broader trend of moving away from simple transactional relationships towards more personalized, data-driven engagement.
After Q12024, Starbucks reported that loyalty members, of which there are now 34.3 million, represent about 59% of total spend at the chain. McDonald's loyalty membership grew by more than 45% last year, contributing more than $20 billion in sales in 2023, according to Nation's Restaurant News.
As a result, restaurant loyalty programs have evolved into sophisticated tools for data collection, customer engagement, and brand differentiation.
KFC joined the Starbucks and McDonalds, launching the new KFC Rewards program, that represents a significant shift from its previous loyalty scheme.
By moving away from a simple stamp-based system to a more dynamic and engaging point-based structure, the company provides a more immediate and interactive experience, offering more flexibility and excitement compared to the fixed rewards of the old system.
The KFC program includes personalized offers, discounts, and rotating challenges that encourage members to try specific menu items, fostering a more engaging customer experience.
However, the most striking difference is the introduction of gamification elements, such as the "Rewards Arcade" in some regions. This feature allows customers to play arcade-style games for a chance to win free menu items, adding an element of fun and unpredictability to the loyalty experience.
By focusing on digital integration and instant gratification, KFC's new program not only aligns with broader industry trends but also enables better data collection for improved personalization and targeted marketing.
"KFC Rewards is filled with free food and finger lickin' good deals for our fried chicken faithful. And this is only the beginning. Through our new loyalty program we will serve even more joy to our guests with incentives and special experiences that are only for our rewards members."
Nick Chavez, chief marketing officer for KFC U.S (source)
The KFC Rewards program operates on a point-based system where customers earn 10 points for every eligible dollar spent. This system applies to purchases made through the KFC app or website.
This straightforward earning structure makes it easy for customers to understand how to accumulate points and track their progress toward rewards.
Points can be redeemed for a variety of free food rewards from the Secret Recipe Vault. This vault includes a rotating selection of items such as eight-piece Kentucky Fried Chicken Nuggets, a chicken sandwich, or a side dish.
The rewards offered in the Secret Recipe Vault are continually updated, providing a fresh selection of items for customers to choose from. This approach helps maintain customer interest and engagement while preventing the program from becoming stale.
Members receive personalized offers based on their preferences and purchase history. These offers can include discounts or free items tailored to individual customer tastes. Personalization enhances the customer experience by making rewards more relevant and appealing.
The program includes rotating challenges that allow members to earn additional points and exclusive offers by completing specific tasks, such as ordering particular menu items or visiting during certain times.
Challenges add an element of gamification to the program, making it more engaging and fun for customers. They also encourage customers to try new menu items and visit more frequently.
In some regions, such as the UK and Ireland, the program includes arcade-style games where customers can win instant rewards after qualifying purchases.
Customers can earn points and redeem rewards across various channels, including in-store, drive-thru, and KFC app orders.
This flexibility ensures that customers can participate in the rewards program regardless of how they choose to order, making it more inclusive and accessible.
The program aims to provide special experiences and offers that are only available to rewards members, such as early access to new menu items or exclusive events.
Exclusive experiences add value to the rewards program and make members feel special and appreciated, fostering a deeper connection with the brand.
New members who sign up for the KFC Rewards program can receive a buy-one-get-one-free Smash'd Potato Bowl as a welcome offer.
This incentive encourages new customers to join the program and start engaging with it immediately, helping to grow the membership base.
The KFC Rewards program's structure is centered around a mobile loyalty app, which serves as the primary hub for the entire rewards ecosystem.
The app allows customers to access their accounts, track points, view available rewards, and redeem offers.
Within the app, a dedicated "Rewards" tab provides a personalized interface, showcasing tailored offers, challenges, and available rewards.
At the core of the program is a straightforward point-based system designed for ease of use.
Members earn 10 points for every eligible dollar spent on orders placed through the KFC app or website. These points are automatically credited to the member's account upon purchase, creating an element of instant gratification. Accumulated points can be redeemed for free food items from the Secret Recipe Vault.
The KFC Rewards structure is further enhanced by several additional features that contribute to its overall effectiveness.
These include a rotating selection of rewards in the Secret Recipe Vault to keep the program fresh and exciting, omnichannel integration allowing members to earn and redeem points across various ordering channels, regular updates to the program with new challenges and rewards, and special promotions for new members.
All these features and elements are "wrapped up" with personalization, as the program offers tailored discounts and free food items based on members' preferences and purchase history, ensuring that each customer's experience with KFC Rewards is uniquely relevant to them.
The revamped program has facilitated a doubling of project delivery speed. This enhanced agility allows KFC to implement program improvements and introduce new features at a faster pace, ensuring a continuously optimized user experience.
The agency behind KFC's Rewards campaign confirmed the positive response from the target audience.
As noted:
Interested in how the above stats present themselves in a general context? Read The 32 key loyalty programs statistics in 2024.
KFC's revamped Rewards program stands out with its unique gamification approach. The KFC Rewards Arcade allows customers to earn points and play games for a chance to win free menu items instantly after qualifying purchases, setting it apart from competitors.
However, elements like the point-based system and mobile-centered approach have become new market standards.
MyMcDonald's Rewards program operates on a straightforward point-based system where customers earn 100 points for every $1 spent. These points can be redeemed for various free menu items, making it easy for customers to understand and participate.
The program is strongly integrated with the McDonald's mobile app, encouraging users to place orders through the app and enjoy a seamless digital experience.
McDonald's strategy includes promoting mobile order-ahead features, providing a VIP-like experience to loyal customers.
The CEO of McDonald's himself believes that MyMcDonald's is a previous source of "important data to understand our customers’ preferences," as quoted by McKinsey.
Starbucks Rewards is renowned for being one of the most successful loyalty programs in the industry. Members earn Stars for their purchases, which can be redeemed for drinks, food, and merchandise. The program is deeply integrated with the Starbucks mobile app, emphasizing mobile ordering and digital engagement.
Starbucks Rewards has a large and active member base, with loyalty members representing a significant portion of the company's total spend.
The comprehensive rewards ecosystem and strong focus on personalization have made Starbucks Rewards a key driver of customer loyalty and repeat business.
The revamped KFC Rewards program has shifted from a traditional (not to say old-fashioned) stamp-based system to a dynamic, point-based structure emphasizing personalization and digital engagement, with unique utilization of gamification features. It not only embodies modern market loyalty standards but also introduces creative enhancements that don't compromise the market-proven user experience.
KFC's shift reflects the broader industry trend towards sophisticated loyalty initiatives that combine transactional value with enhanced customer experiences. The program's success demonstrates the effectiveness of these strategies in driving customer loyalty and profitability in the competitive fast-food sector.
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