Sweetgreen Rethinks Loyalty with Subscriptions

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Sweetgreen, the Los Angeles-based, health-focused fast-casual chain with over 150 restaurants, is looking to combine a subscription model with more traditional restaurant rewards to boost loyalty with digital customers going forward.

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On a call with analysts Friday (May 6), Jonathan Neman, the brand’s co-founder and CEO, spoke about the success of the company’s “Sweetpass” subscription product. In January, Sweetgreen launched the pilot test of this offering, presenting consumers with the chance to earn a $3 credit back for each purchase (limited to one a day) for 30 days for a one-time $10 fee.

Related news: Sweetgreen Launches ‘Sweetpass’ as Restaurants Leverage Subscriptions to Build Loyalty

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“We wanted to learn who the pass resonated with and most importantly, how it would influence their frequency,” Neman said.

The program appears to have exceeded expectations. He noted that it surpassed its target with 16,600 consumers purchasing passes in the three weeks in which they could and with nine in 10 of those customers reporting that they would be interested in repurchasing their subscription. Additionally, “new, lapsed and low-frequency customers” accounted for 60% of members, and pass holders placed five more orders per month than non-holders.

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Looking ahead, the company aims to integrate subscription offerings into a loyalty program that also includes features for non-subscribers.

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“We are testing various loyalty frameworks and features throughout 2022,” Neman said. “We believe that a reimagined loyalty program that features both subscription and personalized promotional capabilities will have a force multiplier effect when you combine it with our healthy menu designed to be eaten every day.”

Such a program would not be Sweetgreen’s first foray into digital loyalty — hence the use of “reimagined.” In late March 2021, the Culver City, California-based salad chain ended the earlier iteration of its rewards program, citing the difficulties of the pandemic as a factor in the FAQ section on the restaurant’s site.

You may also like: Gearing up to Go Public, Sweetgreen’s Aggressive Digital Efforts May Be Misdirected

Research from the February/March edition of the Digital Divide series, “Digital Divide: Restaurant Subscribers and Loyalty Programs,” which drew from a December survey of more than 2,000 U.S. adults,  found that restaurant subscribers are significantly more loyal than their non-subscriber counterparts.

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Read more: Four in 10 Consumers Open to Restaurant Subscription Services

The study found that restaurant subscribers are nearly twice as likely to use restaurant loyalty programs as nonsubscribers are, and subscribers are considerably more likely to report that they are very or extremely loyal to their favorite restaurants than the population overall.

However, not all are convinced that loyalty programs will continue to generate the growth that many brands expect. Danielle Fisher, vice president of marketing at Jamba, a Focus Brands-owned smoothie and juice restaurant chain with 850 locations across six countries, predicted in a recent interview with PYMNTS that the enthusiasm for the model would normalize over time.

See also: Restaurant Brands Offer Predictive Customization to Engage Loyalty Members

“I think [a] trend that is over-hyped is subscription services to specific products,” she said. “While I don’t think the subscriptions will go away, I also don’t think that they will unlock the exponential growth that we are seeing now.”

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NEW PYMNTS DATA: THE TRUTH ABOUT BNPL AND STORE CARDS – APRIL 2022

About: Shoppers who have store cards use them for 87% of all eligible purchases — but this doesn’t mean retailers should boot buy now, pay later (BNPL) options from checkout. The Truth About BNPL And Store Cards, a PYMNTS and PayPal collaboration, surveys 2,161 consumers to find out why providing both BNPL and store cards are key to helping merchants maximize conversion.



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