Success stories
March 2, 2022

Burger King has launched a new loyalty program: the purchases share of participants is higher than in the US and EU. Arthur, Head of the Digital Sales, tells their story

  • Goals Increase turnover in digital channels: website, apps, self-service checkout kiosks in restaurants, aggregators
  • Solution Develop a new loyalty program
  • Develop personalized offers for the loyalty program to minimize the likelihood of guest churn
  • Consider a bonus point fraud prevention system via the loyalty program’s monitoring toolkit
  • Result 52% more turnover among loyalty program participants compared to non-participants
  • The new loyalty program was paid off in just 6 months using the updated mechanics
  • Participants Head of Digital Sales at Burger King
  • Term 6 months
  • IT Self-designed website and mobile applications for iOS and Android, self-service checkout kiosks, and R-Keeper POS in restaurants
  • Business size 12,500 restaurants and 11 million guests daily, worldwide

Burger King is a global restaurant chain

Arthur Roshchenko

Arthur Roshchenko, Head of Digital Sales at Burger King

My name is Arthur Roshchenko, and I’m the Head of Digital Sales at Burger King. I’d like to tell you about how we relaunched our loyalty program, carried out a pilot runthrough, and dealt with negative feedback. I will also be sharing the results we’ve achieved, how the IT infrastructure of the loyalty program works, and which additional mechanics we’ve launched for our loyal customers. Finally, I’ll be sharing some tips for working with direct marketing.

Change in the Loyalty Program’s Mechanics

Since 2018, we have been focusing on digital channels, as they account for more than half our sales, i.e., the website, apps, self-service checkout kiosks in restaurants, and aggregators. And this component is expected to continue growing. That’s why we’ve developed an app-centric loyalty program. All the loyalty program’s features can be accessed on the app. The customer accumulates and spends bonus points, participates in competitions and games, and receives special offers. Customers could previously spend points anywhere — at the POS and on the website.

Loyalty program features:

Guests accumulate points for ordering through different digital channels, i.e., the website, app, self-service checkout kiosks, restaurant POS, and aggregators.

$1 = 10 bonus point 10 bonus point = 10 crown «Crowns» can only be spent in the app store.

loyalty program
loyalty program
The loyalty program is based on points in the customer’s account and what can be bought for «crowns»

Results of the loyalty program’s relaunch

Indicators of participants in the loyalty program versus non-participants:

+52%
extra turnover
Participants make more
frequent purchases
Their average order
amount is higher

We receive additional revenues from loyalty program participants due to their more frequent purchases compared to other guests. The program’s outcome depends entirely on a company’s approach. Some only consider the average order value, while others consider the individual guest. I think it’s essential to track how many times a guest visits the restaurant in a month, in six months, and in a year. If a company increases its guests over a long period of time, it’ll always find itself in the black.

Our next challenge is to attract guests to the loyalty program who are going to spend more and more with each visit.

loyalty program’s business model
The internal calculation for understanding the business model is based on Burger King’s current data averages. LP = loyalty program and LP participant = loyalty program participant

Additional results from the loyalty program relaunch:

  1. We paid off the loyalty program in 6 months when we had initially planned to do so in 12.

  2. We also surpassed our expectations in additional turnover and in the number of guests making purchases through the loyalty program.

    We’ve introduced specific KPIs for each month, i.e., a certain number of guests that should be making purchases through the loyalty program. Although our KPIs increase every month, we continue to exceed them.

  1. The amount of online loyalty program purchases is higher than in-person visits in the US and Europe combined. Burger King is a global company. Our managers track sales and compare performance worldwide, while replicating its best practices in other countries for turnover growth. To date, Russia’s loyalty program leads the pack out of all BK’s locales, worldwide.

MINDBOX COMMENT

To cut a long story short. It’s worth measuring the efficiency of a public loyalty program via a set of quality data metrics. This includes citing market penetration, a comparison of customer segments, a comparison of like-for-like indicators, and a comparison of indicators between regions as part of a test with a control group. However, measuring the public aspect of a loyalty program is not always a requirement. From one aspect, it may be perceived as a tax on customer identification.

Details. It is challenging to measure the efficiency of a public loyalty program. Loyalty program penetration, i.e., the share of orders or revenue that participants generate, is an indisputable metric. Market penetration indicates interest in the program, participant engagement, and our level of knowledge regarding customer behavior. However, this metric does not fully reflect efficiency, so other tools are needed.

For example, Burger King compares the behaviors of loyalty program participants and non-participants. Our team believes that the program encourages repeat purchases and increases the average order amount. Indeed, we have the numbers to reflect this belief when comparing loyalty program participants to non-participants. Not to mention, other major players are doing the same thing. Unfortunately, this metric also has its flaws. It doesn’t show the cause-and-effect relation between whether the loyalty program affects the frequency of sales or whether regular customers have registered for the program.

But, for certain, it’s great to be able to look at a set of metrics and see the numbers. Some alternative approaches to measuring performance and its complexity:

  • Compare general like-for-like metrics by YOY, MOM, or WOW periods. The challenge is to exclude other factors that affect a change in revenue.
  • You can also try comparing performance across regions, where one is used as a control group to launch an entire loyalty program or individual promotions. The challenge, however, is to find comparable regions.
  • You can also assess changes in customers’ behavior who had been in the database before the program’s launch — such as in online stores — and then were registered in the database as participants. The challenge here is that there may be insufficient data.
  • It is not recommended to measure the public side of the program. Think of it as a tax on customer identification and instead measure non-public promotions with control groups. The challenge in this case is to relaunch the loyalty program, but changing its terms and conditions since the public component can significantly impact efficiency.
Yulia Turkina

Yulia Turkina, analyst at Mindbox

How We Relaunched Our Loyalty Program: The Pilot Test Run & Negative Feedback

Changing a loyalty program is a big step. So, to make sure that guests have no trouble understanding and accepting the new rules, we conducted a pilot run of the new program using 10% of our guests as a test group. Because of this pilot run, we managed to detect and fix bugs, correct the loyalty program’s registration mechanics, evaluate the loyalty program’s changes in its effect on guests relations, and determine what kind of profit turnover could be obtained. The pilot launch lasted for one month.

The loyalty program’s launch for all guests didn’t go as smoothly as hoped as we had replaced the old loyalty program’s cashback offer program with an expanded «crowns» bonus points system. At first, guests who’d had a large amount of cashback in the old program did not understand the new mechanics, finding the new program a bit awkward. Because of this particular outcome, our ratings on the App Store and Play Market fell. At the same time, the rest of the indicators remained the same.

Our response was that we immediately sent out emails to guests, explaining how many points they would receive in the new loyalty program using the example of their old cashback sum. So, in the end, we managed to reduce negative feedback and re-establish our previous positive ratings in stores. Soon after, our ratings reached a record high.

Burger King app rating dynamics

Burger King app rating dynamics on the App Store and Google Play

IT infrastructure of the loyalty program

Mindbox is at the center of our loyalty program’s IT infrastructure. Their platform is interconnected with all our channels:

Mindbox within Burger King’s loyalty program IT infrastructure

Mindbox within Burger King’s loyalty program IT infrastructure

Additional mechanics being launched

Our main goal now is to increase the frequency of guest purchases. At the same time, it may be that the average order amount could decrease. Right now, the average order value is lower than any other channel on our app. But the guest still spends more, which actually happens due to their frequency of purchases.

To increase the frequency of purchases, we issue:

  1. Challenges. Challenges like «Buy five chicken burgers and get the sixth free.»
  2. Personal coupons. Discount offers on customers’ favorite meals.
  3. Limited Time Offers. After some time, the customer receives a personal offer. This scenario benefits everyone. The customer gets either a special discount or bonus points while we make an extra sale.
Burger King’s loyalty program challenge examples
Burger King’s loyalty program challenge examples

Tips for working with direct marketing:

  1. Don’t roll out significant changes to all customers at once. First, conduct a pilot run for 10% of customers.
  2. Develop a clear financial model to understand your global goals and build key metrics.
  3. Transfer customers over to the app. App-centricity is crucial for us.
  4. Use customer feedback and reactions to adjust the loyalty program. Read comments and reviews on the App Store and Google Play, and correct any shortcomings.
  5. Launch additional mechanics. At the same time, there is no need to reinvent the wheel. It’s enough to gauge competitors in Russia and abroad.

Planning for Direct Marketing Development

  1. Launch new individual offers; now we are making offers by segment. We plan to launch offers on paydays and limited-time offers to do this.
  2. Launch and test personalized mechanics on the app, such as stories, universal pop-ups, and challenges. This will help increase the frequency of customer purchases.
  3. Develop new offers for RFM segmentation and guest missions.
  4. Improve the loyalty program app to make it even more convenient for guests. This will help increase the proportion of guests who purchase through the app. Currently, not all app users are actually making purchases through the app.
  5. Run game mechanics on the app.