Dive Brief:
- Pizza Hut is moving its Hut Rewards loyalty program away from a focus on pure points accumulation toward a more experiential system, according to an emailed press release.
- Hut Rewards still retains a core points accumulation mechanism, with consumers gaining 10 points for every dollar, according to Pizza Hut’s website.
- The brand’s March Madness-related promotions, which included a $21.99 Space Jam-themed meal bundle, served as the first major test of the new loyalty strategy, a Pizza Hut spokesperson wrote in an email.
Dive Insight:
In addition to the meal bundle, Pizza Hut’s March Madness promotion included “in app swag drops exclusively for members, including a limited-edition Space Jam x Pizza Hut merchandise collection tied to the 30th anniversary that sold out completely,” according to the press release.
To extend that success, Hut Rewards is adding “ongoing access to cultural experiences and exclusive perks that extend beyond the transaction,” the release states. The brand said the program will evolve over time and give members more ways to earn points on eligible purchases, as well as bonuses and challenges that lead to fast points accrual. The new Hut Rewards system is designed to give members a feeling of exclusivity by offering special perks and experiences, according to the press release.
This strategy proved successful during the March Madness promotions, Ashley Travis, head of growth marketing at Pizza Hut, said in the press release.
“We saw our vision come to life by offering exclusive, member-only Space Jam merchandise drops and interactive digital games that drove consumers to the Pizza Hut app and brought more energy to this program,” Travis said.
The Pizza Hut loyalty strategy shift aligns with a general move by major brands to add new loyalty features on top of core points-based systems. Recent findings by Paytronix indicate that purely points-based systems are falling behind loyalty schemes designed to engage consumers in gamelike challenges or that offer them hyper-personalized rewards. Tillster similarly found that consumer loyalty overall is eroding, and competition based purely on price — and its loyalty corollary, discounting — is insufficient to engage modern diners.
Instead, leading brands like Starbucks, Chipotle and Taco Bell are finding new ways to incentivize consumer behavior and foster attachment to brands. Members of Starbucks’ top loyalty tier, which debuted in January, can win exclusive travel experiences, for example. Chipotle is using artificial intelligence analytics and communications to increase engagement early on in membership. Taco Bell recently determined one of its limited-time offerings by having loyalty members vote in-app for their preferred menu item.
Pizza Hut could use a boost to consumer frequency. The Yum Brands chain saw its U.S. same-store sales fall 5% last year, as competitor Domino’s increased its market share. Pizza Hut’s sales struggles are pushing the chain to close up to 250 restaurants, while Yum mulls a sale of the chain due to the time and difficulty of engineering a whole brand turnaround.
