US: More details on Chipotle's loyalty promotion

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By: RickFerguson |

Posted on June 29, 2016

As we reported back in May, troubled US-based fast-casual restaurant chain Chipotle is trying to reverse its flagging fortunes with a loyalty promotion. The programme, called Chiptopia, is set to launch this week as a three-month summer programme. Can a three-month loyalty push erase the bad taste of a dangerous e coli outbreak? Here's a closer look at Chipotle's strategy.

Chiptopia is a straight frequency programme with three tiers - mild, medium, and hot - that allow Chipotle fans to earn free entree items. Monthly bonus rewards increase the stakes for high-frequency customers. The programme lasts for three months, beginning July 1, and purchase totals reset to zero each month. Registration requires a mobile number.

That's it- a perfectly servicable digital punch-card programme with nothing else interesting to say about it. While the programme may result in short-term gains, its basic punch-card structure and finite time-span virtually guarantees that any resulting behavior change will be short-lived as well. As we mentioned in May:

"Increased frequency is certainly a benefit of a loyalty programme - but short-term behavior change is not the goal of a loyalty programme. The goals are increased relationship equity and lifetime customer value. It's a long-term commitment to your best customers that results in a lifetime of loyalty."

In a press statement, however, Mark Crumpacker, chief creative and development officer at Chipotle, held out the possibility for a longer-term commitment to loyalty. Money quote:

"While Chiptopia Summer Rewards lasts just three months, we will be carefully listening to our customers and using what we learn as we consider the design of an ongoing rewards programme."

Crumpacker's statement is a good sign that the company gets it. Free food is a no-brainer for die-hard Chipotle fans. What those fans really need, however, is a reason to trust the brand again. Design a programme that, as we said back in May, "acts as brand insulators that can ease the impact of a public relations crisis." If Chipotle asked us, we'd strongly advise the creation of a long-term loyalty platform that can help the brand weather the next storm to come along.

- Rick Ferguson

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