THE CLARUS Blog

With 8.5 Million Members, Is Chipotle Rewards Just Heating Up?

Since Chipotle launched its Chipotle Rewards loyalty program 11 months ago, it has already enrolled more than 8.5 million members.

And according to company officials, they’re just getting started.

“We haven’t really turned that into a personalized program where we’re communicating on a 1-to-1 basis with our customers,” Chipotle CFO Jack Hartung told Jim Cramer on the Mad Money show.

Chipotle officials are building their loyalty program the right way.

Judging by the impressive number of program members acquired in the past 11 months, the future looks bright for Chipotle Rewards.

 

It’s Time to Leverage Loyalty Assets and Focus on Personalization

Research shows that 91% of consumers are more likely to shop with brands who recognize them and provide relevant offers and recommendations.

Loyalty program data allows brands to personalize offerings.

And this is something Chipotle plans to focus on this year.

During Chipotle’s fourth-quarter earnings call on Feb. 4, CEO Brian Niccol talked about plans for the loyalty program.

“Now that we have many of the digital tools in place, 2020 will be about using them more efficiently and really leveraging our rewards program, which currently has more than 8.5 million enrolled members and is one of the fastest growing restaurant loyalty programs in history,” Niccol said.

This year will be about more than increasing member enrollment.

“In 2020, we will not only further increase enrollment, but more importantly, look to optimize the use of database marketing to incent behaviors as we build out our CRM capabilities,” Niccol said. “Personalization are the cornerstones of our evolving loyalty strategy.”

 

How Big Can Chipotle Rewards Become?

Niccol is encouraged by the program’s impact on transaction increases.

“We expect this lever to become a bigger driver in the future as we gain more experience gathering customer insight while continuing to expand our digital ecosystem,” he explained.

Niccol said that Chipotle customers have always been drawn to greater engagement.

“Any time we have found that we provide people the ability to have more engagement or more access, they want to be a part of that,” he said. “And I think that’s why the rewards program has had such quick adoption.”

Armed with a “great value proposition” and a commitment to Food With Integrity, Niccol is excited about what comes next for the loyalty program.

“The thing that’s great is we have 8.5 million customers and the personalization really is just getting started,” Niccol explained. “So, I’m already seeing some of our tactics going to the marketplace.”

Chipotle officials plan to invest in the loyalty program to spark even more growth.

“But at the same time, we’re now taking that universe and really using it as a smart way to grow the business,” Niccol added. “And it’s a hugely valuable asset and it’s an asset we’re going to really drive going forward.”

 

Why Optimization Is the Key to the Success of Your Loyalty Program

Nearly 70% of consumers agree their loyalty is more difficult for a retailer to maintain than ever before, while 88% agree retailers could do more to earn their long-term loyalty.

That’s why optimization is so crucial to a loyalty program’s success and long-term viability.

When you have valuable customer data, like Chipotle does from its Chipotle Rewards program, it’s important to understand and fully leverage it.

There’s no ‘i’ in team, a mantra that Niccol stressed.

“I believe you don’t get these results without developing the right culture and the right people and I think that’s happening in all facets of our business, whether it’s operations, marketing, digital, HR, public affairs,” he said.

It will be very interesting to see the trajectory that the Chipotle Rewards program takes from here on out after company officials begin focusing more on optimization and personalization.

How do you think the Chipotle Rewards program will fare in the future?

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