What millennials want from QSR loyalty programs

Engaging customers is hard. There are more than 30 billion mobile moments happening every day in the U.S. according to research from Forrester Research, Inc. And marketers must be ready to meet customers in these moments and deliver compelling experiences that will engender loyalty. This is especially true for quick serve and fast casual restaurant (QSR) operators – whose customers are inherently on-the-go and whose business model limits the amount of in-person and online interactions with customers.

The QSR industry has experienced steady growth over the past several years but escalating costs, technology changes and growing competition are the realities facing this market. Evolving consumer attitudes, desires and technology preferences impact QSR demand, making it critical for marketers to know how to engage their customers.

How can QSR operators succeed in the age of the consumer by changing their loyalty mindset to deepen customer relationships?

An online study of 400 millennials conducted by Epsilon in June 2016 aimed to help restaurant brands better understand and attract this key demographic based on their usage and attitudes.

Key findings include:

Millennials have an appetite for QSR

Millennials are not consciously staying away from QSRs with 70% of respondents reporting visits to QSRs weekly or more. Further, 76% of respondents report the same or more frequent visits to QSR establishments than in the past.

  • 53% of millennial moms report visiting QSR restaurants more frequently compared to only 43% of millennials living with their mom
  • Single millennials living on their own are most likely to visit QSR restaurants daily

And millennials want to be recognized for their patronage through points, discounts or surprise offers. But 47% of millennials report not belonging to any restaurant loyalty program (53% belong to 1-3 programs). There is definitely a relationship between visit frequency and loyalty program participation; for instance, millennial moms are the most likely to participate in loyalty programs while those living at home are least likely (and their QSR visit frequency follows a similar pattern).

QSR customers crave more than convenience  

The ability to pre-order is the primary driver of increased visits and while 57% of respondents report that they keep coming back to fast food because “it’s fast”, those convenience drivers are hardly the only reasons for repeat visits.

  • 55% of respondents return because the food “tastes good” while 54% report it’s the “low prices” that they are after
  • Younger millennials are more likely than older millennials to cite taste as a key driver (it’s #1 for them) as well as those living with family and for millennial moms

Still, there are things keeping millennials away. 44% of respondents cited their perception that QSR food is unhealthy as the number one reason they refrain from dining with QSRs.

  • 39% say the food is “too processed” and 34% “want healthier options.” In particular, 48% of millennial moms stay away from fast food because it is “not healthy/nutritious,” and 42% feel it is “too processed”

Unrelated to health, a significant number of millennials (24%) don’t visit more frequently because establishments get their order wrong.

Millennials want communications served up – but not necessarily via dedicated apps

Mobile ordering is gaining adoption with millennials. 52% of respondents reported using mobile ordering at least once with only 21% reporting they “don’t plan to” take advantage of the functionality in the future. But millennials aren’t sold on engaging with QSRs solely via mobile apps—they need to see the benefit to them. 44% of millennials “probably” or “definitely would” download a restaurant app if it would provide them some benefit while 24% “already have.”

  • Savings and convenience top the list of app benefits for millennials but there is an opportunity for innovation. Millennials would also be interested in access to information about other factors that drive their engagement with QSRs.
    • Sustainability participation
    • Ability to track food from the farm
    • Menu tracker
    • Sourcing info

Other communication preferences include:

  • 31% of millennials surveyed prefer to be communicated to via email while 35% prefer TV
  • Younger millennials are more likely to go to digital sources while millennial moms’ reliance on smartphones shows up in their preference for text-based coupons
  • The most straightforward discount is most motivating but millennials are also interested in discounts via apps and time-triggered offers
  • Social sharing should be encouraged by QSR operators with 48% of respondents reporting that they “frequently” or “sometimes” share fast food reviews on social

Fodder for loyalty

The most familiar loyalty mechanisms resonate with millennials – they want to be rewarded for their patronage. Millennial moms are the most promotionally sensitive segment, while younger millennials (whether they live on their own or in the family home) are least swayed by offers to change their behavior.

Points per dollar is the #1 ranked loyalty mechanism for millennials, but there is more to consider and visit frequency and dining preferences are stratified by life-stage, not age.

  • Singles favor points per dollar, and are least motivated by random surprises
  • Older millennials and moms are the most convenience-oriented segment and drive a preference for auto-discount programs.
  • Younger millennials, with their tighter budgets and high visit frequency, prefer points per purchase (regardless of dollar value).

When it comes to the types of rewards they prefer, most millennials are motivated by fairly straightforward monetary rewards, more than perks such as reserved parking, secret menus, or free entertainment downloads.

  • 81% of millennials prefer free/discount food for their loyalty
  • 63% of millennials prefer free/discount beverage
  • 31% find a speed line attractive in driving loyalty