Donatos Pizza has undergone a transformative journey with its loyalty program, incorporating feedback, data analysis, and personalised approaches to enhance customer engagement.
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GLODonatos Pizza observed the loyalty programs offered by its competitors five years ago and decided to develop its own program. Initially, the program created by the Ohio-based pizza chain had various elements but lacked expertise and clarity on its impact. In 2018, Donatos partnered with Stellar Loyalty (now Marigold) for email marketing and tested a loyalty program in early 2019. The analytics work by Marigold highlighted issues with the program, where the discounts outweighed the profits.
Donatos then made changes to the loyalty program, focusing on earning points for free pizza. However, this second version faced its own challenges, leading the company to enter “survival mode.” Through testing and learning, Donatos discovered that only a small percentage of loyalty program members were benefiting from rewards, and a significant portion of issued rewards went unredeemed. Based on these findings, the pizza franchise introduced on-demand rewards at different price points, allowing customers to gain value without saving up points over time.
Over the past five years, Donatos’ efforts have resulted in growth, with increased program participation and a higher redemption rate for rewards. Approximately one-third of net sales now come from the program’s on-demand rewards members. The company also tracks member engagement through badges, with a majority of members earning them.
Donatos aims to further increase the percentage of orders attributed to rewards members. Working with Marigold has provided the marketing team with consolidated customer data, enabling them to identify patterns, segment audiences, and personalize messages. By utilizing zero-party data (customer-provided information) and first-party data (purchase activity and order history), Donatos tailors its offers to specific segments and strives to move customers up to higher tiers in the loyalty program.
In summary, Donatos Pizza has undergone a transformative journey with its loyalty program, incorporating feedback, data analysis, and personalized approaches to enhance customer engagement and program effectiveness.
