Dive Brief:

• White Castle launched its first systemwide loyalty program, dubbed Craver Nation, on Thursday. Customers can sign up via the QSR's mobile app and will receive a free combo meal with four Original Sliders, a small order of fries and a small soft drink, as well as more than $10 worth of additional savings to use in September. The program was trialed in Louisville, Kentucky, earlier this summer, White Castle Vice President Jamie Richardson said. 
• Discount coupons and special offers will be added to the program each month, and loyalty members can participate in customer surveys that inform new product offerings and access "other exclusive content and experiences" and buy White Castle branded merchandise before the general public. 
• As mobile and online ordering proliferate amid dining room closures and other social distancing restrictions, major chains are turning to rewards programs to bolster their digital offerings and deepen customer loyalty. Just this summer, Wendy's, Uber Eats and Taco Bell have all rolled out new or revamped loyalty offerings.

Dive Insight:

White Castle had partnered with tech platform Plexure and had a loyalty program in its crosshairs before the pandemic hit, Richardson said.

"It was something that was definitely on the radar screen ... that we were working toward," Richardson said. "Back in March ... the decision with this opportunity was to march ahead."

The burger chain put other projects on hold when COVID-19 began disrupting the U.S. landscape, Richardson said, but accelerated its loyalty test and rollout so that the company could meet consumer demand for more contactless experiences and grow its digital offerings. White Castle's loyalty engagement scores are 40% higher than the industry norm, Richardson said.

Investing in a rewards program is a savvy way to retain a loyal customer base and entice new diners, especially when people may be exploring new restaurant options on third-party delivery apps as the pandemic stretches on. Nineteen percent of consumers said a loyalty program would entice them to try a new QSR, and 30% of consumers said they would download a restaurant app to receive loyalty points, according to a 2019 Publishers Clearing House study. Customers enrolled in loyalty programs also spend more on average than unenrolled diners, which could help restaurants boost sales in this challenging economic environment. 

Chipotle may be the best example of how a robust loyalty program can help digital sales thrive amid the pandemic. In April, the chain reported that its loyalty program now boasts 11.5 million members and that signups increased almost fourfold in March. Sixty-five percent of loyalty members are new to Chipotle, compared to 51% prior to the COVID-19 outbreak. Digital sales grew 81% to $372 million for the period, the highest quarterly level for digital sales — representing 26.3% of total sales. 

Loyalty programs can also create a sense of excitement for consumers by offering unique perks that can differentiate offerings from competitors. Competitive pricing discounts are also key, especially as diners may be feeling the pinch of the pandemic financially.