Dine Brands, the parent company of Applebee’s and IHOP, is investing in digital technologies to target changing consumer habits, driving spending both through digital channels and at its restaurants.
“The main areas of investment for capital expenditures are on-premises and off-premises technology to improve customer experience and operational efficiency,” Dine Brands chief financial officer Vance Chang told analysts during of a phone call on Wednesday March 2. annual results 2021. “We spend money on loyalty [programs, customer relationship management (CRM) and] Infrastructure.”
While Applebee’s comparable sales in the quarter were up 9% from 2019, IHOP took longer to recover from the pandemic. Pancake brand comps were down 3% on a two-year stack. In an effort to increase these sales, increase the frequency of visits and learn more about its customers, IHOP is launching its loyalty program by the end of the first quarter (i.e. in the coming weeks), said IHOP President Jay Johns.
“It’s a true earn and burn program that allows our customers to collect and redeem rewards when they dine with us,” he said on the call. “We believe this program will be a fun and engaging way for us to build even stronger bonds with our customers, build brand loyalty and generate additional visits.”
A large portion of restaurant customers — more than four in 10 — now use loyalty programs, according to data from the January edition of PYMNTS and Paytronix’s Digital Divide report, “The Digital Divide: Minding The Loyalty Gap.” . The study, which highlighted results from a survey of a census-balanced panel of more than 2,400 American adults, found that about a quarter of consumers use loyalty programs in all or nearly all the restaurants where they often shop.
Read more: Restaurants compete for loyalty programs to stand out as consumers join multiple programs
Johns added that the brand intends to use the program to deliver value to consumers beyond typical free food rewards.
“There will probably be chances for [members to earn] things other than food,” he said on the call. “We sometimes have the opportunity with these special programs with vendors etc. where they might be able to get more experienced rewards.”
Consumers are primarily looking for food rewards, but there is nonetheless a significant share of restaurant customers interested in alternative offerings. A study from the August edition of Delivering on Restaurant Rewards, created in collaboration with Paytronix, which is inspired by a census-balanced survey of more than 2,000 American consumers, found that 77% of restaurant customers consider the availability of complementary foods when deciding to enroll in loyalty programs and 66% consider the availability of personalized coupons or discounts.
See more : Two-thirds of consumers find restaurant rewards impersonal
Less than half of consumers, but still a significant portion, consider other types of rewards. Thirty-eight percent, for example, are considering the ability to access peak hours, 32% are considering personalized menus, and 27% are considering ordering suggestions.
As IHOP prepares for this loyalty launch, Dine Brands is globally investing in technologies to improve its ability to target customer preferences through this loyalty program and other digital platforms.
As John Peyton, CEO of Dine Brands, told analysts: “Importantly, we have implemented a new CRM and digital platform which has significantly improved our digital marketing and marketing analytics, which serve as the foundation to our loyalty programs.