Little Caesars, American Express Team Up on Utah Mailer
As part of a test to determine whether to accept the card nationwide at its 4,700 outlets, Little Caesars, Detroit, teamed with American Express, New York, to accept the card throughout its 51 company-owned stores in Utah. Some Little Caesars franchisees accept credit cards for payment, but no systemwide standard exists for pizzas and other menu items purchased using plastic. This is the first time the chain has offered American Express.
To promote acceptance of the card, the two sent a direct mailer coupon to 70,000 American Express cardholders located near Little Caesars stores in Utah. American Express developed the list from its database of cardholders residing in the targeted areas. The piece features the Little Caesars cartoon spokesman announcing that customers can now "Charge! Charge!" and offers patrons two 12-inch pizzas for $7.99.
"Because we know a lot of card members want to use charge cards at fast-food locations, we think we are going to have a great response," said Aldina Tracy, a spokeswoman for American Express who worked on the program.
Tracy said it is too early to tell what response the piece will generate since it was dropped three weeks ago. The coupon expires June 1, and the results will be used to help determine whether to roll out the card systemwide.
"We are offering this for convenience and to drive traffic into the store, especially for impulse buying and for ease of purchase," said Little Caesars spokeswoman Tracy Lark. "Ultimately, we hope to accept them in all of our restaurants."
The partnership will allow Little Caesars purchases to go toward the charge-card company's loyalty and continuity program, Membership Rewards, which provides travel-related discounts for points earned on dollar purchases for 3 million members.
"The capability of the American Express database allows us to design customized programs to [entice] cardholders to come into the restaurant to help the merchant build business," Tracy said. "Progressive merchants are recognizing customer demands and in order to provide better customer service, are looking at payment choices."
Although the profiles of a Little Caesars and American Express customer may not seem similar, American Express said it has uncovered a number of parallel attributes among cardholders and quick-service customers. The company just released a study that cited convenience as the primary driver for using charge or credit cards at quick-service operations.
"The trend by consumers to consolidate their spending on plastic and rely less on cash is reaching the fast-food industry," said Lloyd Wirshba, vice president and general manager of American Express' Restaurant and Entertainment Industries division. Arby's and a handful of McDonald's franchisees also accept American Express.
The study noted that 20 percent of consumers surveyed have used credit or charge cards for quick-service purchases over the past year, with 26 percent saying they would like the option of paying with plastic. Of those who have used plastic, 77 percent cited convenience as the primary reason.
American Express said the average quick-service purchase for a family of four runs between $20 and $25.
"If you think how often they eat out once a week, that is $100 a month -- and that means $1,200 annually," Tracy said. "Just think about the points you can earn toward the Membership Rewards program."
Membership Rewards allows card members to earn a point for every dollar spent on an enrolled, eligible American Express or Optima Card. The points do not expire and can be redeemed for travel, merchandise, sports rewards and gourmet foods through 56 partners, including 33 retailers, 14 airlines and three car-rental companies.