Duffy’s Wins at Loyalty Marketing

Client: Duffy’s Sports Grill
Vendor: Paytronix
Objective: Increase loyalty, retain customers, and drive sales with an enhanced, data-driven rewards program

The Back Story: In a world where loyalty isn’t always on the menu, Duffy’s Sports Grill is hitting it out of the park with a program that boasts more than 400,000 members.

According to a 2014 report from Deloitte, an estimated two thirds of consumers say they don’t have a “personal relationship” with their most frequented restaurant brand, and only about 25% consider loyalty programs to be an important factor in selecting a restaurant.

Duffy’s defies these statistics. Loyalty fuels marketing strategy at the company, which operates a string of full-service, casual-dining restaurants in South Florida. It wasn’t until 2010, however, that Duffy’s took steps to transform its long-running MVP Rewards program into a truly customer-centric loyalty experience.

That’s when Duffy’s took the raw potential of MVP Rewards and, with tools from marketing-tech provider Paytronix, developed a data-driven loyalty strategy.

The Solution: With more than 400,000 rewards members, Duffy’s has access to a delectable—and daunting—amount of data. The ever-present goal for the restaurant chain is to focus on information that enables marketers at Duffy’s to serve up more relevant offers. So, the sports grill chain set up a point-of-sale integration system that helps with everything from data capture to personalization. For example, Duffy’s can use its data to build segments and trigger communications for specific customer groups based on previous purchases.

“Let’s say we want to know how many people came in during a particular promotion and had ribs; we can go back and pull a segment of those people to contact about our new rib special,” says Sandy Nelson, director of marketing at Duffy’s. “Or, we can see how many people enjoyed a specific product within the last six months…and tailor a message specifically to them.”

Duffy’s can send triggered email communications based on nearly any conceivable segment in real time. “We can acknowledge guests for coming in or we can thank them for redeeming points or trying a new item,” Nelson says. “We customize how we interact with different segments of guests, we don’t use email to blast promotions, and we message our members in ways that are more specifically related to their behavior, which also helps us build the relationships.”

CRM always works best in conjunction with segmentation—but you can’t always trust your audience to give you the information you need, says Michelle Tempesta, head of the product group at Paytronix. So, rather than just looking at what its loyalty members say, Duffy’s takes note of what they do. Consider the question, “Do you have children in the home?” Certain patrons who could answer no—aunts, uncles, grandparents—may still be extremely likely to purchase a kid’s meals.

“Relevance is a huge multiplier of results,” Tempesta says. “A lot of the time it’s about behavioral data versus reported data.”

Mobile has also recently become a big part of the brand’s game plan. This past March Duffy’s rolled out mobile sign-ups for its MVP program. Customers can now enroll in the MVP program through the Duffy’s mobile app, via text, at duffysmvp.com, or at MVP kiosks located in each restaurant. Duffy’s also launched mobile check-in to allow loyalty members to go card-free.

The Mechanics: The MVP program is composed of three tiers: a pool of less active participants, called MVPs; All Stars, who spend at least $1,000 within one year; and the truly dedicated Hall of Famers, who spend a whopping $3,000 or more in just one year. Rewards increase with each move up the ladder. All Stars earn more points per purchase and are eligible for On Deck Seating, which allows patrons to skip the line if there’s a wait. Hall of Famers get even more points per purchase, as well as access to other perks not available to the rest of the loyalty population, including tickets to Miami Dolphins football games.

“[Spending by customer is] one major thing we were able to see when looking at the integrated data,” Duffy’s Nelson says. “It allows us to analyze where the best bang is for our buck, and helps us better understand how folks engage with us, which then informs our strategy.”

The Stats: Though there are only about 8,000 All Stars and 1,000 Hall of Famers—just a fraction of the program’s 400,000-plus membership—their activities generate a huge percentage of overall sales, and Duffy’s in return showers them with appreciation. Duffy’s values all of its loyal customers—more than 70% of total sales and transactions come from its loyalty program; retaining top-tier members is a particular priority, and Duffy’s uses data to do it.

“If you didn’t really know who these people are, you’d only know you lost them when your sales dipped,” Paytronix’s Tempesta notes. “We have customer data that says one higher-value guest is the equivalent of between 10 and 12 average guests in terms of revenue—and everyone knows how much it costs to acquire a new customer.”

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