Dive Brief:

• Chipotle added more types of rewards to its loyalty program, including entree discounts, recurring free bonuses and a longer lifespan for points, according to a press release. Points will now remain active as long as diners make one qualifying purchase every year, as opposed to one every six months. 
• The loyalty changes, called “Rewards on Repeat,” are accompanied by an overhaul of Chipotle’s rewards in-app interface that “centralizes all Rewards content into a single, easy-to-navigate destination, improving visibility into points balances, redemption progress, challenges and offers,” the company said.
• The changes are intended to boost traffic and frequency among guests, per the press release. Chipotle has struggled to drive same-store sales growth in recent quarters as a result of price sensitivity with its core consumers.

Dive Insight:

Chipotle’s rewards program is a major traffic driver, with 21 million active members. Upwards of 90% of Chipotle’s digital transactions are connected to its rewards system in some way, but only 20% of its in-store transactions are, per the release. Chipotle will leverage the new program in an effort to increase the volume of loyalty-connected, in-store transactions. 

The chain is “launching a comprehensive in-restaurant acquisition campaign alongside the relaunch. The effort includes prominent in-store placements such as menu panels, table tents, cups, receipts and cashwrap messaging to capture guest attention,” according to the press release.

This will also be accompanied by additional training for workers to ensure they communicate consistently with consumers about the rewards. Chipotle will roll out a systemwide incentive program connected to member signups to support this employee focus on loyalty acquisition.

For customers, the chain is adding several new rewards features. New members will now receive free chips and guac for signing up. Consumers also have 30 days to redeem birthday rewards and can select their reward, such as guacamole, queso, chips or a fountain drink. The brand is bringing back Freepotle, its recurring free food promotion, and will offer consumers a free monthly bonus reward with a qualifying purchase. 

One of the more notable changes is the addition of new categories of rewards at lower point thresholds. Chipotle currently allows consumers to redeem a full entree. Under the new program, they will have the option to redeem a 50% discount for fewer points, giving earlier access to a discount. 

When coupled with the push to recruit new members in-store, Chipotle’s moves could help it convert one-time consumers into regulars. In a recent report on the cutting edge of loyalty, restaurant tech firm Paytronix noted the chain’s badge-based gamification system has helped drive frequency in the crucial 90-day window after consumers join the program. The new changes strengthen the incentives for early visits. 

Chipotle could use the traffic assist. The brand has seen same-store sales slip in three of the last four quarters. That erosion, especially drops in transactions, has pushed the brand to launch a multi-pronged “Recipe for Growth” turnaround plan.