Chick-fil-A has a loyalty program. Here’s how it pays off

Sunday, 17 Apr 2016 | 11:00 AM ET

Chick-fil-A
When it comes to running a business, Chick-fil-A makes its own rules.

Unlike many of its competitors, the restaurant is closed on Sundays, underscoring how it doesn’t try to please everyone. It’s loyalty program for its most devoted regulars, however, may be a different story.

Chick-fil-A’s perks program — which entitles participants to free food, private tours and special events — may be the most extensive of its kind, yet many of its customers don’t even know it exists. It’s currently offered in barely half of the company’s more than 2,000 restaurants. The catch: A ‘by invitation only’ model means customers can’t actively seek it out.

The Georgia-based company told CNBC the program, which started in 2013, was put in place for customers to experience more customized rewards and communication from their local restaurant. Ultimately, Chick-fil-A hopes it will strengthen the bond between its customers and the restaurant.

Friendly customer service goes in line with the company’s community-based approach to serving its customers, a company executive told CNBC.

“Our founder, Truett Cathy, founded Chick-fil-A with a focus on great hospitality, learning from others who are at the top of their game in the hospitality industry,” said Carrie Kurlander, vice president of public relations at Chick-fil-A. “Our use of, ‘It’s my pleasure,’ was inspired by Cathy’s appreciation of the Ritz-Carlton’s service model.”
A-List membership means everyday customers get access to an app where they can learn about events and giveaways. Brittany Breen considers herself a Chick-fil-A fan, particularly appreciating the staff’s eagerness to please.

“It’s like a local coffee place that knows how you like your coffee,” she told CNBC. “It’s more of a personalized experience.”

The staff at her local restaurant outside Philadelphia knew her usual breakfast order, and some of the staff even followed her on Instagram. So the day she was inducted into its secretive, invite-only A-List rewards program, she was taken by surprise — particularly because she didn’t know what it was.

The first event she attended took place at a local store, where she was allowed to bring a guest and joined by about a dozen other A-Listers.The group was given free dinner, and took a private tour of the kitchen. “I was actually really surprised with how fresh everything is,” she said. “When you think of fast food, you think it’s made fast, but they really put a lot of care and consideration into their ingredients.”

Other fast-food restaurants feels “like a business transaction,” Breen said. “At Chick-fil-A, it’s more of a community center,” she added, also citing the social events calendars and local fundraisers in schools.

“I’m not just a number there, I’m a member of the community.”

‘I have to get my name on that list’

Chick-fil-A’s approach to food service has helped the company pull in more than $5 billion in annual sales, transforming its model into whatsome observers have called a potential McDonald’s killer. The chain’s customer base is among the fast-food industry’s most loyal, even when they don’t get the red carpet treatment. Chick-fil-A is ranked number one for customer satisfaction in the Limited Service Restaurants industry category, according to the 2015 American Customer Satisfaction Index. It recently received the highest ACSI score the industry has seen.

The high brand loyalty is paying off for the chain. According to a QSRreport last year, Chick-fil-A generated more revenue per restaurant than any other fast-food chain in the U.S., averaging sales of $3.1 million per restaurant compared with KFC’s $960,000.

Henry Kurusz, who lives outside of Tampa, is not in the A-List program but is a card-carrying member of its calendar program. That entitles him to free menu items every month.

Kurusz recently attended the Masters Golf Tournament, where the event’s customer service reminded him of his favorite chicken chain. “At the Masters, everywhere you went the staff always saying is, ‘my pleasure,’ and my first thought was like ‘this is just like Chick-fil-A,'” he recalled.

Prior to hearing about the A-List program, Kurusz was content just being a card-carrying member, but now he’s on a mission. “I need to figure out how to get into the A-List, even if it means buying more chicken, I guess that’s what I’ll do.”

The focus on friendly service is powering Chick-fil-A’s growth at a time when the fast-food industry is reeling from increasing competition and changing trends. In Michigan, the chain plans to go from its current two locations, to 20 in the next five years.

Bonnie Riggs, a restaurant analyst at NPD Group, said the only way for fast-food chains to drive an increase in store traffic in the current landscape is to seek loyal customers. Riggs said that “people want to be recognized for their loyalty. Chick-fil-A has very strong brand loyalty to begin with and they’re just reinforcing it. When the industry sees the impact of this kind of program, others will try to follow suit and invent a similar program on their own.”

Might larger competitors like the Golden Arches and Burger King mirror the intimacy of Chick-fil-A’s community-based rewards?

“That remains to be seen,” Riggs said. “Maybe at a local level or if a few franchisees get together.”

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