Could a Rewards Program Save Chipotle?
Chipotle has seen better days with busy dining areas and long lines wrapping around the building, but it is becoming less so lately. The burrito giant has been under fire for multiple E. coli outbreaks, which severely sickened customers.
Mashable reported Chipotle’s fourth-quarter revenue in 2015 was down 30 percent compared to the same period a year earlier. This is particularly bad news for the company, which was considered a growing success.
The once-invincible brand has now fallen on harder times, with sales plummeting and the lives of employees being affected. According to Business Insider, paper manufacturer Huhtamaki laid off around 30 employees just after the holidays. Huhtamaki produces the paper bowls used by Chipotle, which were accumulating, while the demand declined.
The downturn has forced the company to take somewhat drastic measures. The food chain is scrambling to repair the damage done. It will be shuttering its doors for a short period of time on Feb. 8 to address the health issues.
“We are hosting a national team meeting to thank our employees for their hard work through this difficult time, discuss some of the food safety changes we are implementing, and answer questions from employees,” Chipotle spokesperson Chris Arnold said in the Mashable article.
The company is launching a marketing effort in mid-February to encourage customers to return to its restaurants, Business Insider reported.
“We are making an unprecedented effort to reach out to our most loyal customers with a detailed story about what happened,” Chipotle Chief Marketing Officer Mark Crumpacker said in the BI article.
Though Chipotle has a dedicated, enthusiastic following, the marketing effort may not be enough to ensure people return, especially with a tarnished record. A comprehensive customer loyalty program may be the saving grace the company needs, in addition to the mobilized internal reform.
The Huffington Post reported that Chipotle does have a loyalty program, albeit a borderline-secret one.
The program, called the Farm Team, is a customer rewards program with “an educational focus on factory farming and other aspects of the food industry.” The rewards are pretty standard for Farm Team members, with the opportunity to win free food, t-shirts and potentially even catering orders worth up to $200. The caveat of being a rewards member? Joining the program requires an invitation code, which isn’t an easy find.
It has been alleged a code can be obtained if you convince a local Chipotle manager to help you out. Someone bought an invitation code for $45 in 2013, HuffPo reported.
Customers spending disposable income on Chipotle products shouldn’t have to search high and low for a loyalty program, it should be seamless and easy to understand with exciting rewards.
Implementing a program similar to that of Panera Bread’s, which offers customers complimentary bakery goods, exclusive previews of new items, tastings and recipe books, among other perks, would greatly benefit Chipotle’s struggling sales. Though Panera’s program is a great model, Chipotle wouldn’t have to do a lot of heavy lifting to create rewards, considering there is already a program. Changing the Farm Team from mysterious to accessible has the potential to excite customers (more than they already are) to continuously return.
Once the detailed story of what happened and all has been absolved, a loyalty program may convince forgiving customers to continue to return. Reward the customers that have maintained unwavering support through the bad and ask for forgiveness with a robust program, while ultimately enhancing customer experience.