Chipotle rewards program follows Starbucks’ strategy

Chipotle launched a new rewards
program.
Hollis
Johnson

• Chipotle
  is rolling out a new rewards program in three test markets,
  with plans to expand the program across the United States in
  2019. 
• Chipotle Rewards represents a
  larger effort from the chain to use technology to grow
  sales.
• The rewards program takes a page out of Starbucks’
  playbook. The coffee chain has been relying on its digital
  loyalty program to boost sales and collect data on customers for
  years. 

Chipotle
is rolling out a new rewards program in hopes of boosting
sales. 

On Monday, the fast-casual chain
announced it is rolling out a new loyalty program — Chipotle
Rewards — in three test markets: Phoenix, Arizona; Kansas City
(both in Missouri and Kansas); and Columbus, Ohio. Chipotle
Rewards will launch nationally in 2019. 

The rewards program is similar to that of other chains, such as
Starbucks and Chick-fil-A, that award a certain number of points
for each dollar spent. Members can earn 10 points for every $1
spent, with customers cashing in for a free entrée when they
reach 1,250 points. 

Chipotle Rewards represents a larger effort from the burrito
chain to better use technology to grow sales. Chipotle has
continued to struggle to rebuild sales to the levels it saw prior
to its E. coli outbreak nearly three years ago. 

Hollis Johnson/Business
Insider

In April, Chipotle
launched a partnership with DoorDash. The chain has been
pushing for customers to download its app with incentives such as
free guacamole and
tweaking the format of stores to better fit the needs of
customers picking up mobile orders. Chipotle is even
testing drive-thrus exclusively for mobile order at a handful of
locations. 

“Chipotle Rewards is a critical part of our efforts to digitize
and modernize the restaurant experience,” Curt Garner, chief
digital and information officer at Chipotle, said in a
statement. 

While rewards programs have an obvious benefit of building
customer loyalty, the increasingly digital nature of the programs
gives chains even more reasons to encourage people to sign up, as
it allows companies to gather more data on customers. 

In a statement, Chipotle said that the rewards program “also
includes a highly sophisticated, hyper personalized CRM program
running behind the scenes which allows for targeted communication
to drive trial, menu exploration and brand affinity.”

Starbucks has been an industry pioneer in digital rewards
programs. While sales overall at the company have flattened in
recent years, mobile orders remain
a bright spot. In addition to helping drive mobile sales,
Starbucks’ rewards program gives the company a chance to
gather data and push personalized deals to customers — a
strategy Chipotle now seems eager to imitate.