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Burger King launches loyalty pilot, joining Starbucks, McDonald's in COVID-era 'digital transformation'

·Reporter, Booking Producer
·4 min read
In this article:
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Burger King (QSR) is piloting an app-based loyalty program in key markets, the fast food giant announced on Tuesday, joining competitors like Starbucks and McDonald’s who have aggressively embraced the digital revolution in a landscape transformed by COVID-19.

The maker of the Whopper will test its program in Los Angeles, Long Island, Miami, New Jersey and New York City — something a top Burger King executive called a “big step” toward a chapter of digital transformation.

The “Royal Perks” program allows loyalty members the ability to earn 10 “crowns” for every $1 spent, and can use them on “a majority of menu items,” the company states. In addition, there are daily perks like the option to upsize one drink, fries, or hash browns for free per order, per day.

“The stakes are high around a guest in participating in your loyalty program, so we see that and we want to make it worthwhile,” and not have guests burn points on their orders daily, Ellie Doty, Burger King’s chief marketing officer told Yahoo Finance in an interview.

In addition, there is now another perk to go there on customer’s birthday, beyond the iconic crown.Throughout their birthday month, customers can earn double crowns.

“This is a new chapter of that a new digital format of that [birthdays]. It just makes sense to us that we have always been celebratory, we've always been a place where you have it your way. It's important to us to go above and beyond the usual perks on your birthday to perks all month long,” Doty explained.

(Courtesy: Burger King)
(Courtesy: Burger King)

This is all part of an ongoing “journey to ensure that we're creating the very best guest experiences that we possibly can,” according to Doty. Recently, the company announced a complete rebrand for the first time in 20 years, and a completely touchless restaurant design.

To be certain, Burger King is a late entrant in the race to engender customer loyalty. In recent years, food and beverage chains like the Golden Arches, Starbucks and Dunkin Donuts have leaned in heavily on app-based rewards to keep consumers coming. The shift to digital became more pronounced as the pandemic dramatically restricted in-store dining.

“COVID accelerated digital adoption and digital behaviors,” Doty told Yahoo Finance. “We definitely have accelerated along with that. We want to be in the channels and offering the experiences that are the best for our guests.”

For now, Burger King has no timeline on when the loyalty program may be available in other cities. Doty added that the company wants to “make sure we get it right” before committing to an expansion.

“It's important that we create seamless experience at the restaurant, we want our franchisees and our team members to be set up for success. That's why we're being thoughtful in the way we roll it out across the country,” she added.

Shares of Restaurant Brands International, Burger King parent company, ended nearly 0.5% higher in Monday’s trading, but are down 6.20% from a year ago.

IHOP entices customers to download membership app 

While customers normally flock to their local International House of Pancakes (DIN) on Tuesday, February 19th for National Pancake Day and that notorious free short stack of Buttermilk Pancakes, IHOP hopes to use the national holiday to entice customers to download their membership app.

In the official release titled, "IHOP Cancels Annual National Pancake Day and Issues Guests an “IOU"” the company shares the deal to score a free short stack starting on April 1st, 2021 with the download of its MyHOP membership app. 

"Those who register for MyHOP by March 31, 2021 [will receive] an IOU coupon good for a free Short Stack of buttermilk pancakes starting on April 1, 2021," the statement continues, "that coupon can be redeemed throughout the month of April in-restaurant or to-go via IHOP.com or the IHOP Mobile App." 

According to the release, there are already nearly 9 million existing MyHOP email club members. Jay Johns, President at IHOP emphasized the importance of this day and this unique offering, along with the impact of the coronavirus pandemic on indoor dining,

"While we look forward to celebrating National Pancake Day with guests under our blue roof in the future – we recognize it’s not possible to gather millions of our closest family and friends in our restaurants on a single day this year. As a result, we decided to flip National Pancake Day on its head and give our guests an entire month to redeem their free Short Stack with an IOU, while also continuing to put purpose behind our pancakes by giving back to those most in need: our charity partners," Johns stated in the release.

For 16 years, IHOP has taken part in the celebration, raising money for those partners including Children’s Miracle Network Hospitals, Shriners Hospitals for Children and Leukemia & Lymphoma Society. 

Shares of Dine Brands Global, IHOP parent company, are down more than 20% from a year ago.

Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma.

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