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Loyalty Limelight: P.F. Chang’s Preferred

Loyalty Limelight (light)-01The initiative: P.F. Chang’s Preferred, by P.F. Chang’s China Bistro

In a nutshell: In mid-November, P.F. Chang’s introduced its new program, P.F. Chang’s Preferred, to members of its Warrior Rewards program. Existing members received exclusive invitations to join the program at that time, while non-members will be able to join in 2015, during which the program will evolve to provide “greater rewards, a new website and mobile app.”

P.F. Chang’s launched Warrior Rewards in 2012. In July 2013, company CEO Rick Federico sent members email messages stating that it planned to update the program. “We know we can do better. Therefore, as we strive to deliver a better, more compelling experience, we will be making some exciting updates to our rewards program,” the message stated. At that time, the company discontinued all new registrations. “This will allow us to focus on delivering the best possible experience when we relaunch our improved Rewards Program,” the company posted on its website.

Features: Members of P.F. Chang’s Preferred program earn 10 points for every dollar spent on food (alcohol and gift cards are excluded). Once a member earns 2,000 points, he or she receives credit for a free entrée. By contrast, Warrior Rewards periodically sent surprise rewards to members.

Other features of Preferred Rewards  include:

•     New members will receive 1,000 points upon enrollment, getting them halfway to their first free entrées.

•    The free entrée reward will automatically be applied to the highest-priced qualifying entrée.

•     Members each receive a complimentary appetizer or dessert in the month of his or her birthday.

•     Members who receive P.F. Chang’s gift cards earn points on the purchases they make with the cards.  Points are not rewarded on orders made through third parties, such as DiningIn.

The Takeaways: While the changes took a while to implement, I admire the willingness of the organization to press the pause button while it reset the program for customers. Too often we see brands allowing programs to remain in the market without acknowledging the need for them to change and become more relevant for both the consumer and company.

• I also appreciate the number of changes, which are designed to entice more frequent visits by customers. Two excellent examples of this are that only one reward can be used per purchase (with the exception of birthday rewards) and the fact that rewards, once earned, expire 60 days after they are issued. These can be perceived as constraints to the customers, but if this program is to work, the customer has to be motivated to return more frequently to create a meaningful value exchange. For many reward programs, a mechanism that creates a sense of urgency and action is a compelling way to pick up the engagement level with the customer.

• I appreciate the fairness aspect that’s inherent in the program design. Free entrée rewards automatically apply to the highest-priced entrée on a reward member’s next dining bill, and points are applied to take-out and online orders. These items help eliminate the risk of members forgetting to use the benefits they have earned.

• By contrast, points expire if the Preferred account is not used in a 12-month period or if it does not earn a reward in a two-year period. But then I am sure P.F. Chang’s is working to manage its ongoing liability and it really wants to connect with its most frequent and engaged customers.

• This brings me to the final question and maybe one that will be answered in time as the program evolves: Will P.F. Chang’s also use the data it obtains to enhance the customer experience by making order suggestions based on previous visits, or by using the customer’s past habits to encourage the trial of new products on the menu.

P.F. Chang’s is still putting the finishing touches on the program. Its website has not advised members when they will have access to a mobile app or the other “greater rewards.” However, the program is free and members who enroll do know they can earn toward that free entrée. Perhaps we will see the true intent of P.F. Chang’s initiative once it fully reveals the program and the related experience enhancements to customers in 2015.

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