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Loyalty programs have become a key driver for major companies looking to draw in customers while the pandemic has hobbled normal operations and weakened sales across the industry.
Panera's program, one way the company has been able to cater to its guests during the pandemic, has grown to such heights due to the coffee subscription program, which has roughly 800,000 subscribers to date, Eduardo Luz, Panera's chief brand and concept officer, told FOX Business.
"Subscription is a business model that is successful across industries and one consumers are familiar with," Luz said. "For Panera, coffee subscription was a simple way to bring joy, convenience and value to our customers while tapping into their daily habits. We believe subscription models can thrive in the restaurant industry when they focus on truly solving guests' daily conflicts.”
Panera launched MyPanera+ Coffee, its unlimited coffee subscription program and an extension of its loyalty program, in March when restaurant operations were being upended across the nation.
Last month the company revived its coffee subscription by offering customers who signed up before July 4 free coffee or tea through the fall. To sign up, however, customers need to first become Panera loyalty members.
During the pandemic, experts say the most successful businesses have not only worked to attract new customers but also have worked on ways to retain existing customers, entrepreneur and marketing expert Tom Maoli told FOX Business.
"Studies have shown that gaining a new customer is actually 25 times more expensive than keeping an existing one, which means it is better spent in retention of existing customers," Maoli said. "This is why retention and loyalty programs are paramount and have become very successful for businesses."
Maoli added that when customers feel like they can gain value, they will most definitely return to gain their loyalty points.
"I have seen people drive out of their way to gain loyalty points, Maoli added.
Panera's loyalty program kicked off in 2010. More than 50 percent of Panera transactions derive from loyalty program members, Panera said.