I am once again compelled to write about Panera Bread’s awesome marketing strategy.
I have about 10 rewards cards hanging from my key chain, and I dutifully produce them at the appropriate times in order to save a few bucks or get a coupon I’ll never use.
But the myPanera card is my favorite. Why? Because it means free pastry.
Here’s how it works: every time you come into Panera Bread, you present your card before you order. Sometimes you get a free item, and sometimes you don’t.
It could be anything – a bagel, a pasty, or a drink. The thing is, you never know when the reward is coming, or what it will be.
Enter game theory
There’s a reason you can’t stop playing World of Warcraft or The Sims. Game theory is the science of keeping you playing. And the myPanera rewards program is a great example of game theory applied to marketing.
Consider how rewards are distributed in a hypothetical video game:
- The object of the game is to complete certain tasks and avoid or kill enemies.
- When you kill an enemy, sometimes you get a reward. (Sometimes not).
- The value of the rewards is not always the same. Usually you get a small reward. Occasionally you get a big reward.
- The reward you receive (or not) is determined by probabilities that are designed to keep you playing.
- If you never get rewarded, you will get bored and stop playing.
- If you get rewarded too often, you will get bored and stop playing.
- If you get small rewards periodically, with occasional big rewards, you will play forever.
This is exactly what the myPanera program does.
Not a loyalty card
Let’s compare the myPanera rewards program with your typical grocery store “loyalty” card.
Do you go to Giant because you have a card? I don’t. I use the card when I go to Giant. There’s a difference.
Frankly, grocery store loyalty cards annoy me. I am forced to use the card because there is a penalty (higher prices) when I don’t. As a result, I have a card for every grocery store I might go to.
That’s hardly a way to build loyalty.
Yum
Panera Bread has hit all the right notes with this program, which uses game theory to reward visitors for coming back.
I never know what I’m going to get when the cashier swipes my card, but I know it’s going to be tasty.
That’s a win for everyone.
July 20, 2011 at 5:05 pm |
Hmm… for us, the logic is the exact opposite!
What you’re describing is good old Skinnerian variable reinforcement– and it might sucker some folks in. But, I’ll bet most don’t think “Hey, I might get something free today (remote chance), so I’ll go to Panera for lunch.”
No thanks! Much rather be assured of cheaper prices as a result of going where we would otherwise. Our grocer even a gas rewards program. We just filled up a big car and paid only $1.80 a gallon!
Now, that’s a program worth having!
Of course, the downside of all these things is that this giving up privacy so that they can track your every purchase–and tailor their ads and coupons.
July 20, 2011 at 5:10 pm |
I am a total sucker. But it’s cool, because I OWN it!
March 17, 2012 at 5:46 pm |
[...] Got a Panera card recently – it’s designed to give you random freebies (not really random since they give you freebies they think you will like, based on your purchases – a little creepy, I know). An analysis of why the Panera card works as a means to raise customer loyalty. [...]
May 30, 2012 at 10:13 am |
It is not a win in this instance — I go to Panera very often, always present my card, and rarely get a reward. I am beginning to resent, seriously, that Panera cheerfully asks for my card and tracks what I buy, but gives me nothing in return. It’s enough to make me go to a competitor when I want coffee, for instance, because the competitor’s card system is more straightforward. In my opinion, the surprise element is *not* working for me.
May 30, 2012 at 11:36 am |
I think you may be onto something, John. I used to get WAY more rewards when this program first started, which was around when I wrote this post. I don’t go to Panera as much as I used to (the one near me closed) but it seems like I rarely get a reward anymore. It’s a shame, but it seems like this program fell off Panera’s radar.