On August 1st, Pizza Hut launched its new loyalty program, Hut Rewards. While the pizza chain is late to the game in terms of launching a loyalty program, its structure is fairly unique among its competitors.
A spend-based rewards program gives customers 2 points for every $1 spent online or via mobile orders. 200 points earn customers a free medium pizza with unlimited toppings and 250 Hut Rewards points earns them a large with unlimited toppings. Though it’s more than a decent payback for customers, the deal is even sweeter in the early days of the program’s launch. From August 10 to October 1, Hut Reward members can get double the normal rewards points: for every $1 spent, they will get 4 points. It means that customers can get a free medium pizza after spending only $50.
This fact that Pizza Hut launched its new loyalty program has to be viewed from the competitors’ perspective as well. Papa Johns and Dominos loyalty structures are much more limiting and don’t offer the same level of rewards. And Pizza Hut has made a strong strategic decision, launching a double point event early on will boost initial registration and enthusiasm for the new program.
As denoted by Jeff Fox, chief brand and concept officer for Pizza Hut, it is indeed the fastest, easiest way to get free pizza. But what’s interesting about this program is points can be earned and redeemed through online or mobile orders only. In an era where every discussion about customer satisfaction and operational efficiency begins and ends with omni-channel, it’s strange that Pizza Hut has limited its loyalty program to a digital focus. The Pizza giant could have added a bit more flexibility by letting customers earn and redeem points from in-store and phone orders as well.
However, if we look at the recent developments, Pizza Hut seems to be very focused on its digital strategy, it launched Delivery Tracker giving customers a way to track their orders from the moment the order is received to the pizza being made, and through to delivery. Moreover, it also updates customers with timely text messages. Additionally, it has made ordering very easy by including Amazon Alexa voice service, Facebook, and Twitter chatbots, one-button reorder function, Visa Checkout fast-pay, and much more. It’s clear that they want to stick to their digital first marketing strategy.
Pizza Hut’s rivals Papa Johns and Domino’s also have loyalty programs. But unlike Hut Rewards, none of them allow points to accrue without daily limits. Also, none of them reward for every dollar spent. Domino’s gives away points for each order rather than basing it on dollars spent. For each order of $10 or more, you will get 10 points and customers have to spend $60 for a free pizza. At Papa John’s, customers get 1 point for every $5 spent, and 10 points (or $50 spent) can be redeemed for a free dessert. It means customers will have to acquire 15 points ($75 spent) to get a free medium two-topping pizza. But to get the same pizza, Hut Rewards members will have to spend $50.
While it may have taken Pizza Hut a while to catch up with its competitors, it seems to have taken some lessons from their loyalty strategies. Domino’s management itself has said that their loyalty program is playing an important role in boosting sales and given that Pizza Hut launched its new loyalty program with more competitive rewards structure, they can most likely expect the same.