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What most companies are doing (and why it's wrong)

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Most restaurant chains today run basic, transactional loyalty programs — simple points-for-spend models or stamp cards ("Buy 9, Get 1 Free").

These systems feel boring, predictable, and uninspiring for modern consumers, especially Millennials and Gen Z who dominate food spending now.

The problem?

These programs reward purchases but do not engage customers emotionally.

They fail to build actual behavioral loyalty — the kind that drives repeat visits, higher basket sizes, and word-of-mouth referrals.

As a result, loyalty programs often show low activation rates (15–25%), poor engagement, and minimal LTV growth.

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What it means for their business (worst-case scenario)

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In the worst-case:

• Loyalty members become inactive — dropping out after redeeming one free drink
• Marketing ROI drops — because paid acquisition doesn't convert into long-term customers