Starbuck Rewards is often touted as the gold standard of loyalty programs. Since 2009, Starbucks Rewards has been a whopping success with 22.9 million members and counting.
But there’s a new champion in town: 21 million fans have signed up for the Chipotle Rewards program — since March of 2019.
So how did Chipotle manage to build such a successful loyalty program in such a short amount of time?
Turns out people are pretty serious about burritos too. And it’s a perfect comeback story, after a failed first attempt.
Here’s what they did.
Who Is Chipotle?
Chipotle’s original location, Denver, Colorado, via Google
It opened its first location in Denver, Colorado in 1993. It has since expanded to 2768 locations in the U.S., 24 in Canada, and a handful in the UK, France, and Germany.
Chiptopia Postmortem: 4 Takeaways From Chipotle’s Failed Loyalty Program
Before unveiling Chiptopia, Chipotle had been exploring the financial sense of a rewards program versus building customer loyalty in more organic ways — like Ben & Jerry’s with their values-based approach.
However, after a string of food safety incidents, they needed a revenue boost and a way to entice uneasy customers back into their restaurants. So they introduced Chiptopia.
It didn’t go well.
And though it’s ancient history, lessons learned are worth revisiting.
1. Loyalty Programs Should Be Permanent — or at Least Long-Term
Even though Chipotle clearly positioned Chiptopia as a temporary campaign — not a loyalty program — didn’t mean their customers recognized a distinction.
In other words, Chiptopia probably gave some loyal customers the impression they were appreciated only sometimes, or in this case, just during that summer of 2016.
And loyal customers are the last people you want to alienate.
Not to mention, giving away free stuff, only to stop doing so later? Well…
2. Customer Loyalty Programs Should Be Straightforward
Chiptopia’s program rules were complicated. Just look at it. That’s a lot to decipher.
Not only that, but it looks like it changes every month — when it’s the same from July to September. The graphic design is actually making it harder to understand the program!
And let’s be honest, it’s hard to think when you’re hungry.
3. Rewards Shouldn’t Be Discriminatory
Chiptopia was structured in a way that primarily benefited the frequent, solo diner.
So it was great for a broke college student, but it certainly didn’t reward a family of four who spent much more per visit.
Awarding points for dollars spent makes rewards accessible to all your customers.
4. Rewards Programs Shouldn’t Slow Your Employees Down
Employees also suffer the consequences of a poorly structured program. And tying rewards to the number of visits compelled customers to “game the system.”
What happened in stores was that a family of four would make four orders instead to maximize their rewards individually. So of course, it slowed the burrito assembly line and payment process, as each individual claimed their stamp and paid separately.
Chipotle Rewards Program Takes Off: 4 Big Things it Gets Right
Luckily, Chipotle learned from its mistakes and shows other brands how it’s done with Chipotle Rewards.
Here’s what they got right with their second attempt.
1. Support Customers’ Changing Needs with All-In Digital Strategy
While some rewards programs offer limited functionality with their app, Chipotle embraced an all-in digital strategy for Chipotle Rewards.
Their approach aligned with consumers’ changing demands, but also prepared them for the challenges all restaurants would face during the pandemic.
As a result, their Q4 2020 digital sales skyrocketed 177.2% over the previous year’s, representing 49% of overall sales.
Creating a digital app that covered all the bases and replicated the in-store experience as much as possible helped achieve those fantastic numbers.
Here’s what they incorporated.
- Nuanced ordering options you’d have in person — like light on the sour cream and heavy on the chili-corn salsa
- Multiple payment options: Apple Pay, credit card, gift card
- Pickup options including skip-the-line pickup shelves and drive-thru “Chipotlanes.”
- Delivery through Uber Eats, Grubhub, and DoorDash
- Preferences tracking: restaurant location, favorite order, ADA accessible shelf for pickup, etc.
- Group ordering capability
- Round up for goodwill: App is also a donation platform allowing you to round up your bill to the next dollar to benefit various charities
2. Eliminate Barriers That Prevent Fans From Eating More Chipotle
They considered all the scenarios that might prevent customers from getting Chipotle when they built their rewards app.
It’s got you covered.
- Don’t want to drive to a Chipotle? You can arrange delivery through Uber Eats.
- You’ll drive, but you don’t want to get out of the car? You can pick up your order curbside, or a “Chipotlane.”
- Don’t feel like getting off the couch to find your phone to place an order? Fine. Just ask Alexa to place your regular order and have it delivered.
- Confused by the app or the ordering process? Not to worry — ask their little bot, Pepper, for assistance.
Really, there’s no excuse for not ordering from Chipotle.
3. Provide Exclusive Digital-Only Offers — One More Way To Get Rewards Members to Eat More Chipotle
Chipotle introduced a new hand-crafted quesadilla in March 2021, with a twist: it’s only available as a digital order. If you want the quesadilla, you need to download the app.
Being part of a club has its advantages.
And as a Chipotle Rewards member, you’ll get exclusive limited-time offers based on your ordering preferences.
Plus you’ll have access to menu items that aren’t available to patrons who order in-store, like the much-anticipated quesadillas.
4. Provide Extra Perks for Fans to Keep ‘Em Loyal and Connected
Chipotle leverages its app beyond ordering and reward tracking. They use it to connect and engage creatively with their fans too.
They recently incorporated gamification for their super fans. Chipotle IQ tests their knowledge about all things Chipotle. This year’s event awarded 50,000 BOGOs and 100 $500 Chipotle gift cards.
Customer Loyalty Isn’t Only About Free Burritos — Company Values Matter Too
Sustainability at Chipotle, from their website
You don’t build strong loyalty through rewards programs alone. Corporate and social responsibility is extremely important too.
In fact, 71% of consumers, and 83% of Millennials, want to buy from brands that align with their personal values.
Here are a few sustainability measures Chipotle takes that also reflect their fans’ values and build brand loyalty.
- Use only responsibly raised meat and dairy with no added hormones
- Give back to the community — 250,000 free burritos for health care workers is one recent example
- Divert 50% of waste from landfills with their in-store recycling efforts
- Recycle plastic foodservice gloves into bags
- Upcycle avocado pits for natural clothing
How a New & Improved Chipotle Loyalty Program Impacted Their Bottom Line
Though other factors came into play, Chipotle proves that a successful loyalty program is good for the bottom line. In fact, CEO Brian Niccol mentioned the number of members during Chipotle’s earning calls as a sign of confidence.
Here’s a couple of year-over-year highlights from 2020, Chipotle Rewards’ first full year of operation:
- Total revenue increased 7.1%
- Digital sales grew 174%, accounting for 46.2% of sales
- Chipotle’s stock price achieved new highs — and remains high
- 161 new stores were added with 200 more planned for 2021
Chipotle Rewards Program FAQs
How Does the Chipotle Rewards Program Work?
Here’s what you need to know about the program.
- 10 points for every dollar spent
- Free entrée per 1,250 points
- Free entree on your birthday
- Extra point days
- Ad-hoc promotions like Guac Mode
- Bonus points for things like trying a new menu item
If you aren’t one of the nearly 22 million people who have downloaded Chipotle’s digital app, you’re leaving these rewards on the table.
When Did the Chipotle Rewards Program Come Out?
Chipotle Rewards was unveiled on March 12, 2019. To celebrate the rollout, Chipotle partnered with Venmo to give away $250,000 — anywhere from $1-$500 per customer who signed up for the program.
How to Get Chipotle Bonus Chips and Guac Rewards
Chipotle gave free chips and guac as a “welcome reward” when customers signed up for the Chiptopia program. (That might’ve contributed towards everyone signing up for an individual account!)
More recently, Chipotle celebrated the first year anniversary of Chipotle Rewards by allowing members to sign up for Guac Mode for a year of guacamole-inspired perks. It was a special one-time promotion, almost like a loyalty program within a loyalty program!
Though the signup period has ended, Guac Mode was just one of many special bonuses offered throughout the year.
How to Add Chipotle Online Purchases to Rewards
If you want to get points for a past order, fill out the Points Request Form. But you will need to have a receipt, and the purchase must have been within the last 30 days.
This question is often searched for, so don’t worry, you’re not the only one!
What Rewards Do You Get From Chipotle?
You’ll get a free entree of your choice every 1250 points. You’ll also have access to special rewards throughout the year.
Does Chipotle Give Free Food on Your Birthday?
They do indeed! If you provide your birthday in the rewards app, you’ll get a free entrée on your birthday.
What Other Brands Can Learn From Chipotle’s Rewards Program
You know the old saying: If at first you don’t succeed, try, try again.
Luckily, Chipotle struck gold on its second attempt. Chipotle Rewards is a perfect example of the power and significance of a well-executed rewards program.
If you’re considering a digital loyalty program for your business, remember what makes Chipotle’s so effective.
Then be sure to offer your customers easy ways to purchase, without any hassles, in a way that mirrors an in-store experience. And don’t forget to incorporate fun and creative ways to engage them too.