As the holiday season approaches, quick-service restaurant (QSR) brands in the UK are ramping up their promotional strategies in an effort to entice customers. Reward-based promotions, a proven tool for fostering loyalty and increasing repeat visits, take center stage. Maria Vanifatova, CEO of Meaningful Vision, explains: “Reward-based promotions during Christmas capture the spirit of giving while strategically fostering long-term loyalty, setting the stage for sustained customer engagement into the new year.”
The Evolution of Reward-Based Promotions in the UK
Reward-based promotions have grown in importance over time, becoming a cornerstone of QSR marketing strategies. This rise in popularity is a result of the proven capacity of rewards to incentivise repeat visits by customers, while offering them an increased sense of exclusivity and value for money.
Promotions featuring rewards have diversified into several key formats:
App-Based Rewards and Loyalty Rewards
The rise of mobile apps has revolutionised reward-based promotions, with brands offering exclusive app rewards such as welcome discounts, additional points based on the loyalty scheme, and gamified experiences. Loyalty points can be redeemed for menu items, discounts, or exclusive offers, with higher tiers offering greater rewards.
Free Items with Purchase
A classic and highly effective promotional strategy, this method accounts for 20% of all promotions among the UK’s top 100 QSR chains, experiencing an 8% growth in the past nine months. Popular examples include buy-one-get-one-free deals and free items available for customers who reach a spend threshold. During the Christmas season, freebies like coffee, cookies, and mince pies are common offerings.
Over the past two years, Meaningful Vision reports a consistent 10% increase in free product promotions during the festive season compared to other months.
Why Rewards Shine During Christmas
The holiday season amplifies the effectiveness of reward-based promotions. Unlike one-off discounts, rewards align with the festive spirit by creating a sense of being “gifted” by the brand. This approach fosters emotional connections and enhances brand loyalty. Seasonal promotions often incorporate holiday themes and gamified elements, boosting engagement and excitement.
In recent holiday seasons, promotional campaigns by QSR chains have leveraged digital platforms and gamification to drive engagement. Campaigns like The McDonald’s Gift Drop, Burger King’s “Christmas Cash Competition” run with Coca Cola, and Subway’s “12 Treats of Christmas” from 2022 serve as prime examples of reward-based festive promotions.
A recent National survey by Meaningful Vision involving 2,000 respondents revealed that 85% plan to dine out during the festive season. Interestingly, the survey found a near-equal split in perceptions of special offers: 14% of respondents agreed there are great offers, while 13% disagreed. For those who perceive strong offers, 21% are willing to increase their dining-out budget, and only 7% aim to spend less. Conversely, among those who don’t see attractive offers, 12% plan to spend less, 12% more, and 14% aim to maintain their spending levels.
However, the QSR sector faces unique challenges during the holidays as consumers are less likely to visit offices, and are more likely to gather at home for Christmas, prepare festive meals, or dine in restaurants. Successfully addressing these challenges requires innovative and differentiated reward strategies.
To maximise the impact of these promotions, Maria Vanifatova advises: “It is important to run promotions during the Christmas season to stimulate demand with existing clients and attract new ones. As there are a lot of promotions running by competitors at the same time it is important to be aware about what they are doing. Creative digital promotions could be a game changer”.
