Denny’s is testing a mobile loyalty platform to identify and analyze guest dining habits and needs via targeted rewards and messaging while helping the chain to fine-tune future marketing efforts.

The full-service family restaurant chain is experimenting through Paytronix’s EXPRESS Pilots program, which leverages features that allow marketers to quickly test a variety of elements in a secure, market-focused pilot program. The program can also help speed go-to-market strategies and reduce costs for program testing. The app can be skinned with the brand’s graphics, but the functionality behind it is scalable across multiple merchants.

“As part of EXPRESS Pilots, Denny’s is able to test the efficacy of an app without investing a great deal of money customizing it for the brand,” said Michelle Tempesta, director of product marketing at Paytronix Systems.

“As large brands roll out nationally, they have a choice of continuing to use the off-the-shelf app or taking advantage of Paytronix’s API coupled with a third-party app developer to create a fully customized application for the brand.”

Denny’s declined to comment at this time as the program is in pilot.

Denny’s is one of America’s largest full-service family restaurant chains with more than 1,600 franchised and company-owned locations nationwide.

Serving up ROI

EXPRESS Pilots are based on the Paytronix Rewards Platform, which includes proprietary software that delivers billions of millisecond transactions annually.

Once the guest downloads the app, a screen appears that asks the user if they have a card or need a card. The guest can then add their physical member card information to the app or they can register on the spot for a virtual card.

To register, the guest simply completes a few form fields and touches “submit.” Denny’s offers a welcome reward to motivate a next visit quickly. Once registered via the app, the welcome offer is immediately added to the user’s account.

Customers can “check in” using the app once they arrive at the restaurant. The app returns a temporary three- or four-digit member number that the guest gives to the server. The server then enters the member number into the POS system – tying the exact visit and purchase behavior to that guest and opening up the opportunity to redeem any rewards available on the account.

The Paytronix software matches the transaction behavior to the rules for the reward and then enters the discount directly into the check if there’s a qualifying purchase.

In real time, the guest can check their earned points and reward balances within the app.

With the app, marketers also gain an additional, highly personal communication channel where they can deliver one-to-one messages based on the guest’s behavior.

Big implications

Beyond the transaction platform, the reward software has a built-in promotion engine that enables marketers to create unique campaigns based on purchase behavior and deliver offers with value stored on members’ accounts.

Digital messages – email, push, pull, SMS and geo-fenced messages – can be deployed from the same interface. Messages can be triggered in real-time based on purchase behavior, deployed according to a preset schedule, or deployed by the user to nurture guest relationships for long-term retention.

Mobile loyalty programs are not one-size-fits-all, and brands do well with different models depending on their segments.

In the QSR market, chains such as Pinkberry and Starbucks are succeeding combining stored value and reward programs. They’re also tying in mobile payments as a guest engagement tool.

The mobile personal use card allows guests to digitally reload to cover habitual transactions. This works the best for QSR restaurants where the guest’s mean spend hovers around $5 or below and average visits meet or exceed two times each week according to Paytronix. Howard Schultz, CEO of Starbucks, announced in January 2014 that 30% of their U.S. payments were of the mobile variety.

Wendy’s also recently rolled out this model in Q1 2014, and Panera too, who with its Surprise and Delight program reported a 50 percent usage rate from mobile loyalty.

“When restaurants launch an app that includes a loyalty program they deliver convenience to their guests on four fronts: 1) enrolling in the program, 2) identifying themselves at the restaurant to earn and redeem rewards, 3) monitoring their reward balance, 4) receiving valuable member information via push and pull messages,” Ms. Tempesta said.

“These app benefits help restaurants increase enrollment and participation rates – especially among millennials — required for program success.”

“Studies have shown that the mobile experience is an essential part of a guest’s path to purchase. eMarketer released a study that said, in the restaurant industry in particular, 64% of smartphone users make a restaurant-related purchase within one hour of searching for a restaurant on their device,” she said.

Final Take

Michelle is editorial assistant on Mobile Commerce Daily, New York