Earlier this summer Chipotle announced the introduction of a loyalty program which would run from July through September 2016. The program’s aim was to win back loyal customers by incentivising them (us) with free food. The program offered a 33% rate of return and was extremely generous, but it appears to have not been the massive success that Chiptole was hoping for.
The program seemed doomed from its launch on July 1, 2016 when sales associates at participating restaurants were unable to pronounce the programs hilariously silly name: Chiptopia. Also, it appears Chiptole was only able to convince just over 3 million customers to sign up for the program in the three months the program was available. Interestingly, some 85,000 customers did eat 33 (or more) entrees in the three month period and Chipotle will be giving out over $240 Million of catered parties.
The Launch
Chiptopia began on July 1st, 2016 which coincidently was the last day I heard a single sales associate mention the program. I was impressed on the first day when a greeter at my local Chipotle handed me a Chiptopia card and informational pamphlet explaining the program. Singing up online was relatively painless and I was soon on my way to achieving status with Chipotle. The free chips & guacamole were a great incentive to get users to activate their cards, but I wonder how many members signed up more than once (using multiple email addresses) to snag a few extra freebies.
Execution
The whole Chiptopia program was flawed since the beginning. It seemed overly complicated with the different levels of “status.” If Chipotle had simply explained the thresholds of 4, 8, and 11 entrees it would have been a more approachable program. Also, beyond the first few days of the programs, I never heard a sales associate try to “upsell” customers to signup for the program if they were not using the Chiptopia card. The cards were clearly displayed at the register and on a poster behind, but never did I hear a cashier explain the program and how it could prove beneficial to frequent customers. Maybe it was because they did not fully understand it themselves?
Chipotpia also had a serious hardware flaw. If you forgot to hand the sale associate your Chiptopia card before they accepted payment in their system, you could not count that meal toward your monthly totals. This happened to me very early on and I understood why a cashier maybe had not been trained to go back and correct the issue, but when it happened in the final week of the program I was shocked Chipotle had not implemented a work-around giving credit to customers.
Another issue I had was the extremely limiting one swipe per day policy. I am not proud of it, but there are times when I purchase Chipotle twice in a single day. I could not believe Chiptole would not offer credit for the second meal regardless of how much time passed between the two. I understand stopping users from swiping their cards 10 times during the lunch rush, but not allowing customers to swipe twice a day for single entrees seemed extremely limiting.
Marketing
One of the best things that Chiptopia did for Chipotle was the collection of email addresses. The program required customers to submit a vaild email address to activate the card. This means according to Chiptole’s press release, the restaurant chain collected approximately 3.5 million email addresses of loyal customers! That could prove to be a huge value for future targeted promotions. Unfortunately, Chiptole missed the mark with their current promotion and only started sending emails reminding customers about the program in the final weeks. I hate weekly emails, but I cannot believe Chipotle was not sending more emails throughout the three months reminding customers they were only x entrees away from a free meal.
Also, according to the most recent press release from Chipotle, the restaurant has only been able to claw back 40% of pre-E. Coli sales. It seems however the program did help win back the loyalty of extreme Chipotle enthusiasts.
Bottom Line
Free food has always been a staple of Chipotle’s marketing strategy, Halloween “Booritos”, campus events, mailers, and now Chiptopia show the restaurant is willing to let people try their food for free in an attempt to win customers. Overall, I think Chiptopia missed the mark. Sure it brought back Chipotle’s most loyal customer base, but it failed to capture customers who still refuse to “risk” eating Chipotle food. Also, in terms of a marketing campaign, the program was poorly executed. I appreciate what Chiptole was trying to accomplish, but I hope Chiptole was able to learn from Chiptoia’s shortcomings and implement a strategy that works, one that hopefully features a name its employees can pronounce.
