Chipotle launches loyalty program to get more customers -- and data

June 27--Chipotle is launching a loyalty program that rewards repeat customers, in an effort to get more diners back in the door after food safety scares dramatically drove down sales.

The program, dubbed Chiptopia, starts Friday and lasts only through the summer. It rewards customers based on the number of times they visit Chipotle. There are three levels of rewards: Mild, Medium and Hot. For four visits within a given month, customers will earn "Mild" status and a free burrito, bowl, salad or tacos. Eight will get Medium status and 11 will unlock the highest status, with each level triggering another free entree. The free meal also counts toward the number of entrees required for the next status level.

The visit count restarts every month, and diners who reach reward status each summer month will get a final bonus. Customers who make four visits each month get an extra free entree at summer's end. Achieving Medium status all three months gets a customer $20 in Chipotle merchandise. Customers with Hot status all three months will earn catering for 20 people.

Denver-based Chipotle has mulled a loyalty program before as a way to win more customers. But the summerlong program does a lot more than that. Creating a loyalty program allows a restaurant chain to track purchases and identify its most valuable customers, said Kate Hogenson, a loyalty analyst at Kobie Marketing. That's something Chipotle isn't, in large part, now able to do.

"What you want to do is reach out to your best customers and make sure they're taken care of," she said.

Chipotle executives have said in the past that a loyalty program wouldn't be worth the cost. But a program that can act as both a summer promotion and a more widespread way to collect data may have been too valuable to pass up.

"This is very obviously set up to be a test-and-learn strategy," Hogenson said. "They're putting things in place so they get their feet wet without drowning."

Chipotle reported its first quarterly loss in April, as it saw the continued impact from outbreaks of E. coli, norovirus and salmonella late last year that drove sales down by a third. It led the company to begin the biggest marketing campaign in its history. It has already given away millions of free meals and dramatically increased advertising in the hopes of bringing customers back. The loyalty program should allow Chipotle to better target promotions in the future, Hogenson said.

sbomkamp@tribpub.com

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