How Pancheros loyalty-first marketing plan lifted sales

Week over week, the Iowa-based chain saw a 105% increase in check-ins, a 135% increase of new sign-ups and a 125% increase in daily loyalty sales.

Utilizing its loyalty program, Pancheros identified the individual — college student Aaron Vallejo — who ate the most queso over the course of a year, and crowned him King of Queso.

Pancheros Mexican Grill, a fast casual concept based in Iowa, was on a mission to improve its loyalty program. Understanding the effect such programs have on sales, the 28-year-old chain had rolled one out several years ago, but by 2018 participation remained flat, indicating that guests weren’t engaging with current campaigns, something Chief Marketing Officer Ryan Murrin set out to change.

Mobilizing the brand’s cult-like following was the first step, so after developing a new strategy alongside its loyalty partner, Punchh, Murrin’s team created a series of promotional campaigns designed to drive higher average checks, additional loyalty visits and new customer acquisition. The first campaign rolled out on Cinco de Mayo, offering customers five times the points, promoted only through the app using push notifications and email, as well as on Pancheros’ social channels.

“We saw tremendous demand on May 5th last year, and wanted to create a simple campaign that put Pancheros top of mind for our loyalty fans again this year.” Murrin said in an interview. “What was amazing about the campaign was, week over week, we saw a 105% increase in check-ins, a 135% increase of new sign-ups, and a 125% increase in daily loyalty sales. That campaign performed so well, not because it was an amazing offer, but because we’ve built equity and excitement into the program for our guests over time.”

Milestone celebrations
Another driver for Pancheros was its annual birthday celebration. In August of 2020, the brand celebrated its 28th anniversary with $2.80 burritos. Utilizing its Punchh platform, Pancheros pushed the campaign out as a mass offer that resembled a coupon, redeemable only through the guest app.

“Campaigns that engage the guest and provide a dependable cadence really help our customers find value in the program,” Murrin said. “There was a fun, celebratory feel to this campaign that our guests gravitated to, showcasing how valuable a loyalty program can truly be.”

Experiential campaigns
Pancheros also utilized its loyalty solution to evaluate the popularity of specific line items and found that its customers ordered queso — a lot — so Pancheros went all-in on National Queso Day by offering free queso to all app users.

While the results proved successful in terms of targeting new users and loyalists (redemptions increased by 202%), the real win was the experiential event that they activated alongside the promotion. Utilizing its loyalty program, the brand identified the individual who ate the most queso over the course of a year and crowned him “King of Queso,” ultimately rewarding him with a year’s worth of free queso. Murrin said that the publicity has been priceless and continues to evolve.

“Our loyalty program has been an integral part of being able to run multi-faceted campaigns such as these, from providing point rewards to the coupon module to identifying our super fans,” he said. “Being able to integrate all of these currencies into one system truly allows us to provide flexible programs that please and attract customers.”

Extended promotional periods
Along with limited-time offers, Pancheros has experimented with extended period offerings, including its popular “12 Days of Pancheros.” It encourages users to download the app to win 12 days of prizes, such as free queso, no delivery fees and additional points. The campaign quickly became a fan favorite for loyalty users, and redemption rates rose 51% during the period.

Murrin said the key to the success of longer campaigns was to design a lifecycle marketing program that provided transactional cues that initiate action from the customer. For instance, after sign-up, if a transaction doesn’t occur, a richer offer is sent, with further offer escalations as customers are guided along the loyalty journey.

“We’re looking forward to continuing to expand on our digital strategies and will be adding a stored payment solution and mobile wallet at some point,” Murrin said. “All part of our focus to remain loyalty-centric and customer-focused.”