I just read, in the financial pages of all paces, that Tim Horton’s will introduce a new customer loyalty program replacing the one it launched not too long ago. I assumed that the previous plan wasn’t working, but it seems the old plan was actually working too well…
Would you register for Tim Hortons new rewards program?
Or just stick with the old, simpler plan?
José Cil, current CEO of Tim’s parent company Restaurant Brands International (RBI), told Yahoo! Finance that the current program has been working too well, and had, “dragged comparable sales down three per cent. Comparable sales, a key metric that measures sales at locations opened for more than a year, were down 4.6 per cent in Canada, an all-time low for Tim Hortons.”
“We’ve attracted far more guests to our loyalty program, far more quickly than we had planned,” Cil told analysts.
What’s the problem?
While Cil spotlights a drop in sales as the reason the program is changing, industry watchers say the real problem is that the old program wasn’t producing the results Tim’s wanted with respect to getting people to register for the plan online and share their personal information. Tim’s made a big deal at the time the old plan was unveiled, offering special perks for folks who registered via their phones and the Tim’s website. That part didn’t work well at all. Only 1 in four of the 7.5 million active members of the old plan registered by phone.
Joshua Kobza, RBI’s Chief Corporate Officer, said the company’s future success will be, “increasingly dependent on digital capabilities. In the next phase of loyalty, the goal is really about driving two things. One is being able to open up the menu and give more options and the other thing is about moving more into a digital form of the program. That’s going to allow us to better understand how our guests interact with our brand and use our brand […] and provide more personalized benefits to those guests.”
The old loyalty program offered customers a free Coffee, Tea or Baked Good every seventh visit to Tim’s. Franchisees were simply giving away too much free food for the good of their bottom lines.
The new program will give customers 10 points for each visit to the store, which can be saved up to redeem for a variety of menu items. The following menu items, initially, will be available for points redemption under the new plan:
- 50 points: hash browns, classic doughnuts, specialty doughnuts, cookies
- 70 points: brewed coffee, tea, Dream doughnuts, bagels and baked goods
- 100 points: hot chocolate, French vanilla, iced coffee, wedges
- 140 points: Classic Iced Capp, frozen beverages, espresso drinks, box of 10 Timbits, yogurt, oatmeal
- 180 points: breakfast sandwiches, soups
- 220 points: BELT, farmers breakfast sandwiches, lunch sandwiches, chili
But beware the fine print
Keep in mind, there’s a minimum purchase amount to get your per-visit points, and you must register by phone to participate. There are other conditions, as well. Read the program rules carefully to avoid disappointment. Current old plan members who don’t register for the new plan will still be able to claim a free Hot Beverage or Baked Good item after 12 visits.
The old plan was certainly more customer-friendly than the new one. No fine print, no confusing conditions to meet. And the number of points you’ll need to amass before redeeming them on a really good free menu item is pretty high. It’ll still take you 7 visits to get a free Coffee. But even if you go to Tim’s every weekday on your way to work and always make a points-eligible purchase, it’ll take you a month to get a free Sandwich or Chili Bowl. I’m not sure that many folks will want to go to the bother of playing the new game.
Loyalty points expert Patrick Sojka, founder of RewardsCanada.ca , agrees: “I don’t think it’s going to lead to more business at all.” He notes that the points-per-visit system will not encourage additional spending, as customers will earn 10 points regardless of how much money they spend. “With loyalty programs, it’s not only about loyalty, but also trying to influence behaviour. And this isn’t going to influence behaviour because there’s no change on the earning (points) side.”
Maybe Tim’s should have consulted Sojka before they concocted their new rewards program. We’ll see how long this one lasts, ‘in the wild’…
~ Maggie J.