Are Loyalty Programs Worth the Investment?

Ben (00:01.744)

Welcome back to another episode of Content Amplified. Today I'm joined by Justin. Justin, welcome to the show. I'm excited to have you here. I'm excited for the subject today. This is something I'll be completely honest. I know very little about, but I know it's a huge area of marketing, a huge area of what we can do better. So I'm excited to dive into the subject, but quickly before we do that, Justin, let us get to know you, who you are, what you do, what you love about marketing and content.

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Justin A. McCoy (00:07.286)

Thanks for having me, Ben.

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Justin A. McCoy (00:29.558)

Yeah, no doubt. So Justin McCoy, Vice President Marketing of Cousin Subs. So Cousin Subs is a Midwest based sub sandwich concept. We consider ourselves a fast casual brand. We were founded by two cousins. That's where the name comes from. So Bill Specht and Jim Shepherd are both from Atlantic City. And back in the day in the 70s, Bill married his wife Sandy and Sandy was originally from Wisconsin. And they decided to move out to Wisconsin after they got married.

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And when they got out here, Bill was missing his favorite sub sandwich style of sub sandwich. So Bill grew up going to a famous sub shop in Atlantic city called White House subs, which is still there today. And as he got to Milwaukee, he just realized he there was no sub sandwich like that here. So he called up his cousin Jim and he basically said, hey, I think we got an opportunity to do something here. And in June of 1972, they opened the first cousin subs. So we've been around since 1972. Today we're in two states. We're in Wisconsin and Indiana.

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And our concept is basically an Italian bread with a crunch on the crust. All of our cold cuts are like have a rig. No Italian touches to them. We do all of our hot subs on a flat top grill. And then we'd be remiss if we didn't celebrate Wisconsin. We have things like deep fried cheese curds. We have Wisconsin mac and cheese and shakes. And we just launched cheese fries and things like that. So I've been fortunate to be a part of the brand for 18 and a half years, as I mentioned. I joined as a marketing specialist. So that was an entry level marketing.

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position 18 and a half years ago and then was just really blessed with the opportunity to continue to grow with Cousins. I was promoted three to four times in the first couple of years. I eventually got up to director and then was eventually named vice president of marketing about 11 years ago. So really love the brand. We are still family owned. We're solely owned by the spec family now. Bill's daughter, Christine, is our CEO. And one of the reasons I've really stuck around is I'm a small town kid from northern Wisconsin and

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I really just love the culture here. I love what we're about and what we do. And, you know, I've just had a lot of great opportunities here in a lot of bigger organizations. You might be the VP of PR. You might be the VP of digital here. I get to oversee all marketing functions and have really had an opportunity to put my, my touch on the brand with my teams. We've, I've been able to help lead a labor rebrand, you know, just freshening up the brand.

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Justin A. McCoy (02:50.614)

Bringing forward all that made the brand great, but putting more of a modern spin on it and just to have really had a great opportunity provided by the family to really flourish my career here.

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Ben (03:02.768)

That's amazing. And I can tell you where I'm recording right now, it's lunchtime and that makes me so hungry. Like my mouth is watering. I'm excited. I'm excited to have this conversation. It just sounds so good. I love it. so Justin, what we're going to talk about today, and we've, we've kind of discussed this a little bit is loyalty programs and how that kind of fits into marketing. You guys are right at the beginning of this kind of journey, launching loyalty programs.

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You're collecting data and doing all this stuff. How is the launch going? What are you trying to consider? How are you building on this kind of a new program and system?

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Justin A. McCoy (03:43.126)

Yeah, so it's been a journey. When I started with the organization, we had over six different POS systems. We had franchisees who weren't even collecting credit card payments. So it's been a journey as we've gone forward. When I talk about really rebuilding the foundation of the brand, it wasn't just in rebranding, it was also in our tech stack. And so we invested and we bought brand new POS systems for the entire system, because that was one of the first steps, right? Is you got to get that cleaned up.

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Then we ventured into online ordering. We partnered with a company called Olo. Olo is one of the preeminent, if not the preeminent online ordering platform out there. We were fortunate enough to join Olo when they were about 10 employees in downtown Manhattan and just getting going. So we've really grown with them, but they've been a big part of our growth and our tech stack. And so it was first the POS, that was the online ordering. And then really,

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Ben (04:24.816)

Hmm.

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Justin A. McCoy (04:35.958)

Any marketer who's gone out there and tried to like connect something without an integration already in place knows how much of a headache it is. And we tried to do that at first with loyalty. And then we realized that that was going to be just a nightmare. And then we identified that Punch, our current loyalty provider, had a very complex integration with Ola. And so we decided to move forward with partnering with Punch. And so we launched our loyalty program about three and a half years ago now.

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Ben (04:42.032)

Yep.

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Justin A. McCoy (05:03.702)

And today we're starting to push almost 400 ,000 people in the loyalty program. And you know, when we first, I think when you first start getting all this data, you're like, okay, what are we doing with this? You're just excited to have people on the platform. You're excited to get moving with it. And it really takes some time to try to start to understand what you're collecting and then how you react to that. So I would say in the beginning stages, you know, objective number one was just to get people to sign up. So it was just, let's get people in a loyalty program and go. And then.

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really a lot of our sending and what we were doing was just what, you know, mass sending to the list, right? So, hey, whether it's a new LTO that's coming out or it's a, we have bad weather, we're just going to send out to the entire list. And as, as we've gone through that and as we've collected this data and we've started to get more in tune with the tool, we have now over the last several months began to pour in and we're really starting to drive into like personalizing and also working to do sends off the behavior of the people in the...

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So what we're really looking to do now is to have smart segmenting options that hopefully will improve the ROI and the performance.

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Ben (06:08.944)

I love it. I love it. So there's so many things I want to unpack there. So many good things. So let's start number one. How did you really launch the program? How did you get people to sign up? Like, obviously they're giving you contact information. You have to reach out, provide value, some kind of a message. What's some advice as people are launching their own loyalty programs? How did you get people to just engage with it? And how do you continue to do that even today?

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Justin A. McCoy (06:37.494)

Yeah, I would say I go back to that very beginning. You know, you have to look at your tech stack and I think having existing integration. So looking at if you do have online ordering, you have POS like looking for a loyalty partner who already has integrations in place. So you don't have to mess with that. That would be number one. Number two, look for a loyalty partner who's been in the game for a while. Your loyalty partner can provide a lot of great guidance to you and how you structure your program based on their experience. You also want to you want a robust team in place to help build that program out to.

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You know, it takes several months to get it going. You got to figure out, are you going points, are you going dollars, are you doing rewards, are you doing gamification, is it going to be an app? Like, what are all these different variables that you're going to have in place? And then are you going to give away swag, is it just going to be product? And just literally trying to figure out all those different components. So I would say, in my experience, I would look for a mature loyalty partner and someone who has a client list or, you know,

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brands that they've worked with that you can actually reference and go to and talk to. From there, I would tell you to look at other loyalty programs and look at what you like. You know, what I would say, download apps, download, download loyalty programs and start using them to just see like, you know, how are others doing it? And what do you like about what they're doing and what don't you like? And what would you like to incorporate into your own to make it your own? So those were all things that we did as we led into it. But then once we got to that point and once we launched,

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We did a soft launch first, so I would also recommend that. You don't know what's going to happen when you first put it out there. Are people going to have problems signing up? How is your store operations going to react? So we just did the soft launch with no media to begin with. We essentially just turned on the loyalty program. We had our front of house cashiers talk about the program, started getting people signed up in it. We did that for about a couple of months, made sure we had no other bugs. And then from there, it was full on media blitz. So we were...

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TV, radio, digital outdoor, ads on meta, Google all over, promoting in store, promoting on digital menu boards, began taking every single mailer we would ever send out. I mean, basically anything we did from there on out, it was join Cousins Club. So it was really just trying to push people to get into the program. I would tell you too, like in Wisconsin, you know, we're predominantly in Wisconsin and this is no knock in Wisconsin, but we also are our core base. We're.

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Ben (08:45.52)

Hmm.

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Justin A. McCoy (08:58.262)

We started in the seventies and one of the things I've been trying to do is build a new generation of cousin subs fans, but we had a very large boomer base. And so it was also, how do we make a loyalty program for people who don't want to live on their phone? When we launched three years ago, I mean, three years ago till today, there's even more adoption from a boomer crowd into a mobile device. But like, you know, we had to think about all those different things too. you know, so just making sign up ease of use.

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Ben (09:15.184)

Yeah.

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Justin A. McCoy (09:23.222)

And then really just promoting it and talking about the value and trying to make sure that the loyalty tiers that we had in place would provide value. And then also that we were sending out offers that would provide value to our guests.

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Ben (09:33.488)

I love it. I love it. Okay. So you've gone from, okay, we found the right vendors, the right integrations. We've launched soft launch and then the hard launch and we've got people. Now you're getting data, right? You've got people and information coming at you. The flood gates have been opened. You talked a little bit about how you started to segment. What did that process look like? You said you started to tailor the message.

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How did you start to segment your audience? How did you think about it? How are you continuing to figure out how to provide more value with a more specific tailored kind of message or content for the specific audience?

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Justin A. McCoy (10:13.718)

Yeah, I think, you know, it started, we started to talk about, all right, you know, we have this program, we're doing mass sends, we're doing these different things, but now we run KPI reports in our business every day, right? We're looking at day part mix. We're looking at product mix. We're looking at all those different things. And when I'm advertising, I'm keeping those things in mind. But when we were sending through loyalty, we weren't necessarily diving into the data to look at like, okay,

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Is this guest only coming in Monday through Friday? And do we have an opportunity to send them an offer for the weekend or in the evening? Are they only coming in during daytime? Also, can we see from the data we're collecting just from sales and transactions that we have a certain day of the week that is our slowest day of the week? And how do we impact that? So we started just in our own KPI reports, thinking about things like that. So one of the first things we did was last year we launched a double points Tuesdays.

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Tuesdays was one of our slower days. So every Tuesday, if you were a loyalty member, we were doing double points Tuesdays. Tuesdays ended up, it had a major impact. We saw like a lot of people coming in for that. People were looking forward to that. Tuesdays also became one of our highest sales generators from the loyalty, because we can look specifically at loyalty sales. And so it had a huge impact. As we moved into 2024, we then switched that to Wednesdays because we were seeing that with Wednesdays.

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Ben (11:18.096)

Heheheheh

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Justin A. McCoy (11:37.142)

So we've done that and we've actually seen that Tuesdays haven't trailed off as much as we would have thought, but Wednesdays have grown. So that was like one of the first things we did. We also, when we launched LTOs, we wanted to create more buzz about them. So for loyalty members, we would launch the LTO a week early and then we would incentivize them to try it and try to get them out to try it. So those were like some of the things we did at first. Then as I began to think about it,

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we really wanted to dig in and find out like what does Punch have available for us, our loyalty provider? Do they have anything? They have different modules you can add on to your loyalty program. And I knew that they had an AI feature. And I know that as part of that AI feature, it is starting to mine some of that data to give you more insights. But I wanted to really get an understanding of what Punch already had available without us having to like, you know, pay for that module. So as we looked at it,

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Ben (12:10.)

Mm -hmm.

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Ben (12:25.36)

Yeah.

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Justin A. McCoy (12:28.662)

Punch actually had a lot of different smart segmentation options for us that we hadn't really been looking at previously. And what we were able to do is we've now been able to break up the members of our loyalty program into three different buckets called engaged members, new members, and at -risk members. And then within that, we have subsegments. So in our engaged members, we have superfans. And then we have high -value superfans, standard superfans. Then we have fan, high -value standard. And then we have infrequent.

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And then when new members, we have new fans, new member, and then at risk members, we have lapsing or hibernating. So as you can tell, when you just hear those words, you can begin to think about, okay, now we can start to look at these different segments and how are we going to send things to them? Like instead of mass sending, now what we're looking to do is we send something different to a super fan versus a fan. And we send something different to a lapsing member versus a hibernating member. So that's just one of the segmentations that was available to us through them.

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The second set of segmentations that was available is called recency, frequency, and monetary segments. And so within those, we're then able to look through and they have basically it's a scoring system of score one, score two, score three. So like in the recency, a score three is someone that's been in within the last seven days. A score two is someone who's been the last seven to 30 days. And then a score one is someone who hasn't been in 30 days. So without going through every scenario for you, this is kind of where we're headed now with the segmentation for the loyalty.

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Ben (13:30.896)

Cool.

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Ben (13:55.664)

I love that. And like immediately now that you have this information, like the wheels are turning and it's like, okay, should we send Google review offers? We know we can do it for the high value customers that have been recently, you know, there's all these different things that kind of, kind of mix and match now that you have that data. So that's really cool. But what I also really love is that you weren't, you weren't where you are today when you first launched, like you talked about.

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soft launch and sending just mass mailers, mass messaging to everyone. I love the progression. And I think that that's something for loyalty programs. If you're launching or any marketing campaign, that is something you can follow. Don't be afraid. You talk about, that's a ton of segments, especially if you can combine those segments, that's a ton.

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You didn't get there from day one, you took the steps to get there and that was okay. Like, and you progressed it and it sounds like there's next step. So again, my question now that you have the segments, what are some of the opportunities in front of you that you're looking to take advantage of from that?

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Justin A. McCoy (15:01.974)

Yeah, I mean, even stepping back one moment, like I realized that I failed to mention like when we first launched to and when I talked about who you who you choose to run your loyalty program with can provide you lots of insights. We actually got advice in the beginning, like, let's only go this far. Right. Like, you know, you have your sign up, your birthday, your anniversary. You do a couple recall campaigns. But like for the first six to nine months, you do really just want to get people in the program and turning data. So I don't.

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Ben (15:19.6)

Hmm.

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Ben (15:29.616)

Yeah.

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Justin A. McCoy (15:30.966)

I don't know that you can jump into a loyalty program and get right here right away. You know what I mean? Like you have to. And so, so we got that advice early on and we did that. And then the second phase, and I actually, like I said, I forgot to touch on this is we, we really got, more granular with our recall campaign. So we had a 30, 60, 90 day lapse where we had automated emails. we had different things of like, there's certain data. If someone makes a purchase within seven days of signing up the,

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Ben (15:34.512)

Yeah, yeah.

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Justin A. McCoy (16:00.726)

how much more frequently they'll be involved in your program. So we did do some things early on. So that was probably the second phase. Now we're moving into that third phase. The other key component of that too in execution is that your team has to get used to the platform you're using, right? They have to learn how to schedule. They have to learn how to send. They have to learn how to manage all that because now that we're getting into this, as opposed to hitting the button once to send it to everybody, we have to have all these different things, you know, offers for the super fan, for the fan.

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Ben (16:13.456)

Yeah.

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Justin A. McCoy (16:29.878)

infrequent, we're doing different offers for each category. How do we report on them for each category and how do we measure the ROI? So, you know, that's all really important. And you asked like, where are we headed? So we just started, you know, enacting upon this. What we're doing right now is we're really testing. You know, so for example, we're viewing superfans as we don't need to give as big of a discount. We're in fact even testing, not even sending superfans a discount because what we're trying to see is do we even really need to?

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Ben (16:37.232)

Yeah.

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Justin A. McCoy (16:59.958)

Are our super fans, do they need to be motivated by an offer and do we have to discount the product at all? So we're doing A -B testing in that category. Then when we're looking at the fans, we're looking at that next tier. What does that offer have to be? Is it a points offer? Is it a dollar off? Is it a percentage? So we're looking at all those different things. So that's this next step that we're getting into. Where we'll go from here is then I want to start to play around with the actual creative, the visual that we're sending out too. So...

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Are we sending out a picture of product? Are we sending out, you know, is it a graphic? How are we presenting the product product? Does that impact? Because I know when I do my digital advertising on Meta and Google, that does have an impact on how people, you know, convert. So that's how granular it's going to start getting now. And we're just really starting to dive into.

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Ben (17:44.272)

Yeah.

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Ben (17:51.344)

I love it. I love it. Well, as promised, these podcasts go by super quick. We like to keep them on point short so people can consume them on the go. This is so good. Like how to actually look, find a vendor, where you start, where you go. And I love that you're in the middle of it. Like this is the potential moving forward. And this is so helpful. Justin, thank you for sharing all of this advice.

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All of this information has been really, really powerful, really informative. If anyone wants to reach out and connect and further the conversation online with you, how can they find you?

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Justin A. McCoy (18:28.15)

Absolutely. They can find me on LinkedIn, Justin McCoy on LinkedIn. And then also I'm on Twitter at jambam0506. A lot of people ask what that means. It's my full initials, my son's full initials in his birthday. So that's how they can find me on Twitter. But I would be more than happy to talk with anyone. And as you said, this is a learning process. I don't claim to be an expert. We're learning as we go. And I think it's going to continue to evolve. And I think each program will be different. And that's why all you can do is hear how others are approaching it.

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Ben (18:41.744)

Very cool.

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Justin A. McCoy (18:55.158)

And then you really have to dive into your own data and how your guests are reacting with what you're doing.

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Ben (18:59.728)

I love it. Plus I will say anyone who is actually an expert will also claim humility saying, we're not the expert. So it really just adds validity to the fact that you're an expert. So love it. Thanks again, Justin. Appreciate it and have a great rest of your day.

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Justin A. McCoy (19:10.326)

Well, thank you.

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Justin A. McCoy (19:14.87)

Thanks Ben, you too.

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