Visitor Characteristic: It isn’t damaged due to clients. It’s damaged due to the design
Merkle Says QSR Loyalty Is Altering. I Say It Isn’t Altering Practically Sufficient.
I saved circling again to the latest Merkle article on “redefining loyalty” in QSRs. It’s polished, optimistic, well-structured, and filled with the same old fashionable advertising and marketing vocabulary. It nods knowingly at QSR ache factors. It gestures towards the longer term. And but one query lingered in my thoughts: Is that this actually the revolution everybody retains promising?
As a result of if Merkle is precisely capturing how most QSRs at present take into consideration loyalty, then we’re coping with a really severe misalignment. The methods they champion orbit the identical gravitational middle QSR loyalty packages have been caught in for years: loyalty as rewards, engagement as a postscript, differentiation as an afterthought. Should you’ve been within the engagement trenches so long as I’ve, you realize you can’t repair structural weaknesses with a recent coat of transactional paint.
There’s a rigidity right here price exploring, as a result of the hole between what QSR loyalty wants and what QSR loyalty is being instructed to do continues to widen into what I as soon as known as The Loyalty Chasm and the business remains to be marching towards it.
Merkle’s Central Premise: Loyalty Is Shifting. The Downside Is That It Isn’t Shifting Sufficient.
Merkle argues that QSR manufacturers are leaning away from transactional loyalty and towards emotional loyalty. They communicate of connection, personalization, and “significant journeys.” On the floor, that sounds proper. It’s the correct vocabulary. However vocabulary isn’t transformation.
The examples they supply all depend on the identical underlying chassis that created at this time’s loyalty stagnation: higher personalization, tighter segmentation, smoother comfort, extra environment friendly reward flows. It’s basically a well-polished rework of the outdated structure, an evolution of strategies that not differentiate.
Personalization? Desk stakes. Prospects assume you are able to do it. AI made it low cost, predictive modeling made it ubiquitous, and the aggressive benefit it as soon as provided has lengthy since evaporated.
Comfort? QSRs have been worshipping frictionless experiences for years. However friction, used intelligently, will be one of the crucial highly effective engagement levers we now have. In my work on FUNstration, I present that people bond by micro-tension, anticipation, and emotional stakes, not by completely polished ease. Easy out each interplay and also you danger dropping the very texture that makes an expertise memorable.
So sure, loyalty is shifting. However largely sideways.
The Actual Bother: Merkle Describes the Symptom however Not the Prognosis
Merkle appropriately identifies the monetary pressures QSRs face: rising prices, thinning visits, tighter margins. Loyalty packages are being requested to shoulder extra of the enterprise consequence load. However the article stops in need of admitting the reality each QSR CFO already feels:
Most QSR loyalty packages don’t generate sufficient incremental habits to justify their value.
Rewards alone, irrespective of how cleverly packaged, not often produce sustained lifts in go to frequency. As I’ve argued for greater than a decade, factors and badges create loyalty theater, not loyal habits. They’re monetary levers, not engagement engines. And AI assistants will quickly expose this reality with ruthless readability.
Because of this we constructed SNES: Steve’s Web Engagement Rating. Most QSR apps lack the psychological design components that produce actual engagement: fascinating decisions, significant penalties, and time strain. With out these, digital loyalty collapses into passive monitoring. Prospects overlook packages the second they shut the app.
Redemptions and MAUs may let you know that clients are current, however they don’t let you know if clients care. Merkle’s proposed fixes strengthen the identical weak basis.
What Merkle Calls Differentiation Isn’t Actually Differentiation
Merkle argues QSRs should stand out with extra modernized, customized loyalty experiences. True, however refining a factors system or sharpening UX flows doesn’t create differentiation. These are primary operational enhancements.
Actual differentiation lives in psychological and emotional territory. In experiences that really feel alive. In methods that create recollections, anticipation, narrative, company, belonging.
Merkle nods on this course however retreats earlier than the arduous work begins. QSRs don’t want a nod. They want a brand new loyalty structure constructed on the deep engagement dynamics that video games have mastered for many years: fascinating decisions, consequence, and time strain. These are the mechanics that rework passive clients into energetic members.
We embedded these ideas straight into PUG’s Picnic platform, not as ornament however because the useful core. As a result of engagement that strikes enterprise outcomes solely exists if you transfer human habits. And also you don’t transfer habits with out psychology.
Merkle Additionally Misses an Even Extra Primary Actuality
There’s a class dynamic Merkle by no means addresses: QSR is a low-involvement buy cycle. Most individuals solely take into consideration Taco Bell, Wendy’s, or Popeyes within the temporary second they’re deciding the place to eat, not through the different 23.5 hours of the day. Engagement techniques that require ongoing consideration exterior the eating determination window are essentially mismatched to the class.
And equally necessary: if the meals or expertise disappoints, no quantity of intelligent engagement design will matter. Earlier than a QSR earns the correct to have interaction, it should fulfill the eater. Engagement amplifies momentum however it doesn’t manufacture it from scratch.
Merkle Underestimates the Risk That Will Reshape Loyalty Fully
The most important omission within the Merkle article is essentially the most pressing menace to the way forward for loyalty: AI assistants.
As I argue in my evaluation of the loss of life of loyalty underneath Google’s new AI-powered purchasing, we’re coming into an period the place clients received’t select manufacturers. AI intermediaries will select on their behalf. When an assistant selects your restaurant primarily based on optimization logic, your factors program not issues. Your personalization engine not issues. Your fastidiously optimized supply technique not issues.
This can hit QSR first and hardest as a result of QSR purchases are recurring, interchangeable, and value delicate. In case your loyalty program is merely a reduction mechanic, an AI assistant will outperform you immediately.
Merkle praises innovation however ignores this existential shift. A rewards-based loyalty program can not survive in a world the place the assistant chooses the rewards, the restaurant, and the reorder sample. The one defensible moat is emotional loyalty, group id, and interactive engagement, the weather AI can not flatten into an optimization matrix.
The place QSR Loyalty Should Go Now, Not Finally
QSR manufacturers want a loyalty transformation deeper than the Merkle blueprint. Their suggestions are smart however inadequate. The class doesn’t want a methods improve. It wants a brand new working system constructed on psychology, emotion, id, and participatory engagement. A world the place loyalty packages really feel alive reasonably than procedural. As a result of when AI assistants take over the transactional battlefield of buyer selection, the one factor your model could have left is the half Merkle by no means wrote about: the emotional, interactive world clients select to return to.
So, What Ought to QSRs Do Proper Now?
QSR leaders want a sensible start line at this time. Right here is the place to start:
A. Introduce significant buyer decisions.
Not simply “choose your reward,” however decisions that form the shopper’s journey and reveal their preferences. Even a single branching determination path can convert passive loyalty into energetic engagement.
B. Give these decisions consequence.
In recreation design, decisions with out consequence are noise. In loyalty, they’re wasted cash. Let buyer actions unlock experiences, affect rewards, and construct development. Progress is addictive.
C. Add time-based dynamics.
QSR is an impulse-driven class. Restricted-time quests, streaks, seasonal arcs, short-burst challenges. These are the mechanisms that align with actual eating habits and create urgency.
None of this requires an enormous overhaul. You can begin small: a selection mechanic right here, a consequence mechanic there, a time-bound problem subsequent month. Inside weeks, the information will present what each recreation designer already is aware of: engagement is a design drawback, not a frequency drawback.
And in an AI-mediated future, the manufacturers that thrive received’t be those who tweak their earn-and-burn tables. They’ll be those who construct interactivity that clients wish to expertise and that may’t be flattened right into a spreadsheet.
Concerning the Writer
Steve Bocska is the CEO of PUG Interactive, a pioneer in gamified engagement and loyalty. A former online game producer for Digital Arts, Disney, Sega, and Ubisoft, Steve helps manufacturers rework their buyer relationships into significant, memorable experiences.
