Nando's Loyalty Scheme Comparison: Australia vs. UK

James RYN's picture
Submitted by James RYN on Wed, 2013-09-11 09:59

Nando's UK isn't the only country to recently release a new/overhauled loyalty scheme; Nando's in Australia released its own earlier this year. This works slightly differently to our one back home, so I thought I would compare the programs.

In the UK, you collect a chilli on your electronic loyalty card every time you spend £7 or more in store. Per 10 chillis gained, you get a green, orange and red reward. These can be exchanged for a number of different items, but the most expensive choices per category are the historical choices of quarter (£4.25), half (£7.00) and whole chicken (£12.50). This level of reward is quite simply industry beating, with a return of £23.75, or 34% to the customer per £70.00 spent*. Of course, most Nandoers will spend more than £7 for each stamp, but they are still getting a phenomenal return of at least 25% on average. And that really is the main benefit of this scheme: the level of reward. The actual scheme itself can be quite a headache for a user, who may end up needing to strategise in order to maximise, and a headache for Nando's, who need to manufacture and distribute upwards of a million plastic cards, and explain how reward collection and redemption options work to confused visitors. Let's also not forget the level of fraud which went on with the old stamp system.

Australia on the other hand has a much simpler scheme, likely due to many restaurants there still being franchised, and therefore slightly more difficult to coordinate. You receive one point (disappointingly, not called a 'peri-point', however the scheme is called 'Peri-perks') for every AU$ you spend, and 10 points is equal to AU$1 in redemption. This of course works out to a return of 10%; much less than Nando's UK scheme, but on a par with loyalty schemes from companies like Starbucks and Subway, and much better than something like a Tesco clubcard (1-2%). It is also easier to manage, with all management and point assignment being undertaken from the Nando's Australia app. People always carry their phones, but they don't always carry their Nando's card, so I therefore consider this a strong advantage (Nando's UK allow you to redeem later via a code on your receipt if you forget your card - extra work for the user). The scheme is currently not rolled out to all Nando's Australia outlets, as some of the franchisees presumably have to catch up with their computer systems.

So which scheme is better? Well, in my opinion, Nando's UK offers superior rewards to its fans. No level of ease of use (app based over card based, simpler redemption structure) can make up for a roughly 15% difference in return. If you are a regular user of the Nando's loyalty cards in the UK then you can quite comfortably consider your meals to at least be VAT free, and I couldn't name a single other company in any industry which can begin to compete with that. If you have your own opinion please comment below.

*Out of interest, I worked out how much this might cost to Nando's. Taking off VAT, and then using standard restaurant industry markups of 4-5 times cost, it looks like Nando's fork out roughly £4.50 per £70.00 you spend. This means as far as Nando's are concerned, they only give away a 6% slice of what you pay them. However, that doesn't include the cost of cooking your chicken for free and seating a non-paying customer in a busy restaurant while paying customers wait or are turned away.

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Comments

DamienJ's picture

Comment: 

To be honest, I never use just the loyalty card to buy stuff, even when I have the whole chicken I'll buy some drinks and split it with somebody who'll buy a couple of sides. The UK loyalty scheme subconsciously makes you purchase more than you maybe would otherwise. Previously, getting that order up to a half chicken stamp would often involve ordering a beer in favour of a soft drink, or an extra side I could do with out. They're making a large mark-up on their food, even a group mainly spending loyalty rewards is good for business (not to mention that they're almost guaranteed return customers. Get it right this time and its likely they'll be spending the next).

Tbh, I'd like a app + card system. Possibly being able to manage rewards and order easily from the app. The staff I spoke to about the UK loyalty scheme on the first day were all very clued up, but they'll probably get tired of explaining it soon.

Comment: 

The main trouble with apps is they are not compatible with all phones!! I have a Nokia 920 which is a great windows phone, but means I have totally missed out on Snapchat and 4 pictures crazes as they don't come on my phone, like wise the new Nandos app isn't compatible.
Like wise remember those that work for the MOD research or in other secure environments who are not allowed to have web access phones and can only have basic phones, they couldn't access a app.
Then there are 2 more groups the technological disadvantaged and the deaf or disabled.
The first category of technophobes include people such as my mother who doesn't do modern technological advances (she needs someone to register her new card for her so she can redeem peri-prizes) and if you look around the store you will see Nandos is slowly drawing in the Grey pound as old people appreciate good food at good value the same as anyone else. This generation of old people grew up on curries, chillis, jerk and other hot foods meaning the stereotype of bland loving fogies is no longer a reality.
The other group include my brother who is deaf and "special" but who loves chicken and loves Nandos, the point and nod approach works for his ordering but he doesn't own a phone nor will he probably ever have cause to buy one but he can use a card after I registered it to one of my emails but an app would take it to a level too far.

The Task is taking the steps needed to stop abuse of the system, whilst keeping it simple enough for all your customers to join in.

And in comparison to America, they have just brought a points card scheme similar to our old one across all US Nandos. No stamp but they initial and date it each visit you spend US$7.50 (£5). On the second visit you get a free frozen yogurt worth $2.95 (instant gratification at £2 value). Upon the fifth visit free olives or nuts at $3.95, the seventh visit brings free regular side at $2.35 and on the final 10th visit you get a free combination meal worth up to $13.35

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