California Pizza Kitchen Fires Up its Loyalty Program

The restaurant chain embraces digital marketing to sell more pizzas.

California Pizza Kitchen (CPK) has brought hungry customers to its tables for decades but these days, the restaurant chain needs more than a tasty pizza to fill seats. The 31-year-old chain is in the middle of a customer experience makeover.

Founded in 1985 by two former federal prosecutors,Rick Rosenfield and Larry Flax quit law to go into the restaurant business. After surveying other restaurants, the business partners came up with the idea of selling pizzas with unusual toppings like barbeque chicken and cilantro in Beverly Hills. Today CPK has nearly 300 restaurants in 15 countries.

But while people continue to crave pizza, their behaviors and preferences have changed since Rosenfield and Flax opened the first restaurant in 1985. Fewer shoppers visit malls and the adjacent restaurants. CPK also faces competition from newer dining chains across various price points.

Recognizing these challenges, CPK launched a "Next Chapter" initiative two years ago to update its menu, branding, and dining experience. In addition to its signature pizzas, CPK's menu now includes gluten-free pizzas as well as more desserts, alcoholic drinks, and appetizers. And for locations targeting the young and hip crowd, the company is renovating its restaurants with things like reclaimed-wood tables and free-standing bars.

"We needed to better understand what our guests' needs are and make sure we're in tune with them," explains Ashley Ceraolo, vice president of marketing for CPK. "And that includes how we speak to our customers via marketing."

Providing a loyalty program for mobile-first audiences was an important part of providing a better customer experience. In 2013, the company introduced the CPKPizza Dough Rewardsprogram as a mobile app with help from Paytronix, a rewards solution provider.

For every $100 spent at a CPK restaurant or on online orders, members earn $5 of "Pizza Dough" that can be spent at other CPK locations. Members who use the app can identify themselves by checking in at the restaurant, review reward balances, and receive targeted offers and messages on their devices.

The company also created physical loyalty cards for the program, but only a small percentage of the program's 1.7 million members engage with the rewards program through the card or website while more than 80 percent of members use the app. "We saw that most of our customers were engaging with us through their phones and so we've been focused on reaching them there," Ceraolo adds.

For example, last year CPK added geo-fenced messages to its marketing campaigns to capture nearby loyalty members who may be making "where-to-dine" decisions. In October, CPK rolled out two types of geo-fenced messages to members who had opted in to receive push notifications and shared their locations.

The purpose of the first message was to announce the $10 off $40 promotion, and to share the seasonal pizzas available during the month (roasted garlic pizza and shrimp scampi pizza).The message, which included a link to the offer, was sent to members who were within one mile of a CPK restaurant.

A few days later, a second message was sent to those who hadn't redeemed the offer to let them know it would expire soon and were within two miles of a restaurant. At the conclusion of the campaign, the visit rate of the targeted group exceeded the control group by about 18 percent andled to a spending lift of 10 percent. The test showed the company that "contextual messaging works well with our guests particularly because we're able to communicate with them when they're more likely to respond," Ceraolo says.

CPK also works with Paytronix's data insights team to test promotional offers and review customer data to make sure the company's campaigns are relevant and align with its customers' actions. CPK, for instance, analyzes its loyalty program on a quarterly basis to identify inactive members based on lack of frequency and spend who need a nudge to visit the restaurant.

Members who had tapered off for two quarters or more may receive an email about a special offer or event. Additionally, CPK will soon send emails promoting its birthday parties for children to customers who the company knows tend to order from the children's menu and have shared their email addresses.

"Understanding the customer lifetime journey is important for CPK," Ceraolo says, "and so we're always looking for opportunities to better meet our customers' needs whether they're adults or children."