As Chipotle faces competition from other fast-food chains like Del Taco, it is hoping its competitive advantage is their mobile strategy as it seeks to increase sales from existing customers.
Over the last couple of years, Chipotle incented its mobile customers to participate in nationwide sweepstake campaigns through mobile marketing. Once opted-in, Chipotle used SMS to promote its offers via direct mail and website visits. Now that they have a database audience of millions of customers, it wants to increase efforts to stimulate engagements. They hope to learn more about customer buying habits and preferences in order to develop more effective marketing campaigns to drive traffic to its stores.
Underneath this initiative is the mobile wallet. Unlike an app, it doesn't have to be installed. Mobile wallets are easily saved to Android or Apple phones by customers responding to a mobile offer. The benefit? Mobile wallets are location aware. That means when a customer is near or enters Chipotle's store a message automatically pops up in their phones lock screen for easy redemption.
What they did to get customers to open their "wallet" was via a refer a friend program. When the customer gained a successful referral, they would get free chips and salsa, while the friend received a buy-one, get one free burrito. Wallet saves swelled to 2.4 million, with redemption rates of just under 50%.
With the mobile wallet technology, Chipotle can easily track who saved an offer and give notice to specific locations that may see increased traffic. Additionally, it can see areas where offer acceptance was weak and stimulate interest in order to drive sales. For the other 50% of users not redeeming their offer, Chipotle can send text reminders that their offer is expiring to create scarcity and drive traffic. They will also know who their best customer is and more effectively segment their database. Now the company can create a profile of its customer's behavior and build an audience with this data to attract new customers.
After spending a few years building a database of mobile customers, the chain is increasingly focused on beefing up insights with wallet offers.