Wow Bao, the mostly virtual steamed bun chain, launched the first virtual restaurant rewards program.
The program, dubbed Bao Bucks, awards customers with in-program cash to spend on food. The points accumulate only with direct orders, much like other brand loyalty programs, but it works across the more than 600 virtual locations across the U.S. and Canada (and soon in the U.K. and Mexico).
Wow Bao president and CEO Geoff Alexander said he’s excited to be the first virtual restaurant brand to do so, and leaned on a longstanding relationship between Lettuce Entertain You—the Chicago-based parent of Wow Bao—and loyalty provider Paytronix.
“I like to be first, it’s important for us to be first,” said Alexander. “Paytronix has been a partner with Lettuce for a while, so we had that existing relationship. We just had to get the technology connected to DoorDash, because it runs on DoorDash.”
In all, he said the project came together in about 12 weeks because the infrastructure was largely there. More important than being first was carving out some hospitality in the virtual space, where the connection between restaurants and customers is lacking.
“It’s so different than a brick-and-mortar. In a restaurant, you can touch your guests, you can communicate with them. In the virtual dining space, they don’t know you, there’s a lot less of that connection. This creates that connection for us,” said Alexander. “In this day in age, whether it’s a recession or just watching your dollars, you want to connect with where you’re spending your money.”
That’s especially important when something goes wrong. Moving consumers to first-party delivery opens up better communication as well with no third-party in between the restaurant and the customer.
“If there’s a problem, you’re calling a DoorDash driver or a delivery company, and you’re on hold. We’re allowing for direct connection, you can’t quantify the benefit of that,” said Alexander. “It’s the hospitality industry, we’re being more hospitable than any other player out there.”
Have you tried calling Mr. Beast or Guy Fieri lately? Good luck.
There are other benefits too, customers thinking about those points and eventually some free food is, of course, “a nice hook,” as is the data from transactions.
“The idea of a virtual brand is really taking hold in the industry, but a key challenge remains working out a balance with third-party delivery services. Smart brands, like Wow Bao, are using loyalty programs to convert customers over to their own platforms. Not only is this cheaper for the guest, but it also enables Wow Bao to learn more about their customers,” said Paytronix CEO Andrew Robbins.
It’s all very new, but Alexander said people are signing up fast which is “very encouraging to see,” said Alexander. “People are signing up and it’s something people really want, that’s really exciting.”
For Wow Bao, 70 percent of orders are from new customers. The trick for the company is to convert those into repeat customers and reward members. One method is utilizing an on-package QR code to tell guests that the reward program is out there and they can start getting points today. Typically, that QR code leads to important reheating directions, so Alexander said he hopes to get a lot of sign-ups through existing customer behavior.
If it all continues growing as it is so far, Alexander said he hopes it will benefit diners and provide more traffic for operators who host Wow Bao in their kitchens, and provide them with a better margin with that traffic. Currently, Wow Bao is hosted in kitchens across various brands including Ruby Tuesdays, Fazoli’s, Sizzler and the ghost kitchen providers. It’s also building on a partnership with GoPuff to offer delivery out of the ultra-fast grocers more than 40 kitchens.