In food delivery, money is in the margins. But hitting those margins is a delicate balance. Add surge pricing, and you leave a bad taste in existing customers’ mouths. Give steep discounts and you may gain some new customers — who never come back or aren’t as profitable in the long run.
The good news is that there’s a happy medium: cash back offers. And one of the most popular food delivery chains in the world is using it to their advantage.
They came to Kard not only because they saw cash back offers as a cost-effective method of new user acquisition and existing user reactivation, but also because Kard’s network already included issuers, banks, and fintechs that their target audience (Millennial and Gen Z customers) use on a daily basis.
Goals
Young consumers expect frictionless mobile ordering, fast delivery, and personalized rewards that feel truly valuable. They’re loyal to brands that save them time, make them feel savvy, and fit seamlessly into their busy lives.
This delivery company saw Kard’s cash back offers as an opportunity to meet these expectations by:
- Marketing offers in a brand safe environment that Gen Z and Millennial cardholders use and look at often (banking apps)
- Incentivizing new orders (and higher spend)
- Rewarding existing consumers for being repeat customers
- Increasing overall engagement at the end of Q1, typically a slower season for them
Solution
Knowing that Gen Z and Millennials now make up more than half the world’s population, the brand wanted to work with a rewards provider that would help them get in front of — and understand this audience — without breaking the bank.
So, they teamed up with Kard to:
- Give new customers a 10% cash back reward on each delivery (up to $5).
- Displayed in banking apps like Varo whose primary users are Gen Zers and Millennials, right during the middle of March Madness, when they might be likely to spend more.
- Sent redeemers a push notification right after they earned their reward, reminding them of the money they saved buying with this brand.
Results
Between early February and the end of March, the delivery brand saw an influx of 10,000 new customers, and 6,000 resurrected customers who had previously ordered food on the app came back.
To determine just how much of an incremental lift this had on the customer’s key KPIs, Kard’s marketing science team completed a randomized controlled trial in tandem with the new campaign.
Ahead of launch, users in each of the customer’s target audience segments were randomly divided into two equal test and control groups. Users in the test group received cash back offers, and users in the control group did not, serving as a point of comparison.
By the end of the campaign, the new customer test group saw a:
- 44% higher spend rate
- 9.7% higher conversion rate
The resurrected customer test group saw a significant increase in AOV (11.4%) — a big accomplishment, since this group already had high baseline spend.
“Incrementality is what separates good performance marketing from guesswork, especially in a category where every order counts. We measure incremental lift for our customers to give them the proof they need that cash back offers really work — and give them the confidence to continue optimizing for the results they want.” - Ben Mackinnon, CEO of Kard
The success of both groups signals a major opportunity for this customer to enhance their offer messaging and segmentation in their next campaign. That way, they can capture higher-intent prospects (and nudge existing diners to order again) at exactly the right time of their lifecycle.
And Kard has the features to assist with that — an excellent account management and marketing science team, customizable offer notifications, and clear attribution to determine:
- Which messaging works best
- What offer presentation drives clicks
- What kinds of offers produce the most engagement
