Pizza Hut uses a frequent buyer program to grab a bigger slice of its best customers’ business

Ideally, loyalty programs should be like valentines from brands to consumers — ways to single out and retain the objects of their affection. When programs work, the company is rewarded with loyalty, the consumer’s way of saying “I love you” back. Ah, but love is tricky. Today, most loyalty programs have lost sight of their true desires. Many programs are little more than frequency cards burning holes in the customer’s pocket. Others are essentially discount programs targeting no one in particular — usually at the expense of the company’s bottom line.

Pizza Hut’s VIP (Very Into Pizza!) program is a notable exception. The 3-year-old program has not only managed to win customers’ hearts, it also got them to be more loyal along the way.

The company’s fee-based program, promoted in-store, online and through direct mailings, is a model of simplicity: pizza lovers pay an annual fee of $14.99. In return, they automatically receive a free large pizza and can earn another free pizza every month if they place two orders per month. Plus, VIP members receive a coupon for a free side item every calendar month.

Rob Boverie, director of media for Pizza Hut, says: “Over the years we have learned the biggest opportunity is to retain our customers and especially our best customers.”

The final idea for the VIP program, created in collaboration with marketing agency hawkeye/FFWD, included a fee component.

Paul Bowman, managing director of direct and loyalty marketing at FFWD, recalls some early feedback when he suggested charging the company’s best customers a fee to join. “They were skeptical of asking their best customers to pay for being in the program,” says Bowman.

But Bowman, who has helped brands launch loyalty programs since the late 1980s, was able to point to other successful fee-based programs that he has helped launch.