Nobody Is Loyal to a Discount

I think you're a hundred percent right, and especially today when everybody's fighting for that consumer that's feeling so strapped.

You need multiple levers.

One, one is never gonna get it done, and we've seen that success.

But I want to go back to the point that you made kind of about those, those metrics.

I, I do agree with you on a lot of those being bullshit.

Like, I think about Velvet Taco saying close to forty percent of revenue runs through their program.

In your eyes, like, what is that number actually telling me? Like, is it the loyalty the program created, or is it loyal guests that are, that are just routed through the app? That's a big number, and that, that's, um, that could be good or bad, I guess, depending on how you look at it.

So I'm curious your perspective on that example or one similar to that in your eyes.

So when you look at an e-commerce business as an example, one hundred percent of their revenue is marketable.

They know who those people are.

They understand what they've purchased.

They can personalize the communication, and that matters because the reality is most consumers are walking around not thinking of buying from you, and so you do have to market to them.

When you look at a restaurant, most revenue is unknown.

They're people that are faceless.

And so delivering a great experience when they happen into your restaurant is, of course, a critical ingredient here.

But to me, the answer to your question is, it's a reach question, not a causality question.

You must be able to reach your guests if you expect to have a chance to change their behavior, and if you can't reach your guests, you can't change their behavior.

And so that's what that number is.

We call it capture rate.

It's, it's what percentage of revenue is attributable to a known and reachable guest.

Uh, it, it is highly correlated to the ability for good marketing to drive same-store sales, but it is not causal.

Having a bunch of people in your loyalty program does not immediately mean you will start driving traffic.