Case Study: CKE’s Own Check-In App Lends Accountability and Control

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How does a restaurant group with 3,000 locations spread across 43 states manage a robust location-based rewards program without sacrificing functionality or flexibility? For Brad Rosenberg, manager of digital strategy and marketing for CKE Restaurants — which owns the Carl’s Jr. and Hardee’s fast-food chains — the answer was to build a mobile app that could work across multiple point-of-sale systems and still provide the accountability that individual franchise owners require. The Happy Star Rewards app logs the specific times when users check-in and redeem their rewards. The company then uses that data to monitor the food prizes its cashiers give out as well as to prevent user fraud.

Can you tell me about your Happy Star Rewards mobile app and how it works?
It is a GPS-enabled Apple and Android app, which requires users to check-in. The first and every fourth check-in afterward, they get to spin the ‘Wheel of Awesome,’ where they are a guaranteed winner of something awesome. [The wheel] is on the phone; it’s within the app. For food prizes, they simply show their phone [to the cashier]. We also have premium prizes. We usually have a monthly premium partner, sometimes more than that, and we have several branded items as well. If you win one of those premium prizes, or branded items — like t-shirts and sweatshirts and speakers — there’s a form to fill out and it’s mailed to you pretty instantaneously.

How do customers know to download the app?
When we first launched [in December 2010], we had a large buy with several media partners. [We used] Jumptap, and we had a large media buy. We had in-restaurant marketing materials, including bag stuffers. Basically, with each purchase people got a little note to download the app. We had in-restaurant pieces, like our tray-liners, so [with] every order you would get the little piece of paper on your tray. We had a cardboard stand-up piece, also. And [we did] a lot of [advertising] through our own channels, via YouTube, our website, Facebook, Twitter, and email blasts. Really, we’ve always considered this a loyalty program. It is for our frequent guests of the restaurants. It’s trying to create that loyalty or encourage that loyalty to the restaurant.

A lot of the modern technologies aren’t necessarily at our registers, so we had to really develop something that would work for a varied amount of systems.

Was there any challenge in teaching the restaurant employees how to use the app or redeem the food rewards?
Yes. The entire system and how it is set up is pretty complicated. We are a very large company. We are actually two regional companies with several different point-of-sales systems out there. Not everyone has the same system. CKE Restaurants owns quite a few units, but then we have a couple hundred franchise owners. They have different requirements and different setups. It was really creating a whole new entire system to handle paperless coupons.

How did you overcome that, given that you’re dealing with multiple POS systems?
A lot of the modern technologies aren’t necessarily at our registers, so we had to really develop something that would work for a varied amount of systems and also from an accountability point of view, to make sure we can audit everyone, and everyone can know that, “Yes, we gave away five free burgers today,” and “No, we didn’t give away 20 burgers today, we gave away five, and there should only be five.” Just from an auditing and employee and user fraud [point of view], we need to be able to have those checks and balances using the check-in. The check-in gives us the who, when, and where, because you have to check-in in order to start the process. And then you have to click to redeem, which gives us the second time stamp. We have two time stamps, so we know exactly what user came and used the application, at what restaurant, at what time. Then we have a second time stamp to say they did this action at this time. Each coupon or food offer has its own code and that’s relayed, as well, when they hit ‘redeem.’

When they hit ‘redeem’ we now have these two time stamps — when they hit ‘check-in’ and when they hit ‘redeem’ — so we now know that a transaction should have happened within that time frame, which is collected nightly on a nightly report. We have set up a system of emails. Some are more complicated, depending on the size of the franchise group. But there is a nightly gathering of all the information and we send out a report to each individual unit, if they want to see a daily report. It will show that you had 35 people checked-in to the restaurant today, you had 15 coupons redeemed and they were redeemed at — one at 07:00, one at 13:50 — and it tells you exactly what the offer was that was supposed to be redeemed. The cashiers have been trained and they have a system. The coupons are in the system, so a $1 off burger matches on the report, which will match on the receipt, so everything matches.

Is this kind of detailed reporting one of the reasons you opted to develop your own check-in app, rather than working with an existing platform?
What I just explained to you was by far one of the No. 1 reason. Accountability. Control. [The offers are] also day-parted. There’s a breakfast wheel and a lunch/dinner wheel, so two different times of day, two different customers, and if you go in at 5:00 you don’t want to see a breakfast biscuit [reward]. If you’re going at 5:30 in the morning, you don’t want to see a big hamburger, you want a breakfast item. So we have it day-parted, and we have approximately 30 offers in each day-part. [The app] can be updated instantaneously. It can be modified instantaneously. We have roughly 60 different offers to offer our guests.

What metrics are you looking at to measure the success or failure of a program like this?
It’s transactional. It’s number of users. So, the amount of users. We look at the granular unit level. We look at how many users are at this particular location. We see repeat traffic and frequency of traffic. This is always targeted for our loyal customers. One of the goals was always, if somebody was coming four times a month, hopefully because they now have Happy Star Rewards, they are now coming five or six times a month.

Do you have any sense of whether that’s actually the case or whether the app has worked?
Yes. We have a very loyal user-base. Everything that we show — we see the frequency of use. I do [know how many people have downloaded the app and checked-in], but we do not share those numbers.

What are your views on automatic check-ins? Is that somewhere you see your app going in the future?
It’s more about the user engagement [for us]. If you download the app, the Wheel of Awesome is engaging in itself. You click, you spin the wheel. We want the user to be involved in the experience. Now, we’re always looking to expand and bring in other players. You can link your Foursquare account and your Facebook account to the app. [We want] to get some of the broader users who aren’t necessarily our target but are users of check-in apps. We would like to bring them somewhat into the fold, as well, and figure out how to get some of the elements to exist in a broader spectrum. So maybe you don’t necessarily have to download Happy Start Rewards to experience [the rewards]. Maybe they are just a one-time user, but it could be worth giving them a taste of the experience.

We have worked with Kiip on something like that. [Kiip] is a level up, real rewards for virtual play. It’s for in-game use, while you’re playing a game, rather than just getting more points or whatever you’re playing for, after you complete Level X, you will be granted a real world item. We partnered with them. I think Words with Friends is a game they have; there is a whole slew of games. You complete the level and it says “Congratulations. You’ve earned a special prize from Hardee’s. Click to continue.” They click to continue, and they get a simple Wheel of Awesome, where they click to spin it and they will win a prize and be asked for information, and they get a light taste of the Wheel of Awesome without having to download the app. It is live now.

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This interview has been edited for length and clarity.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.