Chipotle hatches food giveaway to win back customers

Chipotle hatches food giveaway to win back customersA Chipotle Mexican Grill employee prepares food, in Seattle.(Photo: Stephen Brashear, AP)
Chipotle Mexican Grill is hoping some free food will help it win back some mojo with some of its most valued customers.The chain is launching a “Chiptopia” summer promotion starting Friday that rewards customers for the number of visits. At its lowest level, diners who buy four burritos or other entrees get a fifth one free.The promotion is not so much aimed at luring new customers as it is inducing some of the chain’s better patrons to come back more often.”This is all about getting the customers who used to be the most frequent — who went there 25 times a year — back the restaurant and eating,” says Matt McGinley, analyst for Evercore ISI.The promotion shows that fast casual eateries like Chipotle are willing to get creative to compete against the fast-food chains, which have seen rampant discounting lately. It also shows the lengths that Chipotle is willing to go to win back its core customers after enduring a wave of bad publicity around its E.coli and norovirus scares last year.“Unlike…earlier promotions, Chiptopia is longer lasting in nature and provides the opportunity for multiple rewards over the next three months,” says Chipotle spokesman Chris Arnold. “We are exploring options for a longer-term rewards program, so it is certainly possible that those benefits will extend beyond the summer months.”From July to September, qualifying purchases of at least $6 before tax can elevate Chipotle customers to three possible status levels — mild, medium and hot. The more often they visit, the more the rewards pile up.Further incentives, or “bonus rewards,” are available for customers who reach status levels for all three months. At the highest level, Chipotle diners who maintain “hot” status for three months are get “catering for 20,” valued at $240.“This is really unlike any other rewards program in the industry, and we believe our customers will appreciate the generous nature of the rewards.” Arnold said.Not all analysts are sure it will work in getting Chipotle back on top of the restaurant game.“We believe that this promotion does not offer much for the larger population of less frequent Chipotle customers,” said Stephen Anderson of the Maxim Group in a note, “and that the company may need to take additional promotional measures in the coming quarters to bring these customers back.”Contributing: Chris Woodyard

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