Taco Bell plans to redesign its loyalty program in Q3 | Photo courtesy of Taco Bell.
Yum Brands’ Taco Bell and KFC businesses will come into sharper focus following the company’s offloading of Pizza Hut and the plan for both brands will include enhanced loyalty programs. During Yum’s earnings call Thursday, CEO Chris Turner said the company is building “deeper and more direct” relationships with its customers, facilitated largely by those programs.
“Today’s consumers expect personalized experiences, relevant offers, and seamless digital engagement from the brands they love,” he said. “Loyalty is a critical capability. … When executed well, loyalty creates better experiences for consumers, stronger engagement with our brands, and more powerful, demand-driving tools for franchise partners.”
Though KFC and Taco Bell both have effective loyalty programs in place in many markets, Turner said plenty of opportunities remain to make them even more distinctive. Taco Bell’s Rewards has been one of the most consistently productive loyalty programs in the industry, with features like Taco Tuesday Drops that include exclusive offers for members each week. Pulling a page from sneaker culture, the chain introduced its interpretation of loyalty program drops in 2024, and several brands have since followed suit.
As this space gets a bit more crowded, Taco Bell plans to push the gas even further to continue differentiating itself.
Yum Brands confirmed that it will redesign Taco Bell’s app in Q3 to “deliver a more intuitive and personalized member experience.” Though details are currently scarce, Turner said the program’s new capabilities will, “make it easier for consumers to discover menu items, personalize orders, and customize favorites.”
It will also feature an expanded build-your-own Luxe Box functionality, as well as curated offers.
“These enhancements will strengthen engagement with one of the industry’s most digitally connected consumer bases,” Turner said.
Taco Bell’s digital sales are now 47% of the business, which is significant for a mostly drive-thru concept. That number, Turner said, “speaks to the power of loyalty and the unique nature of Taco Bell’s loyalty programs.”
“The Taco Bell fandom wants to be a part of the conversation. We go far beyond just an earn-and-burn type program,” he said. “The Taco Bell program is about building a real connection with our fans. It’s part of why Taco Bell has grown ahead of QSR for so many quarters now and it’s part of how we have kept our restaurant margin so strong for our franchise partners despite the inflation the industry has seen over the last few years.”
Meanwhile, Taco Bell’s sibling chain KFC introduced a new loyalty program in 2024 in the U.S. and is now expanding that program throughout its biggest markets by the end of this year. The rollout coincides with KFC’s “next chapter” initiative to modernize the brand across its global system.
“Our approach is to make existing loyalty programs even more distinctive and to launch, learn, and refine in additional markets, recognizing that loyalty will come to life differently based on local consumer behavior and brand needs,” Turner told analysts this week. “This concerted effort to expand loyalty is helping our brands deepen consumer relationships today while building the capabilities needed to win with the next generation of consumers.”
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