• by Karlene Lukovitz  @KLmarketdaily, January 12, 2010

Compared with other industries, restaurants have been relatively slow to jump into loyalty programs. But these programs have been on the upswing since the foodservice industry has begun to battle declines in patron traffic and spending levels.

A loyalty club seems a natural incentive route for Outback Steakhouse, which recently implemented a more moderately priced menu but (along with Starbucks) is one of the few chains that has resisted using a string of loss-leader price promotions or freebies to drive consumers into their restaurants.

Still, the big challenge for any new rewards program these days is how to make it compelling enough to differentiate it amid the sea of programs competing for consumers' attention and participation.

Outback believes it has found an innovative answer to this challenge, in the form of a partnership with country music superstar Tim McGraw.

The "My Outback Rewards Program," developed for Outback by Rally Marketing Group, will officially launch on Jan. 25. In addition to members-only Outback food/beverage offers, this program will give members exclusive access to a variety of offers and events surrounding McGraw's 2010 Southern Voice Tour (which kicks off in February), with an added element of opportunities to contribute to local community causes.

This is Outback's first nationwide rewards program, although it is currently piloting a regional "Boomerang Club" program in Michigan markets.

Outback's relationship with McGraw commenced last fall, when McGraw's "Southern Voice" album was released: Each CD of that album includes a special $5 offer for Outback.

A second major element was unfurled on New Year's Day, during the Outback Bowl in Tampa, Fla., when viewers were encouraged to text an entry to an Outback Adventure Sweepstakes, which offered prizes of trips for two to Australia to see McGraw perform there.

Outback's main Web site (outback.com) is already encouraging users to sign up for their personalized Tim McGraw gift cards, and to "check back on Jan. 25, when the adventure begins."

The program's McGraw-related rewards will include exclusive songs/ downloadable content, McGraw merchandise and autographed memorabilia (such as guitars), ticket and VIP access promotions (chances to see McGraw perform a private acoustic set prior to each concert, for instance). On sign-up, each new program member is entered into three separate sweepstakes drawings for the Australia trips.

Accumulated points will be redeemable toward prizes from monthly sweeps. Outback patrons are being advised on the new site dedicated to the rewards program (myoutbackrewards.com) that a membership code can be obtained with any purchase at an Outback (the code will be printed on the receipt).

In-restaurant promotions will support the program's launch. For instance, the partnership includes opportunities for Outback restaurants within tour cities to hold on-site "radio listening parties" and offer McGraw-related perks like song downloads and ticket promotions.

In addition, throughout the tour, the partnership will raise money for local charities (including ones supported by McGraw, such as Operation Home Front, Friedreich's Ataxia Research Alliance and Tim McGraw's Neighbor's Keeper Fund of the Community Foundation of Middle Tennessee) via in-restaurant promotions in each tour city, sales of an exclusive McGraw T-shirt and other efforts.

Outback "challenged Rally to develop a strategy that could have local relevance while creating an impact in our restaurants nationwide," Outback Steakhouse VP, marketing Desmond Edwards tells Marketing Daily in an email. The 360-degree solution presented "was a fit because it was based in extensive research on the Outback customer" and also provided "ongoing measurability with a positive ROI model, added relevance to our local markets, rare synergies from a culture standpoint" and new ways for Outback and McGraw to give back to local communities, he noted.

Following the Jan. 25 launch, Rally (which also negotiated the McGraw partnership) will be activating the program's traffic-driving elements in more than 50 tour cities, as well as tracking and analyzing restaurant traffic, redemption and media value results.

Of course, customer data and an entry to ongoing online and social media relationships with customers and prospects are prime objectives of any loyalty program. "When I see a restaurant chain implementing a loyalty program now, I think of it as being a part of their social media program," observes Dennis Lombardi, EVP, foodservice strategies for WD Partners, a design and development firm for restaurants and retail chains.

According to a Rally spokesperson, Outback will initially email rewards program participants once per month. Over time, participants will begin to receive messages both from Outback and McGraw's fan outreach channels.