Red Robin Gourmet Burgers (Nasdaq: RRGB ) wants to see more of you. And me. And your sister-in-law. And her cousin's best friend.
This month, the would-be burger baron quietly introduced a loyalty program that it calls Red Robin Royalty. Patrons who request one from their server get a card they can register online for tracking visits. Think of it as a cross between Starbucks' (Nasdaq: SBUX ) prepaid card registration program and a frequent travel program.
Regulars may find the pitch for Red Robin Royalty familiar in that it resembles eClub, which promised patrons a free burger on their birthday. Its successor goes further by encouraging regular visits via tangible rewards. And they're good rewards. I'm already due a free appetizer during our next visit. Four more stops and we'll get $20 off the bill.
Hats off to Red Robin's marketing team on this one. I'm already inclined toward Red Robin because of its food-allergy-friendly menu and staff. Adding a rewards program makes it that much harder to justify a visit to another allergy-friendly favorite of our family's, Chipotle (NYSE: CMG ) . Both Colorado companies have won acclaim for aspiring to use better ingredients.
But if I have to choose one of them to invest in now -- to either add to our existing position in Chipotle or purchase new shares of Red Robin -- I'll take Red. Creative marketing has a way of lifting margins and boosting cash flow. Given its bargain-basement price, Red Robin doesn't need much of either to reward shareholders even more handsomely than it rewards regulars.
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