Neighborhood Deli Franchise Leverages Data and Customer Experience to Drive Loyalty
“Xenial has been instrumental in helping Groucho’s achieve our technology vision...” – Deric Rosenbaum, President


Growing franchise restaurant wanted to encourage repeat visits and increase revenue.


Loyalty/rewards, stored value (wallet) and integrated mobile ordering, all combined into a single mobile app.


  • Xenial CRM
  • Xenial Gift Card / Stored Value and Rewards
  • Xenial (Formerly Heartland Commerce) point-of-sale

Starting Out

Several years ago, Deric Rosenbaum, President, Franchise Consulting & Services Corp., and a Groucho’s franchise owner, recognized the potential benefits of offering a loyalty program. Over time, the company had adopted point of sale, gift/rewards, and CRM solutions from various vendors.

Unfortunately, these solutions didn’t talk to one another, so Deric found it difficult to understand customer purchase behavior and the impact the rewards program and marketing campaigns were having on sales. “I had a vision for what I wanted our loyalty technology platform to look like but at the time it didn’t exist in the marketplace.” His challenges are shared by many restaurants as well as franchise systems and franchise owners:

  • Multiple disconnected data sources made it difficult to fully understand customer engagement and purchase behavior
  • Systems from different vendors didn’t talk to one another 
  • Lackluster adoption / implementation by franchisees or employees

The Loyalty Journey

Under the leadership of Rosenbaum, Groucho’s Deli enlisted the help of Xenial (formerly Heartland Commerce) to connect disparate systems, make the company’s rewards program even more appealing to customers, and develop a program that would encourage franchise owners to promote rewards in-store.

Groucho’s also worked with digital partner ToGo to develop the Groucho’s Deli app. Although the mobile app offers integrated gift/stored value (wallet) and rewards, customers who prefer plastic gift and rewards cards can use these if they prefer.

It Began with a Vision

Rosenbaum and Cindy Sutton, Director of Brand & Marketing at Groucho’s Deli and a Groucho’s franchisee, outlined guiding principles including:

  • Start with, and keep, customer experience high on the list of strategic priorities
  • Rely on facts to develop the loyalty program - and continually improve it
  • Good technology and connected data are non-negotiable
  • "Loyalty is a long-view strategy," according to Rosenbaum.

Connected Loyalty Program, End-to-end

All data, and all aspects of the loyalty, sales, and marketing ecosystem are connected, resulting in a customer experience that is seamless. In addition:

  • Marketers have a complete, integrated view of the customer across customer engagement channels, whether point of sale, gift/rewards, mobile app, online ordering, or email campaigns. “For Groucho’s leadership, having a 360-degree view of the customer helps us understand customers and engage well with them throughout the life cycle – their various interactions with our brand,” says Sutton. “Data is what tells us how customers define value, and also how to market to them the way they want to be marketed to.”
  • Whether customers order at the counter, through the app, or online, Groucho’s tracks progress toward rewards. In addition to the 80 points reward for signing up, Groucho’s gives ongoing rewards every time the customer reaches 80 points
  • Online, customers can refill their stored value wallet whether they use the app version of the wallet or a plastic gift + rewards card
  • Data closes the loop not only for marketers and leaders, but also for franchise owners. With data, company leaders can prove the value of the rewards program to each franchise owner. “We can go to them with numbers, and nothing is more compelling than results to encourage store owners and employees to promote, promote, promote,” says Rosenbaum

Deliver Perceived Value to Customers

Customers place a value on their personal information, and Groucho’s Deli hit the sweet spot when it launched the points equivalent of $5 in rewards for customers who sign up for rewards. After this incentive launched, Groucho’s doubled the number of contacts in their CRM database. According to Sutton, “For customers, it’s about the ‘give’. It’s about adding value.”

Keep the Brand Top of Mind

Groucho’s Deli leadership knew that there would be one ideal place they needed brand placement in order to keep Groucho’s top of mind: in an app on customer smartphones. Developed by ToGo, the Groucho’s app serves as the customer’s digital rewards card. In the app, customers can also find Groucho’s Deli locations, view rewards status, and place orders.

Improved Adoption, Promotion, and Engagement

In-store and online, Groucho’s promotes its rewards program heavily. Continuous, open communication with, and training for, store owners and employees helps spread enthusiasm and drives adoption.

Superior Connected Technology Underpins Growth

“As a technology partner, Xenial has been instrumental in helping Groucho’s achieve our technology vision, what I call ‘franchise in a box',” says Rosenbaum. “For a franchise system our size, and even among some of the bigger names in quick serve/fast casual, we have enviable data insights and some of the best-in-class technology. We appreciate the people we work with at Xenial. They are resourceful and responsive. And they have always been willing to roll up their sleeves and work with us to accomplish our goals.”