Sponosred by Whirley-DrinkWorks!
It costs a lot less to keep an existing customer than to attract a new one, restaurant marketers often say. Hence the rise of loyalty programs which encourage consumers to regularly opt for a particular restaurant's coffee, sandwiches or pizza rather than taking their business to the competitor down the block.
For operators, digital apps, loyalty programs and refillable travel mugs and tumblers build long-lasting and lucrative relationships. Many consumers find it fun to rack up reward points and earn the freebies which result from regularly patronizing a retailer or service provider.
“With so much coming at us in our lives, we want to take advantage of things that will make our lives easier or make us feel special,” says Neil Culbertson, founder of Growth Partners, a restaurant marketing consulting firm in Greenwood Village, Colo.
Loyalty makes a difference
When it comes to coffee, loyalty programs matter. The following data points are from 2017 research by Datassential:
- Twenty-five percent of consumers are enrolled in a loyalty program at the place they go for coffee most often. About half (51 percent) are at least interested in a loyalty program at their primary away-from-home coffee location.
- Sixty-three percent of those who are part of a loyalty program indicate that their consumption of coffee has increased at that location since enrolling in the program.
- Eighty percent of those who are not currently enrolled in a loyalty program but are interested indicate they would be at least somewhat likely to increase their coffee consumption at that location if they were to join the loyalty program (28 percent very likely, 53 percent somewhat likely).
Playing the loyalty card
“Loyalty programs based on digital apps seem to be the tool of choice for coffee retailers like Starbucks, Dunkin’ Donuts and Tim Hortons,” Culbertson says.
Active membership in the Starbucks Rewards loyalty program in the U.S. grew 11 percent over the past year to 14.2 million members, according to the coffee chain’s first quarter fiscal 2018 earnings release. Member spend accounts for 37 percent of U.S. company-operated store sales.
The Starbucks mobile app is a fast and convenient way to pay in-store or order and pay ahead and skip the store line. Other features are reward “stars” which are redeemable for food and beverage, a free birthday drink, free refills in-store and special events and bonuses just for members.
Similarly, mobile ordering and free beverages are key benefits of DD Perks at Dunkin’ Donuts. Company officials told shareholders and analysts that the loyalty program grew by more than 2 million members last year to reach a total of approximately 8 million. Mobile ordering, which is available only to members, had an 80 percent retrial rate.
At Caribou Coffee, the Caribou Perks program offers members complimentary beverage size upgrades, flavor additions and food items based on points earned for food and beverage purchases. The Shmear Society at Einstein Bros. Bagels invites members back with emailed promotions and freebies on food and coffee.
Making it personal
Some brands are offering more personalized loyalty enticements. For example, Barista Picks are free food and drink items selected exclusively for holders of the new Starbucks Rewards Visa card. In addition, the Starbucks app employs sales data and artificial intelligence to tailor menu item suggestions to members’ personal preferences.
Dunkin’ Donuts promises to “serve up surprises” each month with its DD Perks rewards, including “extra treats and goodies just for being you,” as the website declares.
“Marketing is becoming a one-to-one effort,” says Culbertson. “If somebody promotes the sandwich that you buy frequently, you are much more likely to be engaged with that offer.”
The role of refillable mugs and tumblers
Another way operators are building brand loyalty and repeat visits to their restaurants is with travel mugs and tumblers which bring savings on refills. For example, Einstein Bros. Bagels patrons who purchase a $3 travel mug get the first cup of coffee on the house and discounts on future refills. Au Bon Pain offers a free travel mug with discounted refills for those who join its eClub.
“We’re seeing a two-pronged approach to offering refillable travel mugs at several of our larger coffee bakery cafes in order to appeal to the broad spectrum of their guests,” says Ira Gleser, vice president of industry relations and restaurant channel marketing lead for Whirley-DrinkWorks! “These operators offer an everyday, less expensive plastic refillable mug program and also feature a premium stainless or ceramic mug retail offer for guests who want to upgrade their coffee travel mug experience.”
“Some brands may find that a combination of an app program and a mug-related loyalty program is a strong offering,” says Culbertson. “Consumers fall into different camps. One size may not fit all nor capture the greatest number of guests.”
In today’s hypercompetitive restaurant industry, it is vital to keep patrons engaged and visiting regularly. Digital reward programs and refillable travel mugs and tumblers keep them coming back with special offers and discounts which surprise and delight them.