What's the secret to a successful Coffee Shop?
In one word: “Frequent” Visitors
When we talk about the restaurant industry, coffee shops often take the big slice of the pie. They are everywhere, and they are always busy. Seldom you’d find a coffee shop with no customers. This is one place that people want to visit all year round, with or without any purpose.
If you’re planning to open a coffee shop, or already have one, one thing that you must know is that the key to running a successful coffee house isn’t an acquisition, but retention of customers. A good businessman understands that retaining existing customers is much more difficult than acquiring new ones. They say, “Loyalty is rare. If you find it, keep it”. But competing against the myriad of marketing messages from competitors is a lot of effort. What’s more, customers are looking for fresh, quality cups of cappuccino, no matter where they’re buying it.
If you want to be successful, imbibing loyalty in customers for your cafe should be the primary goal. You can only make it profitable when you are able to keep them visiting your cafe more often than they should. But building loyalty isn’t easy. Today, it seems everyone’s got a customer loyalty program. Customer loyalty and reward programs have become a cornerstone of marketing programs and the reason for its increased demand is simple - they simply work!
36% percent of consumers say a loyalty or rewards program is important when deciding which café to go to
When you look at international coffee chains like Starbucks and how successful their reward system is, it’s quite evident that having a client loyalty program has its own advantages. A successful customer loyalty program is designed to meet the following objectives:
• Increased rate of “frequent” customers
• Increase in average order value
• Increase the chance of customers choosing your business over
• Encourage customers to experiment with newer products
Here’s what you can learn from industry leaders!
Starbucks is expensive, we all know that and spending $5 every day, adds up! Lady Starbuck understands budgeting, and fortunately, is willing to take some burden off via Starbucks Rewards. Each dollar that you spend at this coffee house gets you two stars, and those Stars add up to some really delicious Rewards - you get a free drink or food item for as low as 25 stars.
What can you learn from this?
An average American spends $20 per week on coffee, which would add up to $1040 per year, Starbucks hooks their members with its reward system, where they can use the collected stars to get at least one afternoon fix in a week absolutely free, these perks lead to quite a few dollars in savings. Such tactics give customers the choice and the ability to make their Rewards meaningful and to meet their needs. And we all know the rule - when people save, they spend more, and when they spend more, the business flourishes.
With 41% of US and Canada-based Starbucks transactions made through the loyalty card, it’s easy to see how the loyalty program helped increase the company’s revenue and presence on the market.
In a reflection of the growing importance of mobile, Dunkin Donuts revamped its loyalty program with a bigger focus on mobile strategy. The objective for this shift was to provide guests with speed and convenience - especially during the busy holiday season. So what exactly is Dunkin' DD Perks loyalty program?
With DD Perks, guests earn five points for every dollar they spend at Dunkin' Donuts when they pay either methods of payment, including their Dunkin’ gift card, credit, debit or cash via the Dunkin' Mobile® App. Once a member accrues 200 points, he or she receives a coupon for a free medium beverage of their choice, redeemable at participating Dunkin' Donuts restaurants.
Additionally, DD Perks members receive personalized, special offers to earn bonus points that they can use to buy specific food and beverage.
What can you learn from this?
It’s about the theory of relativity! Even though the loyalty program of Dunkin’ Donuts is not something that we would tag “unique”, under any case study, but the way they promote it amongst their customers is what drives the traffic to their stores. Who wouldn’t like to get a FREE drink for every $40 spent? This sounds like a better deal compared to Starbucks Rewards, isn’t? We ask, what’s the catch? Well, Dunkin’s prices are all-around cheaper, so it can take you a while to rack up 200 points. Not the most rewarding rewards program in the world, but free is free, so can we really complain?
Simple and straightforward: every time you make a purchase, you receive a point. So one thing is for sure, after a few purchases, you will, for all subsequent purchases, will get something on their menu for free. In addition to this, you can also get a free drink just for signing up, and for celebrating a birthday. The only negative about Peetnik Rewards (that’s what they call it) is that the earned points/rewards expire in 30 days after they’re sent to your app’s inbox.
What can you learn from this?
Pretty straightforward: Tap into their FOMO! The program is designed to increase the revenue by encouraging people to buy more from your business and create a sense of urgency by putting a deadline to avail “free” purchases. So the more you visit, the more rewards you get, and the sooner you use those rewards, the more savings you make at the end of the month - at least that’s what the brand wants the customers to think.
Reward programs such as these are a win-win: Not only do they offer savings for loyal customers, but they also continue to drive traffic and repeat visits.
A coffee shop with an enticing loyalty program will always have major advantages over other types of businesses when it comes to building a loyal following, all due to the addictive properties of the rewards systems. A customer’s loyalty remains as long as you are willing to give them something that nobody else is giving, not just once, but every time they choose your business over your competition. This way they are more likely to stick to you.
While some people swear by one particular shop or chain, most are willing to jump ship for a better price, and loyalty points that they can use to get their next cup of joe free of cost. On the other hand, customers like to be recognized, and your loyal customers will especially appreciate a personal touch.
Getting that customer to visit your coffee shop just one more time instead of going to your competition is how the battle will be won or lost.