Loyalty programs: Savvy customers vs. savvy operators
Jul 19, 2020, 12:50 AM
Coffee loyalty programs are commonplace in today’s cafés/coffee shops. Let’s face it, customers love free stuff. On the other hand, business owners don’t want to give anything away. A loyalty program sits in the middle of this perennial struggle.
Savvy customers vs. savvy operators
The best compromise? Have a loyalty program but make it difficult to use. Physical (cardboard) loyalty cards are great because they get misplaced (like gift vouchers). The thrifty types will stick with it, while the discount-indifferent types won’t be bothered. Implementing a coffee loyalty program should not be too costly or time-consuming for business operators. It is important that you let the customer take responsibility for their own rewards.
Spending money on a loyalty app which ultimately loses you money is nonsensical. Remember, the purpose of a loyalty program is to show gratitude to good customers, it does not attract loyal customers. People don’t come back to buy your coffee just to get another ‘stamp’. They ultimately come back (and become loyal) because they like the coffee. Why would anyone endure 9 bad coffees just to get a free bad coffee? It makes no sense. The best source of loyalty is a great product and great service. Focus on that.
What about keep cups?
Some cafés offer customers a discount for using a keep cup. A keep cup discount combined with a coffee loyalty discount can be a recipe for disaster for a small business. Coffee sales are a key revenue source for a café, discounts can quickly add up and really impact the bottom line.
A customer’s choice to use a keep cup is a great one but, as a business owner, don’t feel pressured into giving a discount. If you do want to give a discount, discount it (at a maximum) by the cost of your packaging. There is no need to lose money because a customer chooses to use a keep cup.
The takeaway
A coffee loyalty program is not a source of loyalty in itself. Focus on providing your customers with a great product and great service. Implement a loyalty program that is cost-effective and gives the responsibility for its use to the customer.
