COFFEE LOYALTY RUNS ON DUNKIN
2014 is the eighth year in a row that Dunkin Donuts nabs the top spot in Brand Key’s customer loyalty rankings. Their top ranking is only in the two coffee categories (coffee and packaged coffee), but it is a fairly impressive grab for a company that competes with Starbucks on the coffee side of their business and Krispy Kreme on the donut side of their business. Part of Dunkin’s allure to customers is their loyalty program, the DD Perks.
Brand Keys (@BrandKeysNY) utilizes surveys and interviews to rate customer loyalty. Dunkin Donuts has come out on top for so many years because of its innovative marketing, customer loyalty programs, attention to detail, and their desire to track and better understand the demographic they are dealing with. Contests and gamification also play an imperative role in the brand’s customer loyalty.
Dunkin Donuts focus on regions, with games and specialty items, may also play a role in the company’s success with customer loyalty. It is also important to note that Dunkin Donuts is one of the few coffee retailers who focus on more than just coffee beverages. Dunkins complete line of donuts and breakfast sandwiches allow it to hedge out other competitors who focus their work on one or the other.
With that being said, it is important to also note its loyalty program as one of its best initiatives. In 2011, Dunkin Donuts launched their DD Perks program, although a coupon program previously existed. The 2011 rewards program allowed users to gain “Dunkin’ dollars” every time they purchased a beverage, snack or breakfast sandwich. When the user accumulated enough points, they were offered free beverages and other snacks. This year, the program has been completely revamped.
Customers who use their DD card are given 5 points for every dollar they spend. When they join, earn 200 points, or have a birthday they are offered a free medium beverage of their choosing. Considering the fact that a normal cup of coffee can run about $3.00 at Dunkin’ it only takes about 14 beverages to rack up a free drink. In short, for every $40 a customer spends, they are given a free drink. Bonus point are also added to the account, and special offers are given to customers based on their buying trends.
There is one catch to the program though, users have to use their DD rewards card to pay for their drinks. That means, users have to load money (there are several ways to do so) to garner the savings they are looking for. It is a particularly smart move on Dunkins’ part. For vital marketing information, they are giving users a free drink.
The use of the DD card for all purchases also helps Dunkin’ Donuts keep track of their customers, what they are buying and when they are buying it, leading to a better understanding of the market and demographic they are targeting. The program, similar in nature to Starbucks’ loyalty rewards program, is nothing new, but it most assuredly is effective.
Brand Keys build their Customer Loyalty Engagement Index to reflect the companies in each category that engage customers and build customer loyalty profitably. The way they put it:
“These drivers not only define how the consumer will view the category, compare offerings, and, ultimately, buy, but also identify the expectations the consumer holds for each driver. The brand whose drivers come closest to meeting (or even exceeding) those of the category Ideal is always the one whose customers will demonstrate the highest levels of engagement and loyalty over the next 12 to 18 months.”
This year’s Customer Loyalty Engagement Index examines customers’ relationships with 555 brands in 64 categories. Why do you think Dunkin Donuts loyalty program is consistently ranked higher by customers than other coffee brands?