Dunkin Donuts are just beginning to establish themselves in UK but in USA are the largest coffee retailer, and have applied data driven analytics and technology effectively to improve the customer journey.
A coffee and a Donut is one of the most popular calls, and is the mainstay of this convenience foodservice retailer.
Dunkin Donuts recognised the key to convenience retailing lay in the palm of their customers hands and build a customer journey revolving around the smart phone. They created an app based journey where customers could pre-order, collect and pay for their Dunkin Donut. It started with a minimum credible product, simple sign-up and sign-in and has developed into one of the most recognised programmes in USA.
. They understood the customer journey not in part but fully and recognised they were a convenience foodservice retailer and making a coffee and a donut easy for customers would drive more customers to make more visits.
Dunkin Donuts wanted to reward loyal guests in a fast and convenient manner, and provide an overall superior customer experience. Very similar to the goals that Whole Foods had in mind when launching its own loyalty program.
Understanding the Commercial Goals: Dunkin Donuts used advanced analytics to understand the commercial imperatives, and what would best drive them. They recognised that there was a bigger upside from increasing visits and number of visits that slightly increasing the average basket. ( There are only so many coffees and donuts you can eat in one sitting , but it’s important to be the coffee house of choice when there is a choice of 2-3 on the street.
Design a Customer experience that delivers the commercial imperative: They were clearly focusing on driving additional visits from additional customers because they designed a DD Perks programme that rewarded frequency vs average basket.
The Points based reward Rewarded Frequency: Assuming people ordered a coffee and a donut they earned points which became a free coffee every 10-20 visits. High value to the consumer and relatively low cost to Dunkin Donut.
They also made it easy and intuitive to sign up, and in addition to the basic points structure, Dunkin’ also included features to drive more sign-ups. Sign up on an app downloaded onto their phone,
Make it easy to get to the first reward Customers get a free reward when they join and on their birthday,. That emotional feeling of drinking a free coffee prompts more usage of Dunkin Donut
Make it more rewarding: once the first reward has been claimed targeted offers for incentives and bonus points based on consumer behaviour enable fast rewards accumulation
Make it Easy to Use / Pay Customers must pay with a registered DD payment card at participating locations, or more importantly customers can connect their DD cards to their phone, which enables mobile payments and gets more customers (hopefully) to download the Dunkin’ mobile app.
One last benefit of the program is that customers can share rewards with friends, which is high on many customers’ lists as a desirable loyalty program feature.
Technology developments to make it Easier : with the onset of Apple Pay, Dunkin Donuts enable mobile ordering through its app. Customers on their way to Dunkin’ Donuts can get their order in quicker, and Dunkin’ can speed up its line. In addition, Dunkin’ also announced interest in Apple Pay as a way to make payments easier for consumers
Three key outtakes for success:
- Be Clear on the commercial imperative: frequency or average spend
- Make it simple, rewarding to use
- Integrate across the whole customer experience to make it easy for the customer