The Best Way to Grow Your Coffee Shop Is Through a Loyalty Program
Around 83% of adult US residents drink coffee. While that does mean coffee shops have a huge market at their disposal, it also means that they have to deal with a lot of competition as well. Well, a thoroughly-planned customer loyalty program could be just the solution someone like you (a coffee shop owner) would need in such a situation.
Don’t forget – consumer loyalty is the right way to grow your business nowadays and stand out from the rest. Just offering excellent coffee and top-notch customer services just isn’t enough anymore.
Plus, losing a customer and having to acquire a new one will cost your coffee shop much more money in the long run. So, customer retention is definitely the way to go.
And when you look at coffee chains like Starbucks and how successful their rewards program is, it’s quite clear that not implementing a client loyalty program means you’ll be missing out on many advantages.
Now, we do realize that structuring a customer loyalty program for your coffee shop can be complicated – especially if you have no experience with this. Also, it’s important to keep in mind that setting up a loyalty program for your coffee shop won’t follow the exact same pattern like other businesses (QSRs or retail stores, for instance).
There’s no one-size-fits-all solution in this case. Sure, the steps might be a bit similar, but there will be variations – variations that solely depend on your coffee shop and how it works.
So, if you’re interested in getting started, here’s some helpful info you would need in order to learn how to set up and properly structure your coffee shop’s loyalty program.
Decide How the System Will Work
By that, we mean that you first and foremost need to structure the loyalty points system and decide how to make it work. Yes, you can use stars or other loyalty indicators instead of points, but points-based accumulation seems to be the most well-known and popular one with consumers.
So, here are your options:
- A Visits-Based System – Essentially, every time your patrons visit your place of business, they receive a certain amount of loyalty points no matter how much money they spend. Once they visit your coffee shop a certain number of times (5, for example), they’ll also get a reward.
- A Product-Based System – These programs usually go hand in hand with coffee shop stamp cards (we’ll get to that in a bit too). Basically, think of this program as the “buy 9 coffees, get 1 free” system. Naturally, this system isn’t limited to that alone, but it’s just an example.
- A Cashback-Based System – The premise is pretty simple. For every dollar your customers spend at your coffee shop, a certain amount (let’s say 5%) goes back into their loyalty account. This approach usually works best for places where clients can sit down and place an order (like restaurants), though. That’s because this system enhances the engagement between the server and the customer.
- A Points-Based System – The idea is that for each dollar a client spends at your coffee shop, they receive a certain number of loyalty points (2 is the standard). Once the patron in question accumulates a certain number of points (100/200/300 or so), they are eligible to redeem a reward at your coffee shop. You can also offer a cashback incentive ($5 get added to a client’s account when they reach 100 points, for instance), but that’s entirely up to you. In our opinion, letting customers redeem rewards works better for coffee shops.
All in all, we recommend focusing on the product-based system, as it’s the one that’s mostly geared towards coffee shops. Of course, you can – and should – also combine it with the 2 points/$1 spent system too, as it will offer you more flexibility when it comes to marketing campaigns, promotions, and rewards.
A visits-based system can work as well. After all, your clients will end up re-visiting your place of business very often – especially those who are on their way to work, home, or on a break.
Just keep in mind that you’ll have to offer a decent amount of loyalty points so that your customers have a strong incentive to keep visiting your coffee shop – other than the excellent coffee, of course.
Think about Adequate Rewards
Next, you must decide what kind of rewards will convince your current clients to be a part of your customer loyalty program and keep coming back. Also, said rewards have to be able to attract new customers to your coffee shop as well.
If you’re running short on ideas, here are some kinds of rewards you could offer your patrons:
- A free cup of coffee/dessert/snack
- A BOGO offer (buy one coffee, get one free)
- A free mug/bracelet/T-shirt
- A discount on your clients’ purchase – or their next one as well.
- A free upgrade (essentially, clients can get a large cup even if they buy a small one)
- A bag of the coffee beans/ground coffee you use at your coffee shop.
Besides these types of rewards, you should also think about promoting special offers on particular days of the week. For example, you could give your customer loyalty program members a chance to earn double points for every dollar they spend on Thursdays.
At the same time, you can take advantage of the product-based rewards system we just mentioned, and choose one day of the week (preferably, a day that doesn’t see as much client activity) during which your loyal clients can redeem 2 coffees instead of just one if they have enough loyalty points.
What’s more, here’s something else you can try: Before fully implementing your coffee shop customer loyalty program, have your employees survey patrons and ask them what type of rewards they would like to receive the most.
Customer insight is always a good addition, so we recommend you take the time to do something like this as well even if you have a few rewards in mind already.
Structure the Rewards into Tiers
So, you finally have the rewards figured out now. However, you’re not done quite yet – you also need to make sure your customer loyalty program members can access those rewards in a natural, gradual, and convenient manner.
Basically, you need to split them into tiers – with the first one being the easiest to obtain, and the last one being the most difficult to access.
Here’s a basic example of how this whole system would look like (the points are just used as a reference – they are not set in stone):
- Easy Tier (up to 100 points) – The initial tier would mostly be geared towards your more impatient customers. We’re talking about the ones who don’t spend a lot of money each time they visit your coffee shop, but who visit your place of business very often. The rewards in this tier should be something they always need and can redeem with only a few visits. (a free coffee, a free cup size upgrade, a free snack, etc.)
- Moderate Tier (100-250 points) – It’s safe to assume that the clients who strive to reach this tier are loyal customers who are interested in accumulating even more points to advance to the next tier. As a result, the rewards should be popular items that define your coffee shop and your brand.
- Difficult Tier (250-500 points) – This tier is where you’ll find your most loyal – and profitable – customers. So, you’ll want to thank them accordingly. The rewards in this tier should be of high value – something said customers will really treasure and find useful (a watch, bracelet, a high-quality coffee mug, and so on). Also, we advise adding a touch of personality to further strengthen the relationship you have with your high-spending patrons (like having their name engraved on the reward, for example).
Worried that customers won’t progress through the tiers as fast as you want them to? Well, since you run a coffee shop, there’s something you can do – take advantage of psychology!
Essentially, we’re talking about having your employees offer customers a free reward (from the Easy Tier) at random. Of course, you won’t do that for the same customer every time they visit, but the expectation of an unpredictable win will still have them coming back for more.
Design Coffee Shop Loyalty Cards That Truly Represent Your Brand
Now that you have a top-notch customer loyalty program set up for your coffee shop, you also need a quality loyalty stamp card to go along with it.
The first thing you need to make sure is that your coffee shop loyalty cards represent your brand the right way. By that, we mean that the cards should feature:
- Your coffee shop’s logo.
- Thematic colors that remind consumers of your brand.
- Your store’s working hours, and contact info.
- A clear display of how many items/points a client must purchase/accumulate before they can receive a reward.
Oh, and be sure to outfit your loyalty cards with a keychain hole. Sure, people can just place them in their wallets, but many find it more convenient to carry them around on their keychain.
Furthermore, if you want to make the cards more interesting and appealing to your patrons, you can also give them a chance to personalize them. Something like giving them the option to have a personal quote or so featured on their loyalty card can work very well.
Lastly, remember to make sure that each one of your coffee shop loyalty cards features a barcode and a mobile barcode. This way, your employees can just scan the card to see how many points/rewards your customers have accumulated.
Of course, you should look into developing a mobile counterpart to your coffee shop loyalty cards as well. Yes – we’re talking about a mobile version of your loyalty stamp card that your patrons can easily access on their mobile devices.
Now, we’re saying you should do that alongside your standard cards – you shouldn’t completely replace them. Some consumers still prefer to have a physical loyalty card, after all.
Still, it’s important to keep in mind that many people eventually end up losing physical loyalty cards. And that just causes unnecessary hassle for your customers. Thus, why you should go the extra mile to offer them an alternative.
Actually, that brings us to our next – and final – point.
How to Make Sure Your Customer Loyalty Program Is 100% Successful
So, now you have a loyalty program all set up and structured for your coffee shop. However, your job isn’t done quite yet.
That’s because you also have to consider one last aspect – having a loyalty program app as well. After all, what better way to make your program accessible to all your customers and would-be clients than through mobile channels?
Don’t forget that the number of mobile users in 2017 is expected to reach somewhere up to 4.7 billion – not to mention that said number is likely to grow up to 5.07 billion by 2019!
Also, 57% of consumers prefer interacting with a customer loyalty program through a mobile device.
Thus, it’s quite clear that associating a mobile app with your loyalty program is the right thing to do. It will make it easier for you to promote your coffee shop loyalty program, attract patrons to it, and increase your revenue.
But how do you go about bringing such a mobile app to life, though? Investing financial resources into developing one isn’t quite worth it – especially since it will take a lot of time as well.
Well, you don’t have to worry about that, as we already have the solution you seek: Spoonity – an easy-to-use app building platform.
In short, our platform will outfit your customer loyalty program with a fully white-labeled app that’s completely customized with all your coffee shop’s branding info. As a result, your customers will have no trouble finding your app and recognizing it as your own.
But that’s not all Spoonity can offer you, of course.
One thing you’ll surely love is the fact that our platform can provide you with an app that features both mobile ordering and payment features.
Yes, that means your patrons will be able to browse your menu, place an order, and pick it up as soon as they walk into your coffee shop – all without having to wait in line at all! That’s the kind of convenience that can transform regular clients into loyal ones and loyal patrons into actual brand advocates.
Plus, that isn’t just convenient for them, but for you as well. That’s because you’ll get to enjoy increased in-store foot traffic this way – essentially, more clients.
Also, with the use of mobile payments, you’ll keep your clients happy, and make the checkout process much more convenient for them. While this technology is a bit new, it’s still picking up speed quite fast.
After all, approximately 20% of consumers are using mobile payments in developed markets, while around half of consumers (47%) rely on them in emerging markets. Also, the total number of users who make mobile payments is expected to reach around 150 million by 2020.
So, you can rest assured that – with Spoonity – your coffee shop will be ready to accommodate this emerging trend (as well as any other future market trends, for that matter).
And – best of all – our platform can provide you with valuable customer analytics (the kind that will help you better structure your marketing campaigns). Basically, you’ll be able to learn:
- Which ones of your customers are the most profitable.
- Which clients you should focus on growing.
- What demographics characterize your patrons.
- Which ones of your clients like to purchase SKUs.
- What items are your top sellers.
- When (which day of the week) and where your customers like to shop the most.
Moreover, our advanced analytics can even help you segment clients across numerous indices. Yes, that actually means you’ll be able to learn what level of loyalty characterizes certain client segments, and what percentage of your patrons prefer a certain item sold at your coffee shop – among other things.
Thus, you’ll have an easy time centering loyalty promotions and marketing campaigns around accurate customer data to ensure they will be successful.
Actually, speaking of promotions and marketing campaigns, you should also know that Spoonity makes it very easy for you to set such things up with only a few clicks, and customize them as well.
Plus, you’ll be able to reach your customers through multiple channels:
- Push Messages
- In-App Notifications
- Text Messages
Oh, and you’ll be happy to know that emails, push notifications, and text messages are unlimited.
And yes, our platform is 100% secure and PCI DSS-compliant, so you’ve got nothing to worry about. Loyalty points can’t even be added manually, and there are built-in features that prevent fraudulent behavior.
In case you have any other questions, feel free to get in touch with us – we’ll always respond within 48 hours.