Coffee loyalty schemes under scrutiny

A recent report in The Mirror has revealed that TV show, Supershoppers, (Channel 4 at 8pm Tuesday) planes to investigate the price of loyalty schemes. The post has revealed that customers at Costa Coffee need to spend £71.55 to get a free drink under the firm’s loyalty scheme, with Starbucks My Rewards works requiring a spend of £40.50 in order to get a larger latte – the equivalent of 15 cups.

Researchers for Channel 4 show Supershoppers, found McDonald’s loyalty scheme to best value as customers only need to purchase six cups in order to get a freebie – the equivalent of £11.34.

Retail expert Clare Bailey, from Retailchampion.co.uk commented “You do have to spend a lot of money at Costa to get your freebie so don’t stick to just one loyalty scheme”

However, she added that loyalty should not just be analysed from one perspective and that being a member of the reward system allows access to Wi-Fi and other perks.

She also added
“Collect loyalty points at all the places you shop and eat and when a freebie comes up it is a nice perk – rather than going out of you way to be a loyal customer.”

As Professor Steven Van Belleghem notes in campaign “Consumers don’t compare a company to where they were a year ago; rather, they compare companies to the ‘best-in-class’. In a digital world, there is often a huge rift between consumers’ expectations and what the average company is actually offering. With ever-increasing transparency, nearly every industry is turning into a commodity industry, which consequently results in a strong focus on price.”

This echoes research from Accenture that shows unlike last year, when the promise of deals most drove loyalty, customers today find financial rewards (61%) and programs highly tailored to their needs (58%) much more enticing.

Whilst the number sound steep, with coffee a commodity product – coffee is the most popular drink worldwide with around two billion cups consumed every day – it is key that suppliers differentiate outside of price and points and tangible rewards.

With Wi-Fi almost a prerequisite, time will tell how coffee retailers harness brand loyalty in their own sector. Whilst McDonalds highlight on price, Starbucks have been using influencer marketing to attract millennials, and Costa uses outdoor media and ‘word of mouth’ gated access as part of their strategy, using an app that allows users to participate in secret events as a way to garner a community of coffee lovers.

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