Conference preview: Loyalty programmes are not a silver bullet but they do have myriad benefits
As well as using its Coffee Club loyalty programme as a way of rewarding its most valuable customers Costa Coffee also uses it to collect a substantial amount of customer feedback that is largely actionable within the business. By Glynn Davis
Ben Cook, loyalty manager at Costa Coffee, who will be taking part in a panel discussion at the 4th Retail Bulletin Customer Loyalty Conference 2013 on June 12, says that 97% of customer feedback comes through its loyalty programme and that last year it helped the company collect an amount of data equivalent to 95 years of mystery shopper visits.
“We like to make sure that we get actionable feedback to every store every month, so if there is a problem with the toilet [at a specific outlet] then they’ll know about it straight away. It allows us to make sure that we’re listening to and acting on our customer feedback.” says Cook.
Creating this high level of feedback is the large number of active users of the programme (who have visited a store in the last six months) that total 3.3 million. There is a “pocket” of people who sit at this outer-end while at the other end 33,000 people visit a Costa branch two out of every three days.
Costa has turned the focus from ‘loyalty’ to ‘reward’ for these top customers, as Cook says he doesn’t want to alienate these customers by asking them to jump through hoops to get some extra points. Instead the company wants to thank them for their continued custom.
However, he does not like the idea of a tiered approach with the likes of gold cards given to the highest spending customers, preferring to have it implied by how well they are treated. “They’ll have an idea that they are a top customer,” he says. This strategy of basing the programme around rewards (that are based on spending levels) centres on his dislike of the term ‘loyalty’.
He suggests a customer who visits once every two weeks – and does not buy a coffee elsewhere - could be more loyal than a four times a week customer if the latter only visits Costa because it is the closest coffee shop to their office.
Regardless of how you define ‘loyalty’ he points out that so-called loyalty programmes are not the most important part of a retail business – everything else has to be working well. “As a CRM specialist there’s a danger you might see the programme as the most important thing in the business but it’s not. Great coffee, served by skilled people in nice environments is what our customers want. and our loyalty scheme is our way of saying thanks.”
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