Creating a successful loyalty programme for your coffee shop

With the Black Friday shopping bonanza and the run up to Christmas just ahead of us, many coffee shops, cafes and other quick service outlets will be looking forward to a surge in popularity as they draw in customers from all that extra footfall.

While the revenue spike is no doubt welcome, there’s no getting away from the fact that, in this sector, competition for that footfall is always fierce.

Recent data shows there are over 16,000 coffee shop/ café businesses in the UK, all competing for their share of a £6bn revenue market.* Coupled with the reality that this market is also dominated by four big brands (Costa, Pret, Starbucks and Caffe Nero), how can independents make sure their coffee shop becomes the place to go?

Over the next two months, of course you want to ensure your business has seasonal offers that prompt shoppers choose your venue instead of another one up the street but short-term thinking is not the answer to claiming a solid market position. Your real task is to position your brand and offer as something that keeps people coming in all year round.

Creating a customer loyalty programme is a great way of achieving this.

Loyalty programmes are so common in coffee shop businesses that, if you’re not providing one, you’re taking a big risk of losing valuable custom. Another great reason for running this type of scheme is the invaluable data you can gather in the process and use to your advantage. For instance, having accurate information on what customers like the most will help you to personalise offers and improve uptake.

Having supported numerous coffee shops/ cafes in setting up their loyalty programmes, here’s the Goodtill’s key points for success:

Go digital

It wasn’t that long ago when joining a loyalty programme involved customers having to complete long-winded forms to either be handed a cardboard punchcard or wait days for a plastic version to arrive in the post (both options leading to ever more diminishing wallet space).

Literally no-one wants to do this anymore! This is why we would strongly recommend going down the route of a digital loyalty programme (i.e. using a mobile app).

As we move increasingly towards a cashless world, it’s safe to say that mobile payments are the future.

Globally the use of mobile payments is forecast to increase to 28% of transactions by 2022 (second only to debit card payments)**. Alongside the increased use of QR codes, as this trend progresses, customer demand will dictate a shift to digital loyalty programmes too. While giving people what they want, this approach also enables your business to use multiple channels for promotion and techniques like push notifications to prompt increased visits from customers.

Here at the Goodtill, our advanced loyalty module ‘Goodies’ seamlessly integrates your loyalty programme with your POS software. Allowing you to create a customised ‘points-based’ programme (or multiple programmes if you wish), the benefits include instant sign-ups, a Goodtill app allowing customers to track or use points via their phone, watertight security features and a simple management portal where you can control and monitor every element of the programme.

Set up your scheme in five simple steps

Getting a loyalty programme up and running does not have to be complicated.

Design your scheme – Consider the options for how people will collect points and what kind of reward they will get, then carefully analyse your chosen option against profit reports to ensure you’ll still bring in a profit. (See below for some ideas
Integrate your scheme with your brand – Talk to your POS till system provider about how your system manages the loyalty programme and what branding elements can be included (e.g. via logos, colours or key brand messages incorporated into the phone app)
Enrol customers – Spread the word via social media and signage at your counter (a customer facing screen on your smart POS could be used to get the message across). If you have a customer database, email them with a QR code or URL so they can quickly install your loyalty programme app on their phone
Engage and reward customers – Start issuing points and rewards as promoted within your scheme and don’t forget to up the engagement via push notifications (e.g. reminding people to visit your coffee shop to take advantage of a special offer)
Measure the results – By using the ‘Goodies’ module within your Goodtill, you can easily track the performance of your scheme/s and make changes where needed. For example, if you identify that you have a core group of extremely loyal customers, you might consider designing an ‘upper level’ scheme that gives them extra rewards

Simple ideas

The most common loyalty offer for coffee shops goes along the lines of ‘buy nine drinks, get the tenth one free.’

While not exactly original, there’s absolutely nothing wrong with this offer – it’s easy to understand, doesn’t require the customer having to go through any complex maths to see what they’re entitled to, it’s in line with what the big brands offer, and it’s an approach that is likely to support profitability within the business.

However, if you’re looking to do something a bit different, you might try running a scheme that gives points and rewards for actions like purchasing food or for bringing in a re-usable cup. You could also try giving a different type of reward altogether, perhaps bags of your signature coffee blend for customers to take home.

Depending on the nature of your clientele, you might also consider rewards that have a less direct monetary value. Points could become an invitation to an event at your venue or an opportunity for customers to have a promotional offer named after them! While our advice would be to keep things simple (and the buy nine drinks, get one free offer enables that) you know your customers best so be sure to stick to something that will appeal to them.

Success comes from valuing your customers

If the modern coffee shop customer could be summed up in three words, it would probably be this: “They want more!”

That can often mean they want a great experience more than just a coffee but it’s also true that many customers want something over and above this in exchange for their loyalty.

Creating a customer loyalty programme is a great way of showing you give ‘more’. As well as making your business competitive, it can drive up sales/ profits and help you tailor your business more closely to the desires of the very people who frequent it so that they feel truly valued.

To get going with a Goodtill loyalty scheme and be in with the best chance of turning this winter’s seasonal custom into years of loyal service, get in touch.

*Ibisworld

**Merchant savvy