Get with the coffee loyalty program

March 13, 2014
As the number of coffee drinkers increases, large coffee companies have been using mobile loyalty programs to drive repeat customers and increase sales.

In 2013, 83 percent of Americans claimed to be coffee drinkers, up from 78 percent in 2012, according to the National Coffee Association. Coffee is becoming an even more increasingly popular drink in the U.S. as proven by the 5 percent increase of coffee drinkers over one year. There are many factors contributing to its increase, including more recently published studies promoting the benefits of coffee and broader offerings of at-home coffee products. However, both large- and small-scale coffee companies have been utilizing mobile loyalty programs in order to obtain and drive repeat customers and increase sales.

Loyal to coffee

According to Colloquy, there were 2.65 billion U.S. loyalty program memberships in 2012 with a 26.7 percent growth in loyalty between 2010 and 2012. Six years ago, Starbucks created a loyalty program that gave registered users of Starbucks Cards perks such as the ability to receive in-store WiFi, free refills on coffee or tea and no additional charge for flavored syrups. Today, the majority of large scale coffee companies offer loyalty programs to customers, with small-scale companies not far behind. In January 2014, Caribou Coffee launched “Caribou Perks,” meanwhile one month later Tim Hortons announced it would launch a new loyalty rewards program. Now with more than 50 percent of the U.S. cell phone users on smartphones, mobile loyalty programs are increasing and driving coffee sales for these companies.

Loyalty expands mobile

In 2013, Starbucks reported that its loyalty and mobile payment app was downloaded by 10 million customers with an average of 5 million weekly mobile transactions. It is believed that Starbucks profited nearly $1 billion last year in mobile sales alone. As larger companies begin incorporating mobile loyalty programs, more consumers have come to expect this feature in other niches. Combining loyalty programs with mobile payments has encouraged mobile adoption.

Missing market

Mobile loyalty programs have been slowly emerging in retail, yet in the office coffee service industry, they are in their infancy. Last year, USA Technologies and Isis came out with a mobile loyalty program for vending that would allow users to who purchase four items via mobile to receive the fifth purchase free. However, the missing market is in office coffee service.

In its 2013 report, the National Coffee Association released that 63 percent of Americans drank coffee daily while 1/3 of the population drank a gourmet coffee drink each day. The results show coffee trending upwards. At the same time, mobile payment and adoption is increasing.

New technology allows small businesses to create engaging customer loyalty programs. In most cases, operators can pay a monthly fee to have another company provide them with a customizable loyalty program. These companies can provide operators with customer information such as spending habits, things that are most commonly purchased on the app and what days and times are most busy.

OCS mobile loyalty programs are nearly non-existent, however, the increase in coffee consumption coupled with the rise in mobile payments could open a new market allowing operators to drive repeat customers and increase sales by incorporating this feature.

Does your business have some sort of OCS loyalty program already? Share it with us here.