‘The power of coffee:’ Apps build loyalty and get Jersey customers in the door
TRENTON — If you have their app, there's a free cup of coffee waiting for you at Wawa every Friday morning in March.
If you buy a medium cup in Dunkin Donuts' Philadelphia market on the day of a Flyers home game using your app, it will only cost you 50 cents plus you'll earn an extra 20 points toward a free beverage.
In its New York market, medium coffee only costs a $1 on the day after the New York Rangers win, if ordered using their app.
Quick Chek is using its app to celebrate its 50th anniversary with 10 weeks of special offers through April.
The offers are the latest in the "app wars" between coffee and convenience stores, including McDonald's, Starbucks and 7-Eleven. The apps allow customers to collect points towards discounted prices and free food while building loyalty.
But the free coffee and discounted sandwiches aren't being offered from the bottom of their corporate hearts. If's also a way to leverage "power and value of coffee" to generate potential business and offer is often a loss leader, according to Sandy Becker, professor of marketing at Rutgers Business School.
"Coffee is the intro. It's the opportunity to leverage the power of the coffee, the power of the caffeine, the taste, the convenience and the flexibility it may have with the hope that folks will come back and buy other higher margin, higher profit products," Becker said.
The apps use contests, coupons, giveaways and loyalty programs that will attract both new and returning customers.
Sal Risalvato, executive director of the New Jersey Gasoline, C-Store & Automotive Association is a big fan of apps and said coffee is what gets customers in the door.
"It's a fight over whose coffee is better," said Rosalvato, who said coffee is more profitable to his members than gas, explaining that a retailer will make only $1 on a $25 tank of gas.
"But you come inside and buy a cup of coffee while you're filling up, you spend $2 and I make a buck on that. I need that gas so that you're there because if you're not there buying my gas you're buying someone else's gas and you're buying someone else's coffee."
Becker said that all promotions are geared toward generating trial but the long term survival and value is determined by if people return.
"If they have a good experience, if they have a good experience with the product, with the cost, with the convenience, with the flexibility, with the service level. If those dimensions that people value are met you're going to see a high level of return customers."
Apps also have to be fun, creative and easy to use, according to Becker, as they become part of the brand's image.
"It represents the complexities, the sophistication or maybe the value of the game" that can help turn short term interest into long term customers.
"I'd like to get my members, the independent guys, more into utilizing apps for their stores and social media," Risalvato said. "I can only imagine that these things are good for businesses."
But he admits that the independent stores aren't quite at that level.
"I'm actually thinking of running some kind of a seminar at some point to engage my members in an upscale use of social media and technology like apps," he said.
Justin Drake, senior manager of public relations at Dunkin' Brands, said in an email their app and rewards program "provides our guests with a new level of convenience and speed. With the launch of the app and DD Perks, we've been able to offer our loyal guests more personalized, relevant offers and promotions, which fit in seamlessly with their lifestyle and interests to keep them running each day."
According to Drake, Dunkin' Donuts perks program has over 6 million members and is one of the fastest growing in the quick-service restaurant industry.
Drake said that its franchisees have "broadly accepted the Dunkin’ Mobile App, as they are committed to making sure each guest has a positive experience" and has been accepted in every area of the country.
Wawa has had much success with the results of their app as well. "We planned a high volume of promotional activity in the fourth quarter of 2016, including the 12 Days of Rewards event.This campaign gave Wawa Rewards members free offers through their app each day for 12 days. We were blown away with the response from customers! In some cases, responses more than quadrupled our expectations. Because of this overwhelming reaction and demand, some stores ran out of the free products later in the day. As a result, we are using this feedback to guide our future plans and ensure we can accommodate the demand for our most popular promotion," spokeswoman Lori Bruce said in an email.
Bruce said they find their most loyal customers are using the app several times a day.
Contact reporter Dan Alexander at Dan.Alexander@townsquaremedia.com.
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