Dunkin Donuts loyalty program, DD Perks, is brewing up a storm. In less than three years, DD Perks Rewards has signed up 7.5 million members, slightly larger than the population of Hong Kong!

Whatever else you might have heard about Starbuck’s loyalty program, DD Perks is on its way to becoming a massive mobile success, and its competitors better wake up and smell the coffee.

Not just a holey bakery, Dunkin’ Donuts is a global brand famed as a fast-casual coffeehouse serving baked goods and sandwiches. Coffee is a big part of its business — Dunkin’ Donuts reports it sells 2 billion cups a year, living up to its slogan: America runs on Dunkin’.

But what’s in that special brew? How has Dunkin’ Donuts earned the top rank for customer loyalty in coffee according to Brand Keys? We took a sniff to see how the loyalty program is perking up Dunkin’ Donuts’ business.

dunkin donuts loyalty program a candybar case study

1: DD Perks is Unique Blend of Mobile Payment, Fast Coffee and Convenience

The centrepiece of their loyalty strategy is their Dunkin’ Donuts mobile app (five stars on both the App Store and Google Play!).

The mobile app allows you to earn rewards with their DD Perks loyalty program, but crucially offers three killer features that feed into each other:

  • Mobile payment, via Apple Pay or DD Gift Cards, and digital payment with Mastercard in 2017
  • On-the-Go Ordering, so you can pick up your order and skip the queue – only available to loyalty members.
  • DD Perks Loyalty, earning points with every purchase towards redeeming a free beverage

dunkin donuts loyalty program ddperks dunking mobile app five stars

Ordering, Payment, Rewards and Breakfast all in one app

This means that customers arriving bleary-eyed in the morning, can skip waiting in line (or the drive-thru)  by ordering ahead, paying on mobile, and even win points towards a free beverage for the next time. It’s a virtuous cycle that feeds itself but also improves the customer experience.

Dunkin’ Donuts identified a key ingredient for success: speed. Customers arriving bleary-eyed in the morning want their coffee and breakfast quickly, and so do customers arriving at noon or at night.

A Business Insider report noted that mobile order platforms offered ease of check-out and order customisations, leading to more frequent visits, bigger orders, and ‘intensified customer loyalty’.

By making the advance ordering and mobile payment process seamless and convenient, and tying it into the loyalty program, Dunkin’ Donuts is delivering excellent customer satisfaction and caffeination, all at high-speed.

identified that mobile order platforms not only intensified customer loyalty, but increased purchase frequency and average ticket sizes by offering easier check-out and

How do we know the app was successful? Less than two years after its launch, the mobile app reached 10 million downloads in 2014. That same year, Dunkin’ Donuts launched the DD Perks Rewards loyalty program, and reached 1 million loyalty members in June, then 2 million members, less than 5 months later.

And then they gave away a ton of points.

2: Dunkin’ Donuts Loyalty Program Offers Generous Points Giveaways (for new and existing Loyalty Members)

Dunkin’ Donuts is extremely generous with points giveaways and perks rewards for new members. Just by signing up for the program, you receive one free beverage, plus a free beverage every year on your birthday, making the choice to sign up easy.

dunkin donuts loyalty - free beverages

A free coffee for a free download is a great deal – even before the DD Perks Rewards

DD Perks offers 5 points per dollar spent, with a free (medium) drink at 200 points.  We did the math, which works out to be a free $3 drink for $40 spent. That seems unspectacular, but Dunkin’ Donuts is generous with plenty of ways to earn points and take advantage of perks:

The loyalty program is paying off too. Said Sherrill Kaplan, VP of Digital Marketing and Innovation: “The program has proven to be successful, with our most recent Perks Week program in May generating higher DD Perks sales with a larger On-the-Go Mobile Ordering mix than any other week in 2017.

“We also saw our highest volume of mobile orders since the launch of the platform, and new user trial rates doubling during the week.”

The success of the loyalty program is a shot in the arm for Dunkin’ Donuts’ business. In fact, Dunkin Donuts reported growth in average ticket sizes in 2017 and 2016. In the first quarter of 2017, up to 2% of total sales came from On-the-Go ordering from loyalty members!

3: DD Perks Regularly Engages Loyalty Members (and gets free Word of Mouth Marketing!)

dunkin donuts loyalty year in review addiction

We did the math and it’s about one iced coffee every 3 days

The DD Perks loyalty program is also an opportunity for the brand to regularly engage loyal customers, generating free publicity and new customers (through referrals!)

The mobile app allows DD Perks members to share their loyalty reward coupons with friends and family, and also buy them Dunkin’ Donuts gift cards.

But this isn’t the only way DD Perks gets its loyalty members talking. Loyal customers are happy to post on social media whenever they get their free beverage coupon or birthday reward. One loyal customer got a special treat on January when she received a ‘year in review’ email from DD Perks — and wrote an entire blog about her addition love for the brand!

In addition to these customer interaction moments, Dunkin’ Donuts regularly offers discounts to DD Perks Reward loyalty members. In addition to the coffee discount after the NFL team win, there are also special perks for baseball game days and in specific cities.

dunkin donults loyalty dd perks on game days

Dunkin’ Donuts ties in with local football and baseball teams for special promotions.

Small discounts and promotions like this help keep Dunkin’ Donuts loyalty members staying in touch with the brand, checking for special promotions and discounts. This keeps the brand fresh and top-of-mind for customers but also gets them talking to other fans and potential new customers. Their approach fits nicely with their mobile app and social media marketing and is a deliberate strategy:

“I think mobile will continue to evolve. Mobile media has become an extremely powerful marketing tool that allows us to fit seamlessly into our guests’ Dunkin’ Donuts experiences and daily routines.”

Chris Fuqua, SVP of Brand Marketing, Global Consumer Insights and Product Innovation

The Success Brewing Behind Dunkin’ Donuts Loyalty Program, DD Perks Rewards

These three ingredients make up the special blend of success driving DD Perks Rewards:

  1. Mobile App (Ordering, Payment, Rewards) delivers a customer experience that is fast, convenient, and rewards loyalty
  2. Generous Giveaways and Points draws in New Customers and rewards Loyalty Members
  3. Dunkin’ Donuts discounts and coupons are shareable and get people talking about the brand.

Through a mix of savvy investment in technology, customer-centric mobile app features and savvy social media marketing, Dunkin’ Donuts is building an empire of loyal customers and getting ready to roast its competitors.

Loyalty programs increase customer lifetime value by 30%, through bigger, more frequent purchases. Want loyal regulars for your cafe or restaurant? Candybar is an easy digital loyalty program that sets up in minutes; no coding, no hardware, no hassle. Get more regulars today!

 

Darren Foong

Posted by Darren Foong

Darren works on Growth at Candybar. He spends too much time reading fiction, performing improv, and doing things that don't scale. One day he hopes to be quite interesting.