For coffee shop owners, building a loyal customer base is key to increasing revenue and creating a stronger sense of community.
Step one: serving up great coffee, teas, and tasty treats.
Step two: creating a well-designed loyalty program designed to turn occasional visitors into devoted regulars.
Here’s why (and how) to implement a coffee shop loyalty program.
Why start a coffee shop loyalty program?
Loyalty programs live up to the term, increasing loyalty to turn occasional patrons into regular customers.
So what are the perks of loyalty? According to McKinsey & Company, top-performing programs can increase revenue up to a whopping 25% every year.
The reasons:
Greater shopping frequency
AKA: Cafe customers buying more cups of their faves more often. Customers are more likely to return if they feel rewarded for their purchases with free coffee drinks, discounts, or exclusive deals.
Higher average order value
Customers who participate in loyalty programs often buy complementary items (a croissant to go with a latte), try new syrups or alternative milk options, and even upgrade their usual order.
Stronger customer retention
Loyal customers are happy customers and happy customers stick around. Even a 5% increase in customer retention can lead to a 25–95% increase in profits. #themathismathing
Increased customer engagement
More engagement = more money spent. Personalized rewards make customers feel valued–and more likely to keep giving you their business.
Underground tip:
A digital loyalty program can help you gain data about customer preferences, allowing you to tailor promotions.
How to start your loyalty program.
Creating a loyalty program doesn’t have to be hard or complicated. Whether you go old-school or high tech, there are easy ways to create a program that pays dividends in customer satisfaction and retention.
Step 1: Pick your format
Want something that’s hecka easy: use a traditional punch card system. Ready to reap the data rewards of digital? Use an app-based program that integrates with your point-of-sale system or virtual stamp cards. Both have advantages and limitations. Choose the one that reflects your brand, your preferences, and your goals.
Step 2: Determine the rewards
Rewards should be, well, rewarding and have the “worth it factor” that will encourage patrons to sign up. Popular options include:
- Free coffee after 10 purchases
- Discounts on specialty drinks with premium syrups
- Exclusive early access to new menu items
Underground tip:
Don’t get stuck in a rewards rut. Change up the options to see which perform the best.
Step 3: Get the word out
Philosophical question: if no one knows about a reward program, does it really exist?
Make your program shine by promoting it online and IRL. Use in-store signage, chalk boards, sandwich signs, social media, and email marketing. Encourage staff to mention the loyalty program when customers order their coffee drinks.
Step 4: Monitor. Tweak. Repeat.
Loyalty programs aren’t a set-it-and-forget-it proposition. Keep tabs on adoption and participation. If customers aren’t engaging, consider tweaking the rewards or making it easier to earn points.
Step 5: Keep your customers happy
Once you have a revolving door of loyal customers, you are going to need to stock up on supplies. Barista Underground makes it easy with fast, convenient delivery of wholesale supplies right to your door.