Loyalty Programs as a Strategy to Retain Consumers in an Unstable Economy

If you’ve been following this article series, you’ll have already read about how the rapid rise in inflation and market volatility around food and beverage products is causing significant strain on the industry. Compounding this issue is a general rise in prices in almost every sector which means customers have less disposable income to spend on treats such as dining out or takeout meals.

In that previous article we discussed how consistency, value, and customer engagement can all help inspire customers to treat themselves more often – even when they have less money with which to do so. However, there is another method of increasing engagement and repeat business in food and beverage – loyalty schemes.

With that in mind, let’s look at some examples of loyalty schemes from a few of the world’s biggest food and beverage brands and try and learn some lessons from their successes and failures.

Monday

With many people around the world – particularly those belonging to GenZ and younger – adopting healthier lifestyles, we are seeing an increase in popularity for zero-alcohol beverages which mimic the flavor and mouthfeel of their hard liquor counterparts.

Monday is one such brand and offers a range of whiskey, gin, and mezcal, all without a drop of alcohol. Monday is specifically marketing towards a young and health-conscious audience and has fostered an engaged and passionate community around its brand.

The main way it has achieved this is through its digital loyalty program which rewards customers for dollars spent on Monday products and other activities such as social media interactions. Customers earn two points for every dollar spent and can redeem accrued points against Monday drink products and merchandise.

Monday also turns its audience into brand advocates by offering referral incentives. Customers who are referred earn a $10 off coupon while those doing the referral, also earn $10 off purchases of Monday products.

Dunkin’ Donuts

One of the world’s most recognizable coffee shop brands, Dunkin’ Donuts has also garnered a reputation for one of the most rewarding loyalty schemes in the food and beverage industry for its Dunkin’ Rewards program.

Not only does Dunkin’ Rewards offer points on in-store and ecommerce purchases – ten points for every dollar spent – but also has a special VIP rewards tier for regular customers. Customers who purchase from Dunkin’ Donuts more than twelve times in a month unlock a higher rate of twelve points for every dollar spent for the subsequent three months, providing an incentive for further engagement beyond baseline loyalty.

At 250 points customers can get a free donut and, after 800 points, they can earn a free breakfast sandwich, providing great options for when to cash out.

Starbucks

As one of the world’s most popular coffee brands, Starbucks has been ahead of the game when it comes to its reward schemes. However, its latest development – Starbucks Odyssey – is raising more than a few eyebrows.

Boasting that it’s built on Web 3.0 tech which leverages the blockchain and NFTs, one has to wonder if the coffee company has been following the news on these technologies at all. For a company which claims to care about the environment and the fight against climate change in much of its marketing, embracing a technology like blockchain which is a demonstrable harm to the planet due to the processing power it requires in its current form seems incongruous at best.

Then there’s the use of NFTs, a fad investment bubble which has already burst. For their entire existence NFTs have been closely linked with scams and fraud, which makes Starbucks choosing this technology at this point in time for a brand association truly baffling. Even the role of NFTs as any kind of ownership of digital items has been demonstrated to be ephemeral at best.

This seems to be a case of a brand glomming onto buzzwords and the latest hype without thoroughly considering whether it’s appropriate for brand identity and congruity and is a clear example of how companies need to think critically when selecting technology for their loyalty programs – or any other part of their business.

Final Thoughts

There you have two examples of fantastic loyalty schemes which inspire brand loyalty, engagement, and repeat purchases, and one which we will be keeping a close eye on. The whole idea of customers being loyal to a brand is ludicrous when you think about it, so make sure you are giving your audience real and tangible reasons to keep choosing you over your competitors.

Loyalty programs are sure to be on the agenda at Digital Food and Beverage 2023, being held in June at the Hilton La Jolla Torrey Pines, CA.

Download the agenda today for more information and insights.