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Digital Drives Dunkin’ Donuts

16/07/2018

Author: Paula Thomas, Chief Content Officer, Liquid Barcodes


Two distinct ideas caught my interest when reviewing Dunkin’ Donuts‘ loyalty strategy. With a familiar global brand identity described as ‘fresh, fun and familiar’, I had assumed the same approach might apply to their loyalty marketing programme – DD Perks®, but their recent digital initiatives are much more innovative than that.

Alongside menu innovations such as donut fries, they’ve implemented some clever and unique campaigns leveraging powerful payments partnerships in a way I have not seen before. They’ve also adopted voice-enabled technology to drive growth for the programme they initially launched in 2014, describing it as the ‘foundation for one-to-one marketing‘ with their customers. And clearly their strategy is working – the DD Perks programme now boasts over 8 million members, of which 2 million were added in 2017 alone!

This article describes the customer benefits and their ambitious approach – focused on ‘positioning Dunkin’ Donuts as America’s most-loved, beverage-led, on-the-go brand.’

Programme Basics:

  1. Free drink for enrolling in the programme.
  2. Earn 5 DD Perks points for every $1 you spend.
  3. Free drink of choice when you achieve 200 points (a $40 spend).
  4. Free drink to celebrate your birthday.
  5. Pre-ordering your drinks is easy and the app functionality includes location-identification for drinks to be prepared at just the right time.
  6. The app includes the ability to share your rewards with friends and family.
  7. Twice a year, DD Perks members enjoy ‘Perk Week‘ – a full week of additional valuable offers, competitions, and promotional points for orders.

The DD Perks programme is clearly very well thought-out and well-designed, and many of these benefits are similar to (or even identical to) competitor programmes. However it’s worth noting the relative generosity of the DD Perks programme. Rewards are available after every $40 spend, which is much faster than competitor programmes – for example the spend requirement  for a reward with Starbucks is 50% higher at $62.50. This may reflect the profile of customers who buy their daily drinks in Dunkin Donuts rather than Starbucks but will certainly appeal to those customers who do the mental math for any loyalty programme before signing up.

Version 5 of Dunkin Donuts US App – launched June 2018

 

Payments Partnerships:

While coffee programmes naturally use free drinks very simply as rewards for their customers (as above), Dunkin’ Donuts has gone a step further and run Perks loyalty campaigns on two separate occasions with payment partners. Firstly with Visa card, then Mastercard – offering customers bonus credit for every $10 top-up, or simply a FREE $5 credit to their account. In these cases, the reward is even-more tangible as cash in the brand’s app or wallet.

These offers are typically funded by partners from their acquisition budgets, as they access this personal and powerful channel to indirectly (but very effectively) market to DD Perks members. Once the initial payment card has been set up in the loyalty application, it will enjoy high usage frequency, and it’s likely that these payment cards will rarely be updated or changed, delivering long term returns for the partner. Dunkin’ Donuts benefits by giving members a ‘free’ perk/benefit – a highly cost-effective reward approach (affectionately known in the industry as ‘other people’s money’). Customers of course, benefit simply from the free credit.

Leveraging AI:

Dunkin’ Donuts launched it’s mobile order-and-pay functionality later than competitors in 2016, and described the functionality as it’s biggest service change since launching drive-thru – fixing its two biggest customer complaints – queueing to order and collect (which causes customer frustration) as well as order errors. In an industry with increasing levels of personalisation, app orders allows Dunkin customers to specify their exact requirements as they would in-store – with a particular focus on re-orders for simplicity and consistency. This basic functionality was essential to allow Dunkin’ Donuts to catch up with consumer behaviour changes in competitor stores, and as adoption increases, it may also reduce business costs for the whole industry, with estimates that 30% of store staff currently are required to simply take customer orders.

Further digital enhancements are even more exciting, with Dunkin’ Donuts one of the first mass market brands to leverage artificial intelligence to power voice-assisted orders from mobile – described as the next frontier of brand marketing. Launched in March 2018, the DD Perks app has been integrated with Google Assistant for both iphone and Android users, and this artificial-intelligence-led functionality signals the next phase of it’s digital evolution designed to further enhance the speed and functionality of mobile pre-ordering and payment. Sherrill Kaplan, Vice President of Digital Innovation at Dunkin’ Brands described the integration as “yet another exciting example of our commitment to enhancing speed, convenience and our overall brand experience for our loyal guests.”

Members of the DD Perks programme link their loyalty account to a Google account and the assistant functionality is triggered by simply speaking to the phone with the phrase “Hey Google, talk to Dunkin’ Donuts.” The ordering capability is focused on saved favorites and items previously ordered via the Dunkin’ Mobile® App. Once the order is placed, the app will estimate the customers exact location on Google Maps, estimate the time to reach the Dunkin’ Donuts restaurant and ensure the order is prepared for collection at exactly that time.

As one of the first mainstream brands to launch this type of functionality, it’s great to see that the brand has published a video explanation on how it works, so it will be fascinating to see whether customers adopt this channel in the way the brand clearly hopes.

New, New, New

In closing, my final observation from reviewing this iconic brand and it’s digital and loyalty strategy is to note the sheer number of strategic appointments made by DunkinBrands recently. A new CEO, a new creative agency, a new US media agency, and a new Vice-President of Digital and Loyalty Marketing have all been announced in just the last three months – signalling a new level of energy, determination and hopefully results for Dunkin’ Donuts and DD Perks.

 

September 2018 Update:

Dunkin’ Donuts has dropped the word “Donuts” from it’s brand name – becoming simply “Dunkin”.

 

About Us:

Liquid Barcodes is a leading global loyalty technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.

How we do it:

We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.

Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.

One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.

Check out some of our exciting/proven results here:

www.LiquidBarcodes.com

About Me:

Paula Thomas

Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant.

With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards. 

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