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The Compelling Case for Coffee (Subscriptions)

15/03/2020


As a professional writer with an insatiable appetite to learn new business insights, I get great satisfaction from brands who don’t just announce new products or projects – but also explain why! This is exactly the reason I have become such a fan of Panera Bread in recent months, since I wrote my first article on them in July 2019.

The bakery and cafe chain describes itself as run by “people who care” and in this article, we review their latest attempts to prove that, with the announcement of a coffee subscription programme that seems likely to win widespread approval with US consumers. Panera has described itself the idea as disruptive, however it follows almost a year behind both Burger King and Cumberland Farms who’ve led the way with this concept (at opposite ends of the price bracket), and it seems so far that this model will continue to emerge in key consumer categories. Here I discuss my three favourite features of this new unlimited coffee offering from Panera Bread.

Some USA Coffee Subscription Options 2020

1) Great Coffee with a Clear Conscience for Customers

The first clever insight from Panera Bread is that while over 160 million Americans drink coffee every day, “nearly half of them feel conflicted because of what they spend on coffee”. So while we have previously discussed the concept of subscription programmes as a way to reduce friction and build loyal behaviour by removing the daily decision-making, this certainly resonates as another compelling reason that subscription programmes are increasingly delighting customers.

Panera also quotes research that estimates that the average American spends $1,100 on coffee a year so their new coffee subscription offer “could save guests nearly $1,000 per year while providing access to unlimited great-tasting coffee”. A great insight that certainly helped the announcement earn plenty of media coverage including articles in USA Today, CNBC, Fox News and Business Insider among others.

The offer is nationwide throughout the USA, and is being managed through the brand’s loyalty app, yet another example of the increasing convergence of loyalty campaigns and digital support for restaurant operations, which continues to help reduce friction for customers as well as deliver clear commercial benefits to the business.

 

2) Commercially Compelling

From its initial trials, here are the exciting results that Panera Bread have been quoted as achieving:

  • Subscribers’ monthly visits in test markets increased “from about four to more than 10”.
  • Food sales increased 70% with those customers.
  • USA Today also quoted a 90% to 95% renewal rate for subscription packages.
  • Nearly a quarter of subscribers were new to Panera’s loyalty program, which already boasts 38 million members.

3) An Intention to “Inspire”

In a nice tone and style, Panera’s press release reflects on the impact of coffee on the daily lives of so many Americans, who rely on it as their daily treat. They wonder “could unlimited coffee translate to unlimited optimism?” – an aspirational idea that helps build brand trust over time.

Your Cup is Always Full

In true Panera style, subscribers are not limited, with options for hot or cold coffee, or indeed tea, a variety of light roast and dark roast blends, as well as plant-based milk such as almond milk at no extra charge! With so many compelling benefits, this product seems very well thought-through and well executed.

By contrast, further research for this article suggests that the BK Cafe $5 Subscription offer has in fact been discontinued, evidence that with any product (and particularly coffee), the quality has to be truly great before pricing and promotions can play their part in changing customer behaviour.

When it comes to how this great value unlimited coffee subscription programme appeals to US customers, we”ll be watching with interest and indeed it must only be a matter of time before other markets outside the USA launch similar or competing subscription options in this key category that continually outperforms the wider economy.

About Us:

Liquid Barcodes is a leading global loyalty and digital marketing 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 former judge for the Loyalty Magazine Awards. 

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