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Dunkin’ Donuts scales mobile loyalty program to drive payments volume

January 28, 2014

DD Perks is rolling out nationally

Following a test in several markets over the past few months, Dunkin’ Donuts is taking its new DD Perks loyalty program national in a move that could have a big impact on the volume of mobile payments.

The DD Perks program will be fully integrated in the Dunkin’ Donuts mobile app by early February, enabling users to earn rewards and pay for purchases at the coffee and baked goods chain from their mobile phones. The strategy puts Dunkin’ Donuts in competition with Starbucks, which is seeing close to five million mobile transactions every week.

“The program will definitely be a focus for us in the coming year,” said Scott Hudler, Vice President of global consumer engagement at Dunkin’ Brands, Canton, MA. “We are hoping to be able to reward each and every one of our guests for their loyalty with offers and perks that are relevant and exciting to them.

“We anticipate consumers being able to adapt easily to this program, since we have employed the tools that will make it easy for them to do so,” he said. “Following 2012’s very successful launch of our Dunkin’ App, our enhanced DD Perks Rewards program is an important milestone in our ongoing commitment to engage with our guests and provide a superior customer experience.
“It’s too early to say when and to what degree that the loyalty program will drive sales on a national basis. We do believe that it will be an important sales driver in the long-term but we cannot quantify it at this point.”

Free beverages
DD Perks Rewards offers customers points toward free beverages for every visit they make. The goal is to drive sales by rewarding loyal customers and encouraging them to spend more per visit as well as to visit more frequently.

The program made its debut in four markets late last year as a test. The markets were Dallas, TX; Portland, ME; Orlando, FL, and Willsboro and Scranton, PA

The app is integrated into the mobile technology platform Dunkin’ Donuts has been rolling out to its franchisees and includes a unified point-of-sales and a mobile app that delivers offers.

With DD Perks, customers earn five points for every dollar they spend on qualifying purchases at Dunkin’ Donuts when they pay using an enrolled Dunkin’ Donuts card that comes in both a plastic version as well as digital version available via the app.

Customers who reach 200 points will receive a coupon for a free medium beverage.

“Particularly in a frequency category like this, it makes sense to offer up conveniences like don’t carry cash, don’t carry a card, so that participants are more apt to pay through a digitally enabled approach,” said Scott Robinson, senior director of loyalty consulting at Maritz Loyalty Marketing, Toronto.

“One of the things that loyalty and QSR has never been adequately able to solve for is identifying customers, monitoring and tracking their behavior and guiding them to their next purchase,” he said. “Digitally-enabled approaches like this one give the marketer the view towards who their customers are, gives them a reliable and regular means of identifying what they are up to and adds a way to guide customers to subsequent purchases.”

Personalized offers
The company plans to use the program to build a purchase history with each customer so it can tailor one-to-one marketing to drive the purchases and generate sales increases for its franchisees.

Loyalty members can share their free medium beverage reward coupon with friends and family.

Dunkin’ Donuts will be supporting the new DD Perks program with an increase in its marketing budget next year, including an increase in national TV and in digital spend.

The Dunkin’s Donuts mobile app can be downloaded from the Apple App Store or from Google Play.

The app features additional functionality, including the ability for users to send virtual Dunkin’ Donuts cards to friends either via text, email or Facebook Connect.

The DD Perks program from Dunkin’ Donuts, which is already an important mobile marketer, reveals the significant commitment the chain is making to its mobile app.

Dunkin’ Donuts launched its app in 2012 to give customers a way to pay for purchases via a digital gift card loaded with money from a credit card.

Consumers can also pay for purchases through integration with Apple’s Passbook that was announced last year.

The company leverages SMS, email and social media to drive awareness of the app.

“[Mobile loyalty] also delivers some very important operational benefits to QSRs where their success is based on how well their average ticket price is,” said Alison Simpson, executive vice president at Maritz Loyalty Marketing.

“They need the volume and they need quick turnarounds so the degree that mobile can help enable customers to order in advance and to accelerate payment, that will be very positive from managing the operations and getting people through the system, which ultimately positively impacts the franchisees’ bottom line as well,” she said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

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