Specialty coffee chain Dunn Bros is providing faster, easier payment and loyalty experiences to its on-the-go customers via a new mobile application.

The mobile payments and loyalty app is being rolled out to all of the Minneapolis, MN-based chain’s 80 local locations. For Dunn Bros franchisees, the app enables them to build loyalty by giving users $3 of credit for every $50 they spend, for example.

“Mobile payments make sense for franchisors in the QSR space, like Dunn Bros, for several reasons – most of which involve a faster, more rewarding experience for consumers,” said Michael Hagan, chief operating officer at LevelUp, Boston.

“When your customers are always on the go, it’s important to provide a fast check-out experience,” he said. “Mobile payments is faster than cash or credit cards, so offering a payment method that saves your customers time will generate a lot of respect from them.

“Also, franchisors like Dunn Bros rely heavily on a high frequency of purchases because they sell items people consume on a daily basis. A mobile payment app with an integrated loyalty program can help make a franchise a part of customer’s daily routine and rewards the customer for visiting the franchise often.”

The Dunn Bros payments app is powered by LevelUp.

Understanding purchase patterns
Users of the app are able to find the closest Dunn Bros locations and access the menu.

The app also offers users the option to donate a portion of their loyalty rewards to a neighborhood food shelf.

Franchisees also have access to other LevelUp features such as customer data enabling them to better understand customers’ purchase patterns and engagement tools so that they can act on that data, segment customers and provide relevant offers.

The Dunn Bros payments app for Android

In the four weeks that the app has been available at four pilot locations, Dunn Bros reports a significant lift in the average ticket for app customers.

The app is expected to be live system-wide by early December.

Ahead of the competition
LevelUp is mobile payments app that users can link to their credit card, enabling them to show a bar code at the point-of-sale to make a purchase and unlock special offers from merchants.

The LevelUp branded app reached one million users in February.

Earlier this year, LevelUp introduced an API and SDK so merchants could build their own branded mobile payments app on its platform.

For example, this summer, First Trade Union Bank introduced a mobile payment and loyalty app that can be used at LevelUp’s thousands of merchants nationwide to pay for purchases and unlock exclusive offers (see story).

“Mobile payments provide franchisees with a better way to connect with customers, drive sales, and increase customer loyalty,” Mr. Hagan said. “Since many franchises are in rapidly commoditizing industries, mobile payments allow a franchise stay ahead of competition.

“Even though these opportunities are huge, franchisees have been shy to adopt new loyalty programs because they’re used to paper or plastic-card based loyalty programs, which often provide no viable method to track ROI and are riddled with fraud,” he said.

“The key to overcoming the challenge of franchisee buy in is education and communication, clearly introducing the new technology and its benefits in simple terms.”

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