Confessions of an addict. I’m hooked on Dunkin’ Donuts (the App, that is).

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Who knew that Dunkin’ Donuts hazelnut coffee was so good? Who knew you can’t start a day without it? Certainly not me, until recently. For years, I barely had a reason to set foot in a Dunkin Donuts, with the exception of needing an occasional veggie egg-white sandwich protein fix.

But now, I purposely visit a Dunkin’ Donuts just about everyday! Suddenly, I have a Dunkin’ Donuts credit card in my wallet. And I keep the Dunkin’ Donuts app readily accessible on my iPhone. I’m “running on Dunkin'” as I’m writing this!

That’s some impressive brand loyalty I’m showing, considering that Dunkin’ Donuts doesn’t help me lose weight, make me money, or take strokes off my golf game.

How did Dunkin’ Donuts penetrate my wallet and my iPhone in just a few months,while overhauling my daily routine?

What’s happening here?

The App that Knows Me And Rewards Me With Free Coffee!

To understand the power of Dunkin’s digital loyalty program, let’s go offline to a locally owned breakfast and lunch deli I visited frequently. I’d walk in, place my order, and grab a cup of coffee. Every so often when I went to pay, the cashier would refuse my money. She’d just say, “It’s on the house. Have a great day, Brian.” Everyone knew I was a regular; so every few weeks they would give me a free coffee or a free meal. This owner and his staff understood the value of repeat customers. And that, my friends, is what Dunkin’ Donuts has managed to do on a national level with their new Dunkin’ Donuts Perks loyalty program. They’ve mastered the art of engaging and rewarding their customers through their new killer app and the promotions and experiences they’ve wrapped around it: buy coffee; get free coffee at some point. As a senior executive with many years of experience in the digital space, I know there’s some algorithm behind it, but I haven’t bothered to review the code because, honestly, it doesn’t matter.

Every few days I get a coupon on my receipt for a free coffee. And this same reward / coupon goes to my phone inside the Dunkin’ Donuts app under “Perks.” Simple! So I stay loyal to Dunkin’ Donuts and get compensated in a way that makes me feel special. I even get rewarded with a twenty-five cent cup of Joe the day after the New York Jets or New York Giants win a football game. Which means they’ve now bonded with me over something meaningful in my world.

I’m not here to tell you how great Dunkin’ is, or how wonderfully their marketing team executes loyalty programs. Wait, actually I am! The app is solid and looks awesome. And trust me, having been part of a team that built one, I know exactly how hard it can be to keep an app stable and looking good on iOS. Great job, Dunkin’ Donuts!

Is Dunkin’ Donuts brilliant, or are other retailers simply careless?

How is it that in 2016 Dunkin’ Donuts is the only retail app that I use, even though my monthly tab is $60.00 at best? I spend more money at gas stations, at grocery stores. To be brand-specific, I spend more money at CVS. But their app isn’t on my phone, and I certainly don’t use a CVS credit card to pay for my purchases.

Perhaps there are all kinds of loyal CVS Extra Care customers out there. But I doubt it, and I can tell you one reason why. Their two-mile long receipts. What’s up with those receipts? There are whole Twitter accounts and memes dedicated to trashing them, not to mention their annoying coupons that expire in three days! Here’s how CVS’s “loyalty” program seems to work:

  • CVS gives me an Exxon oil-spill receipt.
  • They then want me to put it in my pocket and save it. (Who has the space in their purse or wallet for a gigantic receipt?)
  • Then they expect me to take the time to examine it and clip the coupons that matter to me.
  • Then I should dial up Siri to have her remind me to rush back to CVS in 72 hours.

All this to save $4.00 on my next purchase of two bottles of Zest body wash soap, which I don’t use or need.

Being a CVS Extra Care customer feels like a one-way street because I’m being forced back into the store when they want me to return. It seems like they just want my data in return for useless coupons that self-destruct in three days. Veteran digital marketer that I am, I can tell you that this is NOT the way to win prospects and influence customers.

CVS mobile app screen captureCVS is not the only oblivious retailer out there. Meet GNC and Barnes & Noble.

It’s a mystery why more companies haven’t been able to execute an effective program like Dunkin’s, even though some appear to be trying.

Every once in awhile I’ll use SMS (texting) to get a 20% coupon from Bed Bath and Beyond, but outside of that I’m typically just giving someone my phone number during checkout. Grocery stores, CVS, and Panera Bread all look up my loyalty program info after I give them my phone number to make sure I get the best prices. And then there’s GNC and Barnes and Noble.

GNC needs my phone number so that I can think I’m saving money with their Gold Card loyalty program, which costs me $15.00 per year. I’m not sure how they convince me every time I come in to buy this card. And by the time I come back, it seems I always need to renew it. Hmmmmm.

Which reminds me of Barnes and Noble. (Deep sigh.) Now here is a company with its head in the sand! The ONLY time I go into Barnes and Noble is to buy a last-minute gift. And then I refuse to pay their full price as I’m in line looking on my phone on Amazon or at the same book for 50% less. They also make you pay for a Barnes and Noble loyalty card! So, B&N and GNC are punishing me for wanting to be their friend.

Loyalty programs should feel good, not like a forced relationship. Acme grocery stores and Adams Farms (a local grocer) don’t force their customers into a loyalty program to get the best price. And although I sincerely appreciate that, I would also like to be rewarded for my allegiance. I want to feel good about supporting a business, the same way I feel when I support brands like Patagonia or Subaru. I’m not comparing these companies to the United Way or the Red Cross, mind you. I’m comparing them to other “for profit” organizations where I choose to spend my money.

I don’t care if the company is local or national. I want to feel good about where I spend my money; and I would like to be rewarded for my loyalty.

Wouldn’t you?


Brian is the owner and CEO of Backbay Ventures. This article was originally posted on LinkedIn on February 8, 2016.

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