Coffee Culture: Costa Coffee loyalty scheme generates an extra £1.2m each month

A revamped digital customer loyalty programme from Costa Coffee has generated an extra £1.2m in incremental profit each month since its launch this time last year.

Marketing agency M&C Saatchi and Pablo London began revamping the high street chain’s 11-year-old Costa Coffee Club loyalty programme this time last year. The new loyalty programme saw the points-based system being ditched and replaced with a ‘frictionless’ digital scheme which gave customers a free drink for every eight cups purchased and a slice of cake on their birthday.

Since the relaunch, Costa Coffee has seen total transactions grow by an impressive 16%, generating an extra £1.2m in incremental profit each month

“We can see that the increased simplicity and generosity of the revised proposition is returning a large incremental profit each month,” said M&C Saatchi London’s chief data strategy officer James Calvert.

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Customers claiming their free coffee now account for 8% of all transactions, with 23% of transactions logged through the loyalty app; double the engagement rate of Costa’s previous free drink initiative.

Offering members a free slice of birthday cake has significantly boosted sales, with 60% of customers buying something else as part of the same transaction. One in 10 loyalty members redeemed their cake and 71% returned to Costa within a month.

Customers using a reusable cup can claim their free coffee after just four drinks, a move which is seeing them “visiting more frequently and spending more heavily”, according to Calvert.

Calvert also believes that generous loyalty schemes can generate healthy return, as the increased appeal of the new loyalty proposition has helped “grow week-on-week” new registrations and “accelerated sign-ups to pre-pandemic levels.”

Over 70% of Costa Coffee Club transactions are now made via the updated app, which has a rewards page, a click-and-collect function and allows users to purchase gift vouchers.

Marketing StrategyNews

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