Unique Rewards Card Label Brews Up Brand Loyalty and Specialty Coffee...

HAVI helped a quick-service restaurant (QSR) chain that wanted to implement a frequency program that would reward customers who regularly purchase its coffee without negatively impacting operations. HAVI designed an innovative rewards card label, enabling them to launch a regional customer frequency program that appeals to consumers and significantly boosts sales. 

CASE STUDY FOCUS: PACKAGING DESIGN, PROMOTIONAL PACKAGING

Unique Rewards Card Label Brews Up Brand Loyalty and Specialty Coffee Sales for Restaurant Chain During Regional Promotion

HAVI designs an innovative rewards card label for a quick service restaurant (QSR) chain. Company re-conceptualizes a proven promotion tactic and streamlines operations and execution in the restaurant, enabling the QSR to launch a regional customer frequency program that appeals to consumers and significantly boosts sales of the chain’s specialty coffees.

 

Challenge

A leading QSR chain wanted to implement a frequency program that would reward customers who regularly purchase its coffees without negatively impacting operations. The objective was to increase frequency of purchases and introduce customers to higher margin specialty coffee drinks. The challenge would be developing a tactic that worked operationally at the QSR chain’s retail locations. Seventy percent of the chain’s transactions occur at the drive-thru window so the frequency tactic would need to be self-explanatory to customers. In addition, the tactic could not hinder the work of operators attempting to take menu orders and move customers through the queue.

 

Solution

The QSR chain sought help from HAVI, a global leader in packaging, supply chain services, marketing and supply chain analytics, merchandising planning and promotions management, and waste, recycling and sustainability. HAVI determined that a traditional punch card a customer handed to an operator to punch and return at the drive-thru window would not be efficient, and instead proposed putting a frequency tactic directly on the coffee cup.

HAVI worked closely with its manufacturers to develop a proprietary dry release rewards card label that would stick on the branded outer label of both hot and cold coffee cups and could be peeled off the cup and saved. Customers would peel currency in the form of a small sticker off the base label of each cup of coffee they purchased and place it on the back of the base label (frequency card) they had saved. Once they had collected five stickers, they could redeem the card for a free hot coffee beverage of their choice in any size.

The uniquely designed rewards card label fits different tapered hot and cold cup sizes and withstands heat and condensation. It did not crease and the cups could be nested and stacked without compromise to the label. The card label maintained its integrity whether stashed in a car cup holder or in a customer’s wallet and the currency stickers, once peeled off a cup and applied to the back of the card label, remained in place.

The QSR chose not to advertise the frequency program and provided minimal in-store merchandising to support it so all information customers would need to understand the program and how to use the card would need to be included on the label. HAVI conducted research and guest intercepts to gauge consumer response to the proposed labels and found an estimated 80 percent acceptance rate. Consumers said they understood how to use the rewards card label to participate in the program. Twenty percent of people who participated in the research and guest intercepts said they would participate in the frequency program and redeem against it.

After 18 months of development, the QSR chain launched the rewards card program in a single test market and saw a lift in coffee sales in that market. Subsequent frequency program market launches have generated an average sales gain of two to four percent for hot coffee beverages and three to six percent for cold coffee beverages. In one market where the program has been executed on an ongoing basis, the share of specialty coffees as a percentage of sales compared to total coffee sales is greater than the share observed in an average non-frequency program restaurant.

 

Benefits

  • Increased sales – Frequency programs have increased sales of hot coffee beverages by an average of two to four percent and sales of cold coffee beverages by an average of three to six percent.
  • Trials and trade-up sales – In one market where the program is executed on an ongoing basis, high redemption for specialty coffees demonstrate that the program is driving trial of coffee beverages and an increase in overall sales of specialty coffee drinks.
  • Innovative frequency program – The unique peel-off rewards card label and currency are intuitive to use and appealing to customers, driving participation and redemption with minimal operator disruption.
  • Quality assurance – The label is correctly positioned and always straight on every cup and there is minimal waste.