5 Reasons Why Dunkin Donuts Ranks #1 in Loyalty

by Swipely Team on March, 11 2013 in Marketing


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For the fourth year in a row, and as they're already putting on their party hats to celebrate a 60th birthday, Dunkin' Donuts has won another award.

The very foundation of our business at Swipely emphasizes customer loyalty, and that's why we're so impressed that Dunkin' was able to pull off four consecutive years of being "number one in customer loyalty in the coffee category", according to the Brand Keys Customer Loyalty Engagement Index.

According to QSR, "in the coffee restaurant and packaged coffee categories, consumer preferences were based on consistently meeting customer expectations for taste, quality, service, and brand value." Robert Passikoff, founder and president of Brand Keys congratulated Dunkin' Donuts explaining their success as having "developed an extremely loyal fan base by creating real emotional engagement between their brand and the consumer."

Dunkin' Donuts' main competition is Starbucks (coffee) and Krispy Kreme (doughnuts) here in the United States. Starbucks recently launched a "blonde roast" which competes with Dunkin's everyday light, slightly sweet 100% Arabica bean brew, but Dunkin' has still won the battle in customer loyalty.

And that's well deserved, considering that their market penetration is slightly less than Starbucks, their largest competitor (around 17,003 stores). Krispy Kreme only has around 699 stores and Dunkin Donuts itself currently operates around 10,083 stores which includes all franchises.

So what makes customers of Dunkin' Donuts so loyal? Here's a bit of speculation and what small businesses can take from it.

1. DD is more affordable

The running joke about gourmet coffee shops is the $5 cup of coffee. In recent years Dunkin' Donuts has raised prices according to the cost of beans, but they still remain the most economical choice in the minds of drive-thru coffee lovers. Their price also supports the next few branding choices.

Small business lesson:

It's no secret that small businesses have to charge more than chains. That's why we need things like Small Business Saturday to raise awareness of how we struggle to make a profit while still paying the bills. However, price does place a big part in loyalty. The relief pitcher here is that if you can offer something unique and of high quality, you can get people to pay more without being upset about it.

The proof is that sellers on Etsy and Fab.com often charge hundreds of dollars for obscure thrift-store items that they bought for a few bucks If customers can't get the same thing somewhere else, then price isn't the issue.

One great example of getting this part right is Malachi's, a coffee spot in Providence, Rhode Island. I'm over the moon for their Monkey's Banana smoothie, but what I love most are their half-priced refills. No matter what they charge per cup, it will always sound more appealing with the option of a half-priced refill. This gives locals an excuse to come back for a second cup and maybe a sandwich later on. Their 4.5/5 star rating on Yelp shows that their customers are happy with the arrangement.

2. DD is more accessible

If you've ever been to a Dunkin' Donuts in the suburbs on a Sunday morning, you've witnesses twenty cars in the drive-thru line and an empty parking lot. Why? Convenience. Unless you're picking up breakfast sandwiches for the whole soccer team, Dunkin' Donuts is the to-go coffee place, and a major percent of their locations have a drive-thru.

Small business lesson:

Many people are loyal to Dunkin' Donuts because they can get in quickly and out just as quick. They don't usually have lofty couches (like Starbucks) or a fireplace (like Panera), but they do sometimes have double drive-thrus and a finely-tuned set of employees who crank through customers one at a time. This creates loyal customers because they can depend on keeping a schedule.

3. DD is more relatable

While some consider a coffee shop the destination in itself, the average Dunkin' Donuts customer considers it a pit-stop on the way to their way-more-important destination. Since 2007, the Dunkin Donuts tagline has been America Runs on Dunkin'. The message is that we all live busy lives and Dunkin' Donuts provides the simple and easy quick pick-me-up in between tasks. They don't want the suits, (Starbucks already has them), they want the much larger population of middle class people—the 99% if you will.

Small business lesson:

If you're not trying to relate to someone, then you're relating to no one. Starbucks is fine and profitable catering to $5 coffee-buying, wi-fi gobbling, couch-surfing college students and young adults. Dunkin' Donuts is happy to take a few bucks from just about anyone and say "see ya tomorrow!"

4. DD is non-exclusive

There's no order-anxiety at Dunkin' Donuts; everything is in plain english. For example, even though the Coffee Coolatta has been around for 15 years, they recently updated the packaging on their cups to read "Frozen Coffee Coolatta". They've taken shots at Starbucks for their less-than-obvious-jargon-filled ordering process, which to some feels like an exclusive club. Clearly, Dunkin' Donuts has a target audience: the guy/gal who just wants to get his/her coffee and get out.

Small business lesson:

Are you pushing away people who find it hard to place an order? There's always room for a "specials" board, but does every menu item need a pocket dictionary? Or are you plainly spelling out what's for sale, what's on the menu, and what's included?

5. DD is simple

Some people like a burger with ketchup and mustard and others want a veggie burger topped with mashed potatoes and truffle oil. Both sound oddly rewarding, but one is easier to order and less risky. By sticking with the classics, Dunkin' Donuts can get the right order to the right customer in the right amount of time.

Small business lesson:

I recently read an online review of a local cafe that read: "How is the system still NOT figured out here? I mean the ordering (where's the line? which register? both?), the paying, the getting food to your table, the awkward coffee station, the having to ask for napkins on request only. You know... THE SYSTEM. That thing that holds everything together, the thing that's supposed to be the invisible hand that moves it all along so intuitively that the customer doesn't even know it's there." Is your system invisible and intuitive, or is it obvious and janky?

John Costello, Chief Global Customer and Marketing Officer at Dunkin' Brands concludes, "we are thrilled to have earned the top ranking for customer loyalty four years running, and look forward to continuing to provide our guests with simple, delicious, affordable food and beverages."

Image courtesy of Dunkin Donuts

Not ranked #1 in loyalty yet? Maybe next year!
Learn about Swipely's loyalty program

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