Peet’s Coffee was looking to expand its Peetnik Rewards loyalty program to all 240 stores following a beta test period, but needed a more reliable platform. By partnering with Paytronix, the chain got a more stable platform, along with a bonus: detailed data about program members’ activity, which has translated into valuable marketing insights and measurable benefits.
The chain moved its loyalty and stored value program to a SaaS platform from Paytronix. Within six months after a July 2017 chainwide rollout, Peet’s had achieved:
- 350% increase in Peetnik Rewards membership;
- 1.5% jump in retail comp store sales resulting from a top-performing offer;
- 47% increase in the percentage of overall transactions by loyalty program members (loyalty check penetration); and
- 47% of total gift card growth driven by Peetnik Rewards digital gift cards in 2017.
The new system enabled Peet’s to improve one-to-one engagement with customers and increase overall sales and revenue. For example, using a “check-in challenge” campaign, select customers were motivated to increase weekly visits, from three up to four or five times per week. As a result, Peet’s saw double-digit lifts in customer visits and spend that were sustained even after the campaign ended.
In a different campaign, a Paytronix feature that allows retailers to easily add factors to campaign analysis helped Peet’s gauge the impact of a cold brew offer. Peet’s could see the lift from the specific item, but executives also wanted to see if the entire category was lifting — not simply switching the same buyer from one specific menu item to another. Peet’s executives could log into the merchant interface and view the cross-menu item impact of the promotion.
Overall, the Paytronix solution has given the Peet’s team a deeper understanding of customer behavior. “Before Paytronix, Peet’s was guessing at offers and had minimal insight into its loyalty program performance,” said Lisa Regelman, Director, Loyalty, Peet’s Coffee. “Now, Peet’s tests and measures everything with control groups, and we talk with our team about how best to structure offers. We can see how frequently a customer comes in and what they like to buy, and target campaigns in a more one-to-one manner, based on their lifecycle stage and behavior.”
Platform Change Built Confidence For Program Expansion
Prior to the chainwide rollout of the new loyalty program, Peet’s ran beta tests in select markets. The old system had crashed frequently, and management feared that tech-savvy customers — especially in the company’s home base of San Francisco — would have a negative customer experience.
“For us, finding the right loyalty provider was key,” said Regelman in an interview with Retail TouchPoints. “We have a dedicated fan base of coffee lovers and we pride ourselves on offering first-rate customer service.”
The retailer assessed several major loyalty partners that were able to integrate with its current POS system, then selected the top candidates for a “bake off,” explained Regelman. Paytronix demonstrated expertise not only with its platform but also with the POS provider, and offered “a deep bench of experts to help us migrate and relaunch quickly,” she added.
Once the decision was made to go with Paytronix, Peet’s had to perform an overnight lift-and-move migration for its loyalty and gift card programs. The migration required:
- The design, build, test and deployment of new software across the Peet’s POS system;
- Backend enhancements to support new features;
- A new integration layer between Paytronix and the Peet’s content delivery platform (CDP); and
- New iOS and Android mobile apps.
How The Peetnik Program Works
Peetnik Rewards members earn one point per transaction, with opportunities for bonus points, and they receive a complimentary beverage of any size after earning 15 points. Other benefits include: a birthday beverage on the house, quicker checkout via their mobile devices, member exclusives and more.
The top-performing offer that drove the 1.5% retail comp sales lift “was one of the first times we offered Peetnik Rewards members triple points for a transaction versus our standard of one,” said Regelman. “The offer demonstrated the strength of our core value proposition and how points resonated with members.”
Data from its loyalty program has “reinforced how much our members love Peet’s, including how many come in nearly every day,” said Regelman. “Peet’s is an absolute ritual, both in visits as well as in what our members buy.”
Going forward, Peet’s is exploring online ordering as well as a new mobile app. “We are currently focused on ensuring that our latest version of the app delivers the best customer experience possible,” said Regelman.