For Dunkin' Donuts' David Tryder, Card-in-Hand Equals Brand
Automatic balance refills and $2 perks for Dunkin' Donuts Card holders are helping the Canton, Mass.-based company's cup runneth over. While the privately held coffee purveyor is keeping a tight lid on proprietary information, an official revealed that these cards are an important aspect of its direct marketing strategy.
David Tryder, manager of interactive and relationship marketing for Dunkin' Donuts, says the company that serves nearly 1 billion cups of brewed coffee each year hopes to grow its cardholder base. Introduced in 2003, the gift card has experienced double-digit percentage sales increases and has evolved to be a multichannel experience for the cardholder, encompassing e-mail, online and in-store interactions.
Target Marketing: How well did the Dunkin' Donuts Card perform for you during the 2008 winter holidays?
David Tryder: We had a pretty good holiday season. We expected that it was going to be tough because of the economy. So we had taken a look at what the industry was forecasting for [quick-service restaurants] as well as for the gift card industry, in general, and realigned our forecast of what we thought we were going to do during the holiday. And we actually came in right about smack dab on the forecast of what we thought we were going to do.
TM: Of those gift card recipients, what percentage chose to reload them?
DT: We've got a very active reload program. In fact, one of the promotions we ran in the postholiday period was incenting customers to reload their card. So we offered customers a $2 bonus if they reloaded their card for $15 or more. ... We have customers coming in multiple times a week, which makes us different from most other gift card issuers. So reload's an important piece of the program, and we put a lot of emphasis on it throughout the year.
TM: What direct marketing tactics are you using to lure cardholders back to Dunkin' Donuts?
DT: Primarily, what we use is e-mail. So you can register a Dunkin' Donuts Card online at DunkinDonuts.com, and when you do that you can also opt in to be part of our Dunkin' Perks program, which is our communications program that we have with customers to give them special offers, inside news, stuff going on in their market, etc. So when somebody registers a Dunkin' Card and enrolls in the Perks program, we use the Perks e-mail communication process to talk to them about recharge and auto-recharge, etc. ... If a customer has a registered Dunkin' Donuts Card, we will specially message people that we know that have a card. You can certainly enroll in the Perks program without a card. But customers who have a card are, from time to time, given special offers, special promotions, etc., that are targeted directly to those folks because they have cards.
TM: Where do you see the Dunkin' Donuts Card program heading in terms of continued direct marketing efforts with cardholders?
DT: We're going to continue to grow the program. The card business is very good for us, so we'll continue to put emphasis and focus on it. We'll continue to run multiple promotions throughout the year, to sell more cards and to get more people to set them up for recharge and auto-recharge, which is of particular interest to us—the opportunity for folks to automatically have money loaded onto the card takes all of the worry out of it for them. ... There's still a lot more growth out there that we think that we can drive through that program.
TM: Do you believe you are in the majority of retailers in terms of using gift cards as a continuing relationship builder?
DT: I wouldn't say we're in the majority, no. I don't see most [companies] using it the way that we do. But I also think a lot of that is because we're in a very unique position. I mean, we have customers coming to us, in many cases, every single day for their morning coffee. ... And the card is a great vehicle. It has branding on it, so you've basically got Dunkin' in your pocket for your everyday purchasing. ... That dynamic isn't necessarily true for all of the different gift card issuers that are out there; which I think, therefore, gives us the opportunity to have that relationship-building aspect [and] be a little bit richer, a little bit deeper. We can get a little bit more creative, from a marketing perspective, about the way that we attack it and use it as a relationship-building tool.