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February 2, 2013

Dunkin’ Donuts to Launch Loyalty Program

by erikamaguire

On January 31, Dunkin’ Donuts announced that it would be launching its own loyalty program later this year. Although the company has offered several loyalty programs in the past, all of them have been unsuccessful and unable to drive growth. However, as Dunkin’ Donuts Chief Executive, Nigel Travis, explained, this new loyalty program will be more “robust” and “focused on driving changes in consumer behavior in frequency, ticket, loyalty and how they pay” (WSJ).

As we discussed in class last week, loyalty programs have become very popular among retailers, and many have seen enormous success. For instance, Starbucks now “does about a quarter of all its U.S. sales via loyalty cards,” and Panera has more than “12 million customers” registered for its own program (WSJ).

Although loyalty programs appeal to the budget-conscious customers with their customized offers and discounts, they also greatly benefit businesses who can then collect data from consumers.

While loyalty programs aren’t anything new, I found Dunkin’ Donut’s program to be especially interesting because the company plans for the program to be “compatible with its new mobile app,” which allows customers to pay using their smartphones (WSJ). Thus as it appears, not only is Dunkin’ Donuts capitalizing on the increasing number of cost-conscious consumers, but they are also taking advantage of the opportunities smartphone apps provide.

By offering a loyalty program that is tied with consumer’s mobile apps, the company can begin to build up more detailed profiles on individual customers, which the company can then use to alter its product offerings.

I believe Dunkin’ Donuts is making a smart move by creating its own loyalty program and it will be interesting to see whether this particular program succeeds and is embraced by consumers.


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