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What led to the establishment of Customer loyalty program at Caribou coffee?

About Caribou Coffee

Caribou Coffee is the second-largest coffee chain in the U.S. with locations in Minnesota and 18 other states. It has approximately 480 coffeehouses across the States.

Idea and Implementation

Kathy Hollenhorst, Senior Vice President of Marketing who had helped Caribou establish license agreements with General Mills and Kemp’s Ice Cream examined what the company lacked compared to Starbucks, its main competitor. She concluded that client loyalty and loyalty programs were the key differentiators. 

Whereas other Caribou officials were concerned about implementing a complex system of points and awards throughout its 489 retail stores, Hollenhorst stuck to her beliefs and did not lose hope.

“You have to be willing to be laughed at and not take it personally. Pursuing innovation at today’s companies is like running a marathon at a sprint — it’s incredibly hard work that seems to go on forever.”Kathy Hollenhorst

It took more than a year of presentations and research, but eventually, Hollenhorst convinced the company to test the customer loyalty program at a handful of locations. Moreover, instead of repeating the same mantra over and over, Hollenhorst used that time to fine-tune the project and added an element that complements the company’s friendly, Midwestern philosophy of “surprise and delight.” 

Cash registers used a variable messaging program to prompt random rewards. “It pops a message up on the screen when a person makes a purchase, randomly selecting them for a nice surprise — a bigger drink, a free muffin.” The company implemented the program at a bigger stage by late 2008. 

The idea of establishing a loyalty program resulted in increased customer loyalty and helped caribou gain more customers and increased profits. Encouraging employees to ideate and innovate often leads to increased profits, opening up new market segments, the ability to cut costs, and getting a greater ROI in business. 

Are your employees sharing their ideas too? Do you have the right medium to capture those ideas and take them right from ideation to implementation? If you answered NO to both these questions, you should read this next – You’re an idea management software away from becoming an innovation machine.

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