Category Growth through Customer Disloyalty

417CoffeeDisloyaltyCardNew technology has enabled food companies to create aggressive and successful customer loyalty programs, from the grocery programs we’re all familiar with to the new Starbucks mobile app, which facilitates brand loyalty through convenience. The value of loyalty to food companies is obvious: loyal customers equal consistent sales.

A recent post by eminent coffee roaster and barista James Freeman, however, raises the question of whether there’s some value to customer disloyalty. In discussing the growth of specialty coffee on his home turf of London, Freeman proposes that new cafes shouldn’t just aim to steal customers from other specialty coffee companies, but should strive to make new customers and strengthen category growth for specialty coffee. Since specialty coffee is still an industry in its infancy, Freeman argues that “Creating our customers, and not just stealing them from competitors, is vital for our industry’s longevity.” In short, it’s not a recipe for growth for companies to focus on stealing customers from a vanishingly small pool when what they really need is a larger pool of customers for their industry as a whole.

disloyaltyLondonIn that vein, Freeman points to the “Disloyalty Card” offered by one of the most prominent London cafes, which gives a free drink to customers who visit eight other London cafes within the specialty industry. It’s a clever twist on the well-known loyalty program, but one with no obvious, short-term payoff for the company making the offer. Instead, it’s an attempt to create new customers, and even more than that, to create the sort of informed, enthusiastic customers who are essential to a growing and up-market industry like specialty coffee. The London card was very popular, and has been recreated in Toronto in a more collaborative fashion, so although there’s no way to identify a specific ROI on the effort, as far as we can tell it’s been a success.

DisloyaltyCardJoeThe disloyalty program may be a counterintuitive marketing technique, but that alone makes it worth analyzing. In addition to being fresh and interesting for consumers, if done right, the disloyalty program could recruit new customers who wouldn’t have been open to entering your sales process before. By provoking interest and excitement, as well as offering a view of the many options available in your industry, the disloyalty program could be a useful tool for industries like specialty coffee where supply is in excess of demand.

At MarketPlace, we specialize in helping food companies develop original marketing strategies. Our “strategic creative” approach means that we don’t come to any project with a predetermined list of tactics—instead, we take the time to learn about your needs, and build marketing campaigns that address them. If your company needs marketing help to build your customer base or contribute to category growth, get in touch.

 

(Featured image courtesy of “Joe“)