"Mobile is devouring the world," said Mr. Costello, who helped
Dunkin' come to the decision to shift its loyalty program to become
mobile-centric. Mr. Costello is also chairman of the Mobile
Marketing Association's global board of directors.
Ad Age discussed the motives behind the move to mobile loyalty,
and the challenges that lie ahead for the 65-year-old
Massachusetts-based morning fuel hub.
Ad Age: When Dunkin' Donuts decided to put its paper-
and web-based loyalty program on hold in order to revamp it as a
mobile-centric program, what factors went into making that
decision? Were some executives concerned it was too big a risk to
take?
Mr. Costello: We decided to re-focus the
loyalty program as a mobile-centric program because the world is
changing rapidly and mobile devices are evolving from smartphones
to a remote control for your life. The key factors that drove the
decision to focus our efforts on developing a mobile-centric
program were ensuring that the DD Perks loyalty program was
customer-focused, fast and enhanced the in-store environment.
It was a big risk to invest millions of dollars to develop a
world-class mobile app, which is the foundation of our successful
DD Perks program. Even though our business was doing well, we
forced ourselves to change and adopt new technologies without
knowing if it would work. This was a cross-functional decision that
included members from marketing, IT, operations and our
franchisees.
Ad Age: Connecting a branded app experience to the
in-store experience in a relevant and relatively seamless way is
easier said than done. How has Dunkin' Donuts done that and what
does it need to work on?
Mr. Costello: "America Runs on Dunkin'" is more
than a slogan; it's really our brand purpose which is to help get
you running in the morning and keep you running all day long. As a
result, speed of service is very important to the Dunkin' customer,
particularly in the morning. We needed to build a loyalty program
that is very fast both in-store and at the drive-thru because a
significant portion of our business is at the drive-thru. We did a
lot of operational testing at the store level with our franchisees
to make sure that the DD Perks program is customer friendly, very
fast and did not overcomplicate in-store operations. The second
thing we did is form a cross-functional task force that included
members from marketing, IT, operations, training and franchisees to
make sure that we had the right training in place for our store
employees and ongoing training as we introduce new features.
Both DD Perks and the Dunkin' Mobile App are easy to use and fit
seamlessly into our guests' Dunkin' Donuts experience and daily
routine. We made it simple for guests to enroll cards already in
their DD Mobile App into the loyalty program.The combination of
customer focus, constant learning and the close tie to the in-store
environment all contribute to the success we are seeing, and the
program will continue to evolve as we receive consumer and
franchisee feedback.
Ad Age: You seem to believe mobile is really important
from a data standpoint. Why?
Mr. Costello: We actually make efforts to
minimize how much data we collect from customers, and use it only
for the purpose of improving our customer service experience. For
this purpose, the data we collect is extremely important and
beneficial. For example, we've been able to use data to promote
localized offers through the Dunkin' Mobile App. Consumers have
responded very well to these localized offers and when we launched
the DD Perks program, we started to target our guests with valuable
offers right away to drive incremental spend and visits. This
targeting will become more refined as we continue to test new
methods and analyze the data looking at how each guest is
behaving.
As a result of our investment in technology initiatives, today
we have more robust data on our guests' transactions than we have
ever had in the past and we're using it to change guests' behavior.
We are able to track our guests' behavior and engage with them on a
one-to-one, individualized basis. We have created members segments
for our DD Perks members and we are now targeting our members with
offers relevant to both their segmentation and their individual
behavior.
Ad Age: Nearly 3 million people are members of the DD
Perks program but 11 million have downloaded the app. Surely you'd
like all of the people who have downloaded the app to join the
loyalty program. Where's the disconnect and how do you plan to
change that?
Mr. Costello: We recognize that there is zero
barrier to download the Dunkin' Mobile App and to enroll in the DD
Perks loyalty program you must purchase a DD Card. This is the
barrier and we do look to close the gap. The DD Perks program will
be an important driver of long-term growth for Dunkin' Donuts and
we are pleased with our current progress.
