The New Meaning of Loyalty at Dunkin’ Brands

'Now the overall experience is the critical piece to loyalty'

Author: Tricia Carr

October 13, 2017

Some say that loyalty is dead, but in reality, the bar is higher than ever for consumers to stay devoted to a brand or retailer. 

Shoppers are looking for much more than coupons and rewards—they want a personalized experience across channels and an emotional connection with a brand. 

Dunkin’ Brands, with the help of data-driven marketing company Epsilon, has evolved its loyalty strategy as a result of shifting consumer expectations. Justin Unger, Dunkin’ Brands’ director of digital marketing and innovation, and Wayne Townsend, Epsilon’s president of technology, spoke with eMarketer’s Tricia Carr about what its loyalty program looks like now with the customer at the forefront.

eMarketer: Once and for all, is the loyalty program dead?

Wayne Townsend

Wayne Townsend: The notion of a rewards or incentive program that solves a problem by itself is dead. Now the overall experience is the critical piece to loyalty and is what triggers consumers to engage. While a rewards program by itself is fading away, it’s becoming an imperative as part of this larger experience.

Justin Unger: Yes, there's a difference between rewards and loyalty, and there’s a shift at Dunkin’ Brands from a pure value play to making it about the experience. Loyalty is not dead—in fact, it’s the opposite as we make loyalty more about the holistic experience and put the customer first.

“Loyalty is not dead—in fact, it’s the opposite as we make loyalty more about the holistic experience.”

eMarketer: What else differentiates a great loyalty strategy that keep customers hooked?

Townsend: One dimension is the experience. You can prove you’re listening to the customer by providing the experience they want, or rather than give everyone the same experience, you can personalize it. The other dimension is the emotional connection—when you know who the customer is. When the personalized experience and emotional connection come together, that makes a great loyalty strategy.

Justin Unger

Unger: It make a huge difference to listen to the customer. They are the ones who dictate what makes a great loyalty program and as long as we stay tuned in to our customers, we should continue to stay ahead.

eMarketer: It’s clearly important to make the customer feel like the experience is tailored just for them. Is the goal to be able to speak to that segment of one?

Unger: There’s much more emphasis placed on the segment of one now, and it’s not purely about order history or consumer-level data. Those might be the primary inputs, but it's also about finding other signals to speak to the segment of one, such as current weather or local sports—our "your team wins, you win" promotion, for example, taps into the fandom of local sports teams to drive engagement. We can add these other signals as an intelligence layer on top of consumer-level data to try to address that segment of one.

Townsend: As we expand this thinking around what we should know about customers, we’ll continue to get an even better understanding of who they are. For example, if a customer always goes to Dunkin’ in the morning but goes somewhere else for a hot drink in the evening, it would be interesting be able to leverage that knowledge to build a better relationship. There’s an infinite amount of work that we can do to keep moving down this path and continue to understand customers better.

“You can learn a lot about a customer, but that doesn't mean you know what they really want.”

eMarketer: What obstacles are hindering you from speaking to that segment of one?

Townsend: You can learn a lot about a customer, but that doesn't mean you know what they really want. You can't understand the implications until you test your way into them. Once you have a solution in place, it’s an exponential process to learn enough about a customer to be able to tell what actions will help them behave the way you want them to.

Unger: That's spot on. It’s not necessarily a data issue—the more data we have, the better. But it’s an interactive process as we learn more about customers and get more data inputs, layer them on top of marketing and advertising communications and run tests. That will provide learnings and allow us to optimize our approach. Just as we think we’re getting to an end point, we’ll get more data signals to layer on. It’ll be a continuous cycle to evolve our strategy.

eMarketer: What does loyalty look like in the future at Dunkin’ Brands?

Unger: The future for us lies in continued personalization. That means finding new data inputs, new customer-level trends that we can apply and new signals to make everything more contextually relevant, and to keep shifting from value to the experience.