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Karmarama

Core disciplines: CRM/Customer engagement, Digital, Integrated marketing

 

Costa

Developing a large, complex CRM programme

 

The Challenge

After helping take Costa to No.1 in the UK market with a new brand proposition, we were then tasked with reflecting this ambition in their Coffee Club of 4m members.

Under increasing pressure from retailers like McDonalds and Greggs as well as the new wave of indie coffee shops, Costa needed to overhaul its loyalty programme to build brand preference and drive incremental revenue in this increasingly crowded market.

With 47% of transactions made on a Costa Coffee Club card, it was key for cardholders’ communications to convey the same passion that customers receive in-store and see in our advertising. Our Connected Creativity planning approach was central to transforming the programme from newsletters and points statements to a rewarding and authentic Costa experience at every touchpoint, personalised to every coffee drinker..

 

 

How we helped do the right thing

We  first helped Costa align its loyalty programme to the business’s objectives, devising a suite of contact strategies designed to drive up purchase frequency, as well as triggered Re-Activation, Lapsing and Active communications targeting content to specific individuals. 

The Coffee Club became focused on customer insight generation, feeding live info back into our data analysis team to continually optimise the programme and learn more about Costa’s customers. 

We integrated the eCRM with our social activity, allowing members to receive personalised content around purchase behaviour, lifecycle segment and geo-location.

With Costa’s top 1% of spenders representing £1.25m to the business, we wanted to reward them and encourage trial, as well as reduce their propensity to churn. The average annual spend on a Costa club card is £60, however this ranges up to a staggering £4,482 per customer, so the value in their most loyal members was clear.

We launched our Old Paradise Street blend exclusively to our VIP club members with a suite of comms including a high-value direct mail piece and product launch pack for baristas. Using Club Card data, we were also able to personalise email messaging based on their purchase behaviour, from ‘connoisseurs’ through to ‘occassionals’.
 

 

 

Success

Reduced churn by 15%
100% increase in new blend, with a 70% redemption rate
68% of purchases were made on a Club Card, 44% higher than the control who had not seen the emails
ROI of £11.59:1

Overall, our loyalty programme delivered £1.2m incremental revenue per month - an increase of 523% since we began working with them, which generated an ROI of £17:1.

 

 

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