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Are you being loyal to your customers?

loyaltyI love the concept of loyalty cards. I have a wad in my wallet and I make sure I use them religiously – saving money on something you’re going to buy anyway is a no-brainer. However, it’s important for both the customer and the vendor that the mechanics of the loyalty card are carefully considered. A loyalty card implies that, if the customer is loyal to the company, the company repays that loyalty  to the customer in a clearly defined and consistent way. It’s this consistency which is sometimes lacking.

Vida e Caffè is a great example of a company that gets this right. They have a clear and consistent loyalty program – swipe your card for any purchase and and get 5% of that purchase back, which can be used towards any future purchase. Simple. All you need to do is remember to keep your card on you and swipe. (Incidentally, they also give you a free coffee during your birthday month – a nice touch.) In case you REALLY don’t understand how it works, they even explain everything clearly on their website.

Kauai on the other hand, is not simple or clear. Kauai has 2 separate loyalty programs, one for smoothies and one for coffee. Both of them give you a free beverage for every 12 beverages of that kind. (buy 12 smoothies and you get 1 smoothie free) Sounds simple enough. But wait, there’s more. To participate in the smoothie loyalty program, you need a blue smoothie card and you must collect blue smoothie stickers. If you want to join the coffee loyalty program, you take a brown card and collect brown stickers. 2 separate programs, 1 company, 1 customer. This is inconvenient and makes my wallet bulge a bit, but as a loyalty card fan, I’m willing to deal with it.  However, the devil is in the detail, and this is where the loyalty scheme falls apart.

I really like my coffee. A large Americano is my standard fare after gym at the Kauai while I start my day and catch up on emails. A large Americano is R2 more than the regular, but the extra caffeine fix I get is worth it. Sometimes I’ll splash out and also have a smoothie, usually a large Peanut Butter Bomb with the extra protein. Yummy. The large is R4 more than the standard.

Fast forward 12 coffees stickers and 12 smoothie stickers later. I’m at the counter gleefully about to redeem my cards for a free large Americano and a free large Peanut Butter Bomb but I’m told that isn’t the deal. Not so lucky. The free coffee is limited to a regular coffee. In fact, it’s a regular Americano, Cappuccino or Latte. Don’t even think about the flat white – that’s not included in the promotion! A similar restriction is placed on the free smoothie. These are limited not only to regular and medium sized smoothies (why both and not all I can’t understand), but also to specific smoothie categories, namely the “Fruit”, “Berry” and “Delight” smoothies. It completely excludes “Power” smoothies, the category my beloved Peanut Butter Bomb falls into!

Let’s do the math here. A Peanut Bomb is R45.90 while the most expensive free smoothie you can get  is R 29.90. So I’m only getting around 65% free of the value of what I have been spending. However, someone who only buys the cheapest smoothie at R 19,90 can redeem their smoothie card for a free medium smoothie worth R29,90, which is a massive 150% more than what they were spending! I wonder if Kauai has considered this in their budgeting?

The coffee situation is similar, but you can score, if you are willing to compromise. A large Americano is R17.90, while a regular is R15,90. If I want to stick to an Americano, I will only score about 88% of my free coffee, but if I’m willing to have a Latte or Cappuccino instead I get the full 100% free.

This system is neither simple to understand, nor fair to the the customer, who expects that if they buy 12 of an item, they should get one of those for free!

The bottom line here is that while I’m willing to be loyal to Kauai and buy the products that I like, they aren’t willing to reciprocate and be loyal to me. While other great companies have got it right and reward the customer loyalty based on actual financial spend, Kauai only rewards their customers on their quite specific terms. This makes the taste of the coffee quite bitter, and the Peanut Butter Bomb smoothie leaves my stomach grumbling with unhappiness.

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