How Will Dunkin’ Gain From Its Partnership With Salesforce?

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DNKN: Dunkin' Brands Group logo
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Dunkin' Brands Group

This month, Salesforce (NYSE:CRM) announced that Dunkin’ Brands (NASDAQ:DNKN) adopted the former’s offerings to connect better with its customers and increase the effectiveness and adoption of its loyalty program – DD Perks. [1] The move is expected to add significant value to the customer adaptability of Dunkin’, whose loyalty program trails Starbucks’ loyalty program, both in terms of adaptability and effectiveness. The successful implementation of this program will aid the company gain a significant chunk of loyal customers, that will positively impact the company in the long run by driving traffic.

How Does DD Perks Work?

At the onset of 2014, Dunkin’ Brands announced a new loyalty program, called DD Perks. It decided to adopt a point-based system, where for every dollar that the customer spends, he receives five points. After accumulating 200 points or spending $40, the customer is eligible for a free medium beverage. DD Perks members also receive a free coupon and any-size beverage upon enrollment and on their birthday. Additionally, throughout the year, DD Perks members receive exclusive, personalized, special offers to earn bonus points for specific food and beverage purchases. Another incentive that the members of the loyalty program have is the option to cut the line in stores and go straight to pick up their items at a designated area.

Why Choose DD Perks?

In addition to offering free beverages, DD Perks takes personalization to a whole new level, as its app adjusts based on members’ preferences and transaction history, driving user growth. Further, the app allows the user to pay via multiple payment options, making it easier to buy Dunkin’ Donuts products and giving out reward points to customers.

ddperks

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In the first quarter of 2016, the number of DD Perks members increased more than 150% year-over-year to 4.6 million. In August of 2016, Dunkin’ announced that it has reached the 5 million member milestone as a part of its DD perks reward program. This was post the change in Starbucks’ loyalty program to one based on amount-spent, rather than frequency of visits. This was also the quarter in which Starbucks saw its comparable sales in the U.S. coming in much lower than anticipated, leading many to predict that the best times were behind the company. Taking advantage of the change at Starbucks and disenchantment of many Starbucks customers, Dunkin’ pulled out all stops to advertise its own loyalty program. The company expects their numbers to continue growing for the remainder of this year as its partnership with Salesforce bears fruit.

On The Go Ordering

To complement their existing rewards program, the donut and coffee chain introduced On-the-Go Ordering in June 2016. On-the-Go Ordering allows DD Perks members to place a mobile order up to 24 hours in advance, select their desired location, and then simply confirm via the new Dunkin’ Donuts mobile app when they are ready to pick up their order inside the restaurant, or at the drive-thru.

The app, due to its friendly interface and usability, has gained traction among Dunkin’ customers, resulting in over 16 million downloads since its inception in 2012.

How Does The Partnership With Salesforce Fit In?

Per the latest Brand Keys Customer Loyalty Index report, Dunkin’ continues to set pace for the 10th consecutive year in customer loyalty and engagement in the out-of-home coffee category. In order to sustain its upward trajectory, the company has turned to Salesforce, a leader in CRM tools. The partnership with Salesforce will help Dunkin’ augment its customer engagement initiatives and streamline its processes, to effectively make the company more customer-centric. Further, the collaboration is expected to help the company to extend its personalized, one-to-one customer experience across digital channels, while also empowering its employees to work from anywhere, run their business from their phones, and streamline internal processes.

Using Salesforce’s Marketing Cloud, Dunkin’ Donuts is able to better analyze the customer’s journey in its loyalty journey and respond accordingly. With more than 5 million customers on-board its loyalty program, the company has successfully been able to tap into its customer base and further educate its customers about the benefits of the program and how to effectively utilize them. Furthermore, due to Salesforce’s expertise in providing solutions that engage users across all platforms – web, on-premise, and mobile –  Dunkin’s mobile platform has seen greater adaptability and has successfully attracted its customers on to its mobile app offerings.. This is evident from the fact that Dunkin’s mobile app, launched in 2012, has been downloaded more than 16 million times. Additionally, with the company planning to send more than 700 million mails to its users, the adaption of Salesforce’s Marketing Cloud will only enhance the effectiveness of the mails in reaching out to its target audience.

The upgraded and more effective loyalty program from Dunkin’ positions it well to challenge the monopoly of Starbucks in the coffee market. While it remains to be seen how much value will be added to Dunkin’ post this partnership, with the third quarter results indicating weakness in comparables and traffic, Dunkin’s dependance on its app and loyalty program is bound to see an increase.

Notes:
  1. Dunkin’ Donuts Strengthens Customer Loyalty Using Salesforce, Salesforce Investor Relations, October 6 2016 []