Dive Brief:
- Philz Coffee is launching a points-based loyalty program connected to its app in response to consumer clamor for the brand to add a rewards system, according to a Wednesday press release.
- The core of the program is a simple points-based program, with consumers earning 10 points for every dollar spent. Consumers can redeem 1,200 points for a drink of their choice, including all sizes and customizations.
- The addition of the program comes about two months after Philz was acquired by private equity firm Freeman Spogli, which said it did not plan store closures or layoffs. A new loyalty system could help Philz attract repeat consumers and incentivize specific behaviors.
Dive Insight:
Consumer price sensitivity has made loyalty programs important traffic drivers for many brands, and a number of mid-sized chains have reworked or debuted points-based programs in recent months.
To find the effective discount offered by the core program, Restaurant Dive arbitrarily chose a Philz location in California. At this store, many of Philz’s drinks, other than black coffee, started out at around $5.90 for a small and ranged up to about $7.10 for a large.The 1,200-loyalty point redemption cost works out to a 4.9% to 5.9% discount rate — roughly comparable to the discounts offered on drinks through Dunkin’s loyalty program.
The program features other rewards perks — such as birthday rewards and occasional surprises, like double points periods or free pastries — that layer on top of the points-based core.
Philz’s app and rewards program includes a number of personalized features the brand says are intended to increase consumer connection.
“With each reward, customers can still customize their cup, their way. Customers can now also send ‘positive vibe’ emojis to their barista through the app, whose name and photo still appear with every order,” according to the press release.
When Freeman Spogli bought the brand back in August, the private equity firm said it wanted Philz’s brand identity and operations to stay the same. The firm said it would retain Philz’s leadership.
Other brands are adding or reworking their loyalty programs this year. Krystal launched a points-based program earlier this month. Cava, last week, added new tiers to its program in an effort to drive consumer frequency. At the end of September, Jimmy John’s announced it was switching over to a points-based system.
