Miss Java,
There are several distinct reasons why I contend this fails as a program, and each of these involves some basic understanding on the marketer's end (yours).
There are many loyalty and reward programs out there. Many are similar in their methodology leading to the "If it isn't broke, don't fix it." argument. But it's not the method of the program, it's the method of the data collection and what is the end result of that data--how is it used, how does it benefit your business.
Pretty pictures do not create a good program, and neither does the reaction of customers nor the friendliness of the seller (of the program). In fact, customer's "loving it" is either an indication of a successful gimmick, in which case the customer will abandon you as soon as another "catchier" gimmick comes along-- or, it is an indication of lack of positioning and/or quality and this "program" is the only thing the customer has to cling to and all the business can hang their hat on.
As a student of marketing (not a marketing student) I ran this same question and comment by Les Roka, (a Marketing P/R professional and former professor), and during our conversations, he echoes my thoughts in a much more thoughtful way and offers some of the following in his response.
Ask yourself these questions:
1) Where is the data that shows that customers would have been less loyal without this particular program vs. with it?
Les says, "As we high falutin' academics like to say, pay attention to causality and incrementality. Often, too many places overestimate the revenue impact because they failed to establish a connection between the program and measures of increased sales and customer satisfaction. So, the causality requirement means tracing clearly that link. Otherwise, not knowing what caused the behavioral change in customers is pretty much a useless exercise. How does one know how to improve the program then.
Incrementality is knowing whether the campaign is delivering the right outcomes. For a loyalty program to show real results, it must show that the results being measured are incrementally better than those generated without the program. Would the consumer have behaved the same way ( e.g., recommended your program) and driven similar benefits (e.g., attracted a new member) if he were not a member of the program?"
2) Are customers loyal to the program or loyal to the product?
Les says, "What matters is the RELATIONSHIP. Loyal customers don't look for discounts.They look for things that bring more value to the business-customer relationship ( e.g. first offerings).Neumeier suggests that if you continue to remain focused on the price/money pit, you will never be able to extrude yourself without major loss or costs.
Loyalty is not programmable. And most of the astute say that it never suffices as a long-term strategy."
Dr. Roka also points us to Marty Neumeier,
http://www.amazon.com/exec/obidos/s...pe=ss&index=books&field-author=Marty Neumeier
who offers this excerpt in his book.
"
"1) Loyalty programs are based on discounts, which 'train' existing customers to expect low prices and wait out normal prices, 2) They attract loyal customers who would happily pay a premium, 3) they discourage new customers by making them feel punished or excluded, 4) they encourage competitors to retaliate with me-too programs, 5) they reduce profit margins, which 6) reduces the company's ability to serve customers at formerly high levels.
The truth is, loyalty can't be programmed. As soon as customers begin to feel 'stalked,' they choose 'fight' or 'flight.' They either figure out how to game the system, or else they run to another brand.""
This particular program is more "gimmicky" than most, and from one professional to another I would think of your long term gameplan if this is the route you choose. These coffeecoins say a lot about positioning--none of it positive--and as you are establishing yourself in the marketplace, it's something to step back and think about as part of the Big Picture.
My cent.
