For many years, coffee loyalty programs were simple and straightforward: a punch or stamp card to reward regular customers for their repeat visits. This classic approach has served its purpose, but it’s just one of many options available to business owners today. As the competition in the coffee industry intensifies and customer expectations evolve, coffee shops are exploring new, more sophisticated loyalty models that go beyond the traditional punch card system.
With the rise of digital loyalty programs and the growing trend of personalization, coffee shops now have an opportunity to offer rewards that better align with their customers’ behaviors and preferences. From points-based systems to mobile app integrations, coffee shops can create a more engaging experience that not only encourages repeat business but also deepens customer relationships.
But with so many different models to choose from, how do coffee shops decide which loyalty program will be most effective? Let’s dive into some of the popular options and examine which ones are making a real impact in the industry.
Punch Cards
Punch cards are a time-tested, classic coffee loyalty program option —and they remain popular for good reason. Simple, cost-effective, and easy to implement, punch cards are an excellent choice for cafes that want to reward regular customers without the complexity of digital systems.
Take Cafe Domestique in Madison, Wisconsin, as an example. They put a unique spin on the traditional “buy 10, get one free” system by rewarding customers with a punch for each drink they get in a reusable cup. This includes both ceramic and glass cups for drinks enjoyed on-site and travel mugs or HuskeeSwap cups for to-go orders. When a customer reaches ten punches, they earn a free drink.
Owner Dan Coppola says this idea had been brewing since 2016, but it wasn’t until after the pandemic that he felt confident enough to implement the program. The results have been impressive: Cafe Domestique is on track to redeem 1,500 punch cards this year, which has helped prevent over 15,000 disposable cups, lids, and coffee sleeves from ending up in landfills. The program has not only rewarded loyal customers with free drinks but has also encouraged them to make a positive environmental impact by using reusable cups.
“We didn’t set out to create a program that would make customers choose us over other coffee shops,” says Coppola. “Instead, we wanted to encourage customers to think about how they take their coffee and help reduce waste.”
However, punch cards do come with some limitations. The primary drawback is the lack of customer data. Unlike digital loyalty systems, which track individual preferences and buying behaviors, punch cards only provide basic information about how often a customer visits. This absence of detailed insights means cafes miss out on opportunities to personalize promotions or understand consumer habits more deeply.
Despite these limitations, punch cards remain a popular and effective choice for cafes seeking a straightforward and affordable way to build customer loyalty. While they may not provide the rich data of digital systems, they still offer businesses a simple and low-tech way to engage with their customers.
Banked Points
Banked points loyalty programs are gaining popularity, especially as Point of Sale (POS) platforms like SumUp integrate loyalty features directly into their systems. These programs usually follow a simple 1:1 points structure, where customers earn one loyalty point for every $1 spent. The idea is to reward repeat customers in a seamless manner, with the added benefit of easily redeeming points for free drinks, discounts, or other rewards once a customer hits a certain points threshold.
The simplicity of a banked points system is one of its main strengths. Customers can easily track their points, making it straightforward to understand how close they are to earning a reward. This visibility creates a sense of progression, motivating customers to return more frequently as they accumulate points toward their next reward.
For cafes, implementing a banked points system is relatively easy, and the rewards structure is flexible. The real challenge lies in ensuring that the rewards offered are compelling enough to keep customers engaged. If the rewards feel too far out of reach or lack value, customers may lose interest.
Ultimately, the real appeal for business owners is the customer insights gained through the program. Loyalty data helps businesses understand buying habits, track customer preferences, and create targeted promotions that can encourage customers to visit more often or spend more during each visit. This system creates a win-win scenario for both the customer and the business, making it a highly effective option for building long-term loyalty.
Fee-Based Coffee Loyalty Programs
An alternative to traditional point-based systems is the fee-based loyalty program, like the one offered by Blank Street Coffee. Their Regulars program is a subscription model where customers pay a weekly fee (either $8.99 or $17.99, depending on the plan) to unlock a variety of perks.
The lower-tier subscription provides discounts on basic items like tea, drip coffee, and Americanos, while the higher-tier plan includes access to more premium items such as cold brews and specialty drinks. This model is particularly appealing to dedicated coffee enthusiasts who visit frequently and are willing to pay a little more for consistent perks.
One of the major advantages of fee-based coffee loyalty programs is that they allow businesses to offer exclusive rewards that might otherwise be too expensive to provide, such as discounts on premium items or more elaborate perks. However, the membership fee can also limit participation, as some customers might be hesitant to pay upfront without knowing the full value they’ll receive in return. Once customers have paid for membership, businesses must ensure they are consistently delivering the promised rewards to maintain customer satisfaction and engagement. Striking the right balance between the membership cost and the rewards offered is crucial for success.
Blank Street Coffee’s Regulars program has seen tremendous interest, with a 4,000-person waitlist for new members, demonstrating that the concept resonates with a wide customer base. This shows that fee-based models, while requiring careful consideration, can be highly successful for businesses that can consistently offer valuable rewards.
Finding What Works for Your Coffee Shop
For new coffee shops and roasters, navigating the world of coffee loyalty programs can be overwhelming. However, it doesn’t have to be overly complicated. Schneider from Fire Department Coffee suggests starting with a simple approach: “Tap into groups of other coffee shop owners to see what tactics they’re using. Surround yourself with people doing similar things and who may be willing to share their experiences.”
Experimentation is also key in finding the right coffee loyalty programs for your business. What works for one coffee shop may not necessarily work for another, so it’s important to be open to trying different approaches and learning along the way. Schneider encourages business owners not to be afraid of trial and error: “Whether it’s through social media, in-person interactions, or email marketing, the goal is to find what clicks with customers and fine-tune the approach over time.”
The right loyalty program should not only engage customers but also create a lasting, mutually beneficial relationship that drives repeat business and customer satisfaction. Whether it’s a punch card, banked points, or a fee-based model, experimenting with different strategies can help coffee shops discover the best way to reward and retain their loyal customers.
