Costa toasts loyalty revamp for £1.2m monthly boost

Costa Coffee has hailed the revamp of its digital customer loyalty programme, claiming the move has generated an extra £1.2m in incremental profit each month since its launch a year ago.

M&C Saatchi and Pablo London were handed the revamp in September last year, which saw the points-based system replaced with a digital scheme which gives customers a free drink for every eight cups purchased and a slice of cake on their birthday.

The move also followed the appointment of the Coca-Cola-owned firm’s first global head of consumer data and digital analytics, Ed Child, the former Asda and Walmart insight and analytics chief.

Since the relaunch, Costa Coffee has seen total transactions grow by a 16%, generating an extra £1.2m in incremental profit each month.

Customers claiming their free coffee now account for 8% of all transactions, with 23% of transactions logged through the loyalty app; double the engagement rate of Costa’s previous free drink initiative.

Giving members a free slice of birthday cake has also boosted sales, with 60% of customers buying something else as part of the same transaction. One in 10 loyalty members redeemed their cake and 71% returned to Costa within a month.

Meanwhile, over 70% of Costa Coffee Club transactions are now made via the updated app, which has a rewards page, a click-and-collect function and allows users to purchase gift vouchers.

M&C Saatchi London chief data strategy officer James Calvert said: “We can see that the increased simplicity and generosity of the revised proposition is returning a large incremental profit each month.”

Customers using a reusable cup can claim their free coffee after just four drinks, a move Calvert says is seeing them “visiting more frequently and spending more heavily”.