Case Study: Portland Café Finds an Eco-Friendly Loyalty Solution

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Coffee shops and punch cards usually go hand in hand. At Rain or Shine Coffee House in Portland, Oregon, however, co-owner Molly Boyl says her eco-conscious clientele was concerned about the impact that paper cards might have on the environment. Boyl found a digital alternative with Perka, a cardless loyalty program that works on mobile phones. Although older customers have been slow to jump on the digital bandwagon, Boyl still says the program has benefited her business.

When it comes to marketing and advertising, what are some of the biggest challenges you face?
Marketing in general is tough right now because people are so inundated with marketing schemes and strategies, and people get fed up with having stuff thrown at them. That can make it difficult for anyone to market; especially small folks who have a beginning business budget, which is what we have because we’ve only been open a year. What helps us is that word of mouth around here travels really fast. It can be hard to reach people in other ways, because people kind of want to plug their ears when you start trying to sell something.

How have you advertised beyond word of mouth since you opened last year?
Beyond word of mouth, we have a really active Facebook page. That’s the main one. We try to make that a pretty personal thing. We give people updates about what’s going on in the shop, but less so in the way of, “Come buy this mocha today for a discounted price.” It’s more like, “This is what so and so said. Isn’t that funny?” Otherwise, we donate stuff around the community. Being that we’re a neighborhood shop, it’s extra important to be donors to things like local schools and to give a few coffee boxes here and there to folks having meetings. Just being present in that way has been a good way to help get our name out. We’ve taken out a few ads here and there. We did one in the Franklin Post, which is the [newspaper at the] high school down the street, and we were written up in the Southeast Examiner, which is the local neighborhood paper. [We’ve done] little things like that, but no billboards and no big flash emails that go to everyone on your list.

I know you also use Perka as your digital loyalty program. How did that come about?
We try to be low impact, in terms of our environmental impact. It’s something that people are into, especially in this neighborhood. So, this just went along with that. We did a cost comparison, and it was just about the same price to do a paperless punch card as it was to do a paper punch card. It also seemed like a good way to stay with the times. If people are doing it this way, why not just jump on from the get-go, instead of having to change further down the line.

Can you tell me a little about how Perka works at your cafe?
People either ask for a punch card or we have a sign right on the counter where the cashier is working that says, “We have a punch card and it’s paperless,” and there are details about how to [sign up]. Most of the time people sign up right then and there. Sometimes people are in a hurry and we’ll say, “You don’t have to do it now. You can sign up from your house.” We remember people’s names here pretty easily so a lot of times we’ll say, “If I’m still working when you sign up [at home], I’ll remember what you got, Teresa, and I’ll give you your punches.” People like that because it’s familiar and friendly, and it makes them feel like they’re part of a club.

We have an iPhone that Perka gave us, and it’s just sitting right on the counter. So someone checks-in on their phone if they’ve got the app downloaded, or they use text messaging to check-in, and once they’ve set up their account and profile, their name just pops up on our phone with a little ding dong sound. We’ll look over and see it, and we’ll hit that person’s name. Once they’re at the front of the line, you can touch the screen and say, “One coffee, two baked goods, and a half-pound of beans.” You hit confirm, and it sends a message back to their phone. If they have the app then the punches appear on a picture of a digital punch card. Or, if they have text messaging, then they just get a text back that says, “You’ve earned X amount of punches.”

Now that you’ve been using Perka at your shop for a while, how would you describe your experience using the platform?
It works OK. People who are excited about it are really excited about it. The people who it doesn’t jive with are some of our older customers. It’s one of those things where [some] people hear that it’s paperless or digital and they freak out. Then you are in the position of having to be a little bit manipulative and selling it to them, whereas with a regular punch card you might not have to. We try to be as non-pushy as possible. It really isn’t too much to our advantage if they do use it, because eventually we’re giving away free product. But, we try to make them aware of why we have it: you’ll never lose it and it’s with you all the time. Where we run into problems is with people who don’t have cell phones, which happens a fair bit, or if people don’t use text messaging. Then we’re in the position of teaching people how to use their phones while we’re also taking orders and making drinks and the line is backing up. That has been one of the complications. It hasn’t happened enough yet to steer us away from using it, though. Like I said, the folks who are excited about it are really glad that we’re doing it.

Why is increasing customer loyalty so important to you as a business owner?
It’s hard to get people to start going crazy and creating new spending habits right now, given the economy. People have their budgets set, and if they’re used to buying a coffee a day then they might keep buying a coffee a day, but they might not start buying a coffee a day and a slice of pizza every week because money is tight. So, it’s important to let customers know that you are aware that they come in, in order to keep them coming back. Being that there are not a bunch of new customers coming in, you need predictability as a vendor. It’s nice to know that Bill is going to be in this afternoon for his cappuccino. It’s nice to know that we’ll see the same person we see every Friday coming in this Friday, because when it comes right down to it, it pays the bills.

Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.

Click here to read more Street Fight local merchant case studies.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.