Dunkin’ humbles Starbucks in customer loyalty
By Donna Goodison
Monday, March 5, 2007 - Updated: 11:27 AM EST
Dunkin’ Donuts may be smaller than Starbucks, but it no longer plays second fiddle when it comes to customer loyalty.
For the first time in five years, the Canton chain topped its larger rival in the coffee and doughnuts category on Brand Keys Inc.’s annual customer loyalty survey. Krispy Kreme took third place.
The New York market research firm’s survey measures how well a company meets loyal customers’ expectations based on location and value, in-store experience and service, quality and taste, and variety and range of offerings.
“Starbucks had been seen to have a significantly stronger loyalty engagement bond with their customers than any of the others in the category, and they’ve taken a downturn,” said Robert Passikoff, Brand Keys’ founder and president. “Now Dunkin’, which is No. 1, is seen to have that significant advantage.”
Passikoff attributed Dunkin’s first-place finish to a successful branding campaign and moves by Starbucks that have shifted it from a coffee brand to more of a lifestyle brand.
“Dunkin’ has been introducing new products, but they’re all products within a well-considered sweet spot for them,” Passikoff said. “When you think of Dunkin’, you think of doughnuts and coffee. You don’t think of CDs, you don’t think of sandwiches, you don’t think of newspapers.”
The survey results come on the heels of a memo penned last month by Starbucks founder and chairman Howard Schultz that said the Seattle chain’s growth has watered down its coffeehouse culture and turned the brand into a chain of “sterile, cookie-cutter” stores that no longer reflect its “soul of the past.”
“They walked away from what was essentially an experience-heavy brand,” Passikoff said. “Everything that Dunkin’ has done, whether it’s been intentional or it’s been serendipitous based on constraints in marketing, they’ve done pretty well. (It’s) been resonating as far as the right values and the right sense of community that brands like this need to survive.”
Brand Keys, which has conducted the customer loyalty surveys for a decade and partnered with Brandweek to bestow awards to winners since 2004, added the coffee and doughnuts category five years ago. It conducted telephone surveys of 20,000 U.S. adults, equally split between men and women ages 18 to 60, from nine census regions. Those who buy coffee three or more times a week were asked where they make their purchases and were classified as either Dunkin’, Starbucks or Krispy Kreme customers.
Dunkin’s scores rose in all four measures judged. It scored higher than Starbucks in both in-store service and experience, and quality and taste.
“It’s humbling in so many ways when you look at where we started a few years ago to reinvigorate our brand and step up our customer service,” Dunkin’ Brands chairman and CEO Jon Luther said.
Dunkin’ tied with Starbucks on variety and range of offerings. Starbucks - with 8,800-plus U.S. locations in 50 states versus Dunkin’s 5,300 in 34 states - scored higher on location and value, but its rating fell from last year.
“I’m confused by the value statement, but (Starbucks’) footprint around America is stronger than ours,” Luther said. “We only have 70 stores west of the Mississippi. We’re moving in that direction quickly with franchisees, but 90 percent of our revenue is derived in roughly a third of the country.”
Dunkin’s new deal with Procter & Gamble Co., announced last week, is designed to boost its recognition as franchise owners move into new markets, Luther said. Procter & Gamble will distribute packaged Dunkin’ coffee to thousands of U.S. grocery stores and other retailers within a year.
“We didn’t create this strategic alliance for a profit, it was to build our brand and extend our brand,” Luther said.
By Donna Goodison
Monday, March 5, 2007 - Updated: 11:27 AM EST
Dunkin’ Donuts may be smaller than Starbucks, but it no longer plays second fiddle when it comes to customer loyalty.
For the first time in five years, the Canton chain topped its larger rival in the coffee and doughnuts category on Brand Keys Inc.’s annual customer loyalty survey. Krispy Kreme took third place.
The New York market research firm’s survey measures how well a company meets loyal customers’ expectations based on location and value, in-store experience and service, quality and taste, and variety and range of offerings.
“Starbucks had been seen to have a significantly stronger loyalty engagement bond with their customers than any of the others in the category, and they’ve taken a downturn,” said Robert Passikoff, Brand Keys’ founder and president. “Now Dunkin’, which is No. 1, is seen to have that significant advantage.”
Passikoff attributed Dunkin’s first-place finish to a successful branding campaign and moves by Starbucks that have shifted it from a coffee brand to more of a lifestyle brand.
“Dunkin’ has been introducing new products, but they’re all products within a well-considered sweet spot for them,” Passikoff said. “When you think of Dunkin’, you think of doughnuts and coffee. You don’t think of CDs, you don’t think of sandwiches, you don’t think of newspapers.”
The survey results come on the heels of a memo penned last month by Starbucks founder and chairman Howard Schultz that said the Seattle chain’s growth has watered down its coffeehouse culture and turned the brand into a chain of “sterile, cookie-cutter” stores that no longer reflect its “soul of the past.”
“They walked away from what was essentially an experience-heavy brand,” Passikoff said. “Everything that Dunkin’ has done, whether it’s been intentional or it’s been serendipitous based on constraints in marketing, they’ve done pretty well. (It’s) been resonating as far as the right values and the right sense of community that brands like this need to survive.”
Brand Keys, which has conducted the customer loyalty surveys for a decade and partnered with Brandweek to bestow awards to winners since 2004, added the coffee and doughnuts category five years ago. It conducted telephone surveys of 20,000 U.S. adults, equally split between men and women ages 18 to 60, from nine census regions. Those who buy coffee three or more times a week were asked where they make their purchases and were classified as either Dunkin’, Starbucks or Krispy Kreme customers.
Dunkin’s scores rose in all four measures judged. It scored higher than Starbucks in both in-store service and experience, and quality and taste.
“It’s humbling in so many ways when you look at where we started a few years ago to reinvigorate our brand and step up our customer service,” Dunkin’ Brands chairman and CEO Jon Luther said.
Dunkin’ tied with Starbucks on variety and range of offerings. Starbucks - with 8,800-plus U.S. locations in 50 states versus Dunkin’s 5,300 in 34 states - scored higher on location and value, but its rating fell from last year.
“I’m confused by the value statement, but (Starbucks’) footprint around America is stronger than ours,” Luther said. “We only have 70 stores west of the Mississippi. We’re moving in that direction quickly with franchisees, but 90 percent of our revenue is derived in roughly a third of the country.”
Dunkin’s new deal with Procter & Gamble Co., announced last week, is designed to boost its recognition as franchise owners move into new markets, Luther said. Procter & Gamble will distribute packaged Dunkin’ coffee to thousands of U.S. grocery stores and other retailers within a year.
“We didn’t create this strategic alliance for a profit, it was to build our brand and extend our brand,” Luther said.
No comments:
Post a Comment