Retail

Cementing Customer Relationships Over A Hot Cup Of Coffee

Coffee

Relationship commerce exists as something of a gold standard in the era of the increasingly scattered customer. Loyalty, in the era of mobile, can be a tricky prospect. Where once stores could focus on building long-term relationships with their consumers, today the average merchant doesn’t have time to let that kind of relationship flower.

This challenge is seen across the spectrum of consumers, but it’s most acutely noticeable among older or bridge millennials — consumers between the ages of 30 and 40 who are buying houses, having children and beginning to settle into their roles as the drivers of commerce in the U.S. according to the figures PYMNTS has gathered.

As a group, they can be extremely hard to form a relationship with, because in many ways, they’re a moving target. They love to shop online; they have a large preference to check Amazon first when they are shopping online and they’re comfortable utilizing mobile to showroom goods in one place — rather than buy them elsewhere.

Plus, they’re eager to try new things. According to PYMNTS’ report, 30 percent of bridge millennials having switched retailers — or at least have tried out a new merchant in the last 30 days. That’s great news for retailers, particularly new brands that struggle with getting consumers to give them a try. The flip side of that great news is fickleness: Bridge millennials may be easier to attract to a new experience than the generations that came before, but their loyalty is harder to capture because they’re so willing to move on to a new dance partner.

So, what’s a brand to do?

For the coffee enthusiasts at illy, the question was particularly pressing. The company offers a high-quality product that customers enjoy, but, of course, coffee is a commodity that is ubiquitous. Being a consumer’s consistent choice over time is not an easy task in a crowded retail environment.

By working with relationship commerce firm OrderGroove, however, illy has found a way to tap into their natural customer base. In so doing, they’ve managed to build out better and more lasting relationships.

The brand sells more than coffee; illy also sells iperEspresso machines, which include both a capsule and espresso functionality. Those espresso machine customers, illy realized, were a natural place to start when seeking out longer-term relationships, because, in a sense, those customers already made the first move by purchasing a machine that ranges from $150–$275 in price.

At checkout, customers are prompted to sign up for the “illy a casa” program, which offers a selection of iperEspresso machines at a reduced or complimentary price with opt-in to an 18-month subscription relationship for illy’s recyclable coffee or espresso capsules.

“With OrderGroove’s technology, data-driven insights and consumer expertise, we’re able to pursue a deeper and longer relationship with our customers, who love illy coffee and want to enjoy it at home,” said Andrea Vitale, director of eCommerce and direct-to-consumer business, for illy Caffe, North America. “By offering the ‘illy a casa’ program at the optimal moment, we are making it easy and convenient to enjoy illy coffee through a premium subscription program. In return, we are experiencing increased customer satisfaction and lifetime value. It’s a win-win across the board.”

It’s a classic case of giving something — in this case a reduced or even free high-end coffee machine — in order to get something more valuable: a long-term relationship with customers.

This new focus has had a notable effect: According to illy’s internal data, since launching the program in June 2017, 44 percent of illy subscribers added in the U.S. during this period chose the “illy a casa” machine program. Moreover, illy experienced an 88 percent increase in customer spending compared to one-time purchases of the coffee machine without the “illy a casa” program.

According to illy, the program is bound for expansion. Currently, “illy a casa” is available online in eight countries, but more are said to be on the way.

Customers want relationships with their merchants, but the relationship has to make sense and be predicated on offering customers something they already want — not convincing them they want something else.

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