Nespresso Personalization Grinds Out Competition

Nespresso Personalization Grinds Out Competition

When it comes to stimulating consumer interest, loyalty marketers have become quite adept at brewing up ideas. Few of these ideas, however, resonate with the consumer to the point of clouding out convenient competition.

Few, but some do. Recently, Nespresso achieved relevance in spades, and pods, through personalization.

For those unaware, Nespresso is a home-order coffee service that involves a compact brewer and a broad selection of color-coded pods. I joined the Nespresso Club, which is available to those who purchase the machine and order the pods, in 2010. Since then, I’ve probably ordered hundreds of sleeves of coffee pods, most being the more robust blends.

I also am a member of the My Starbucks Rewards program, through which I earn “Stars” toward free drinks when paying with my Starbucks card or app. Additionally I get a free birthday drink and free in-store refills and custom offers. But no offer by Starbucks has been nearly as customized as a package I recently received from Nespresso

The box, labeled with the Nespresso logo, included two sleeves of coffee pods, neither of which I’ve tried. The package also included a drink recipe involving one of the blends.

“As a thank you for your continuous loyalty, we are happy to offer you two sleeves of coffee especially selected for you,” the included note stated. Identifying me as “an amateur of intense blends,” Nespresso sent me coffees both rich and full-bodied, suiting my preferences. The only shortfall: The note, signed by Nespresso Club Director Anne Gillam, was not addressed to me by name.

Nevertheless, the package made for an experience I will remember, more so than any of my Starbuck’s interactions. The My Starbucks program is without doubt an ingenious marketing strategy. By linking its rewards to a Starbucks-branded payment card or app, it has created a conditioning mechanism that ensures a high capture rate. However, I have yet to be inspired by its efforts to know me.

When I enter a Starbucks, no one acknowledges my regular order. Other than birthday specials, the chain does not send me surprise gifts that reflect my preferences. Even when it sends me regular reminders to reload my card, Starbucks does not offer me so much as a cup of coffee as an incentive.

That’s a missed opportunity, particularly in the context of receiving these Nespresso pods. The My Starbucks program is capturing data, but in my case it is not using those insights to delight me. The program is not doing what loyalty initiatives are designed to do – to support a platform that enables the brand to learn and share, to encourage desired consumer behavior through relevant, personalized experiences.

I’d suggest three simple guidelines for achieving that:

1: Know why: Determine why your best customers choose your brand. This feedback can be gathered in a number of ways, including post-purchase online surveys, in-store employee feedback and a simple question on loyalty program registrations.

2: Know what: Once a company understands why its best shoppers choose it over others, it can get tactical. This means collecting only the data required to better understand and serve those preferences and then putting it to work in ways that noticeably benefit the customer.

3: Know how: People have different expectations among brands because they use them in different ways, at different times of day and have varying emotional affiliations. When it comes to getting coffee, for example, I expect good flavor, some camaraderie and a positive vibe to start my day positively. When I am buying electronics, I want expertise, respect and an appreciation of my technological prowess. Using loyalty data, brands can determine when to send communications and surprises that align with the expected brand experience, how to send them, and the frequency with which to do it.

Which is what Nespresso nailed down. The team rewarded my loyalty in a way that brought me a little bit closer to the brand, through their small effort to simply recognize the preferences I so clearly demonstrate via my purchase behavior. I’ve ordered more pods, and plan on taking more of my coffee business in-house.