From retro stamp card to front of the pack
Caffè Nero storms in with Yoyo mobile payments and loyalty
It was a really great story when Yoyo’s founders made one simple request after they won the Duke of York’s inaugural Pitch@Palace in 2014. They asked for an introduction to Caffè Nero founder, Gerry Ford.
Three years later, they will roll out a mobile version of Caffè Nero’s iconic blue free coffee stamp cards as the first major launch for Yoyo on the high street and the first digital move for Caffè Nero.
Yoyo Wallet is no start-up. It is the UK’s fastest growing mobile wallet, used at corporates including JP Morgan, Visa, Accenture, PwC, HP and countless universities with York, Birmingham and Imperial College London among them. But the Caffè Nero launch is significant for both parties. It is the coffee brand’s first mobile payment and loyalty app which takes its blue stamp card into the digital age and for Yoyo, it is a high street presence albeit as a white label implementation.
The iOS and Android-available app, which can be used in all Caffè Nero stores across the UK and Ireland, will work in a similar way to the existing blue paper stamp card, which has been in circulation since 1997 and rewards customers with their 10th coffee free. The card is used by nine million customers yearly, collecting in excess of 50 million stamps. Through the mobile app however, Caffè Nero will for the first time be able to learn about its customers.
The current paper stamp card will be remaining according to Caffè Nero: “Our paper card is much-loved and used by millions of our customers worldwide; it will continue to be available in all stores. With the new Caffè Nero app we’re trying to enhance the customer experience and make it even more rewarding. We feel choice is important when it comes to customer loyalty.”
An additional first is that the new Caffè Nero app offers straight through payment to a customer’s existing payment card of choice, rather than through the top-up of a prepaid card. “There is nothing wrong with existing methods of payment,” said Yoyo CEO and founder Alain Falys. “No retailer has a payment problem: cash, cards, contactless etc work fine. But retailers have the big problem of not knowing their customers and not being able to leverage the smartphones in their hands to engage with them. Our mission is to identify every customer at the point of sale and enable retailers to personalise the buying experience and increase brand loyalty. In effect to reward, surprise and delight.”
Marcus Denison-Smith, head of marketing at Nero explained the journey to a digital launch: “We have been thinking about this for a long time. One of our barriers was our ePOS. We upgraded last year. It was only once we had done this that we could take our loyalty card and make it digital.
“Our loyalty card is very successful for us, because our brand equity is sitting in a wallet, but customers are anonymous. Through the digital wallet we will gain a better understanding of our customers, and learn when and where they are purchasing. At the same time, we don’t want to change the experience. We want to make it as close to the existing experience as we can. The stamp card is there on the phone in all its glory. It is very simple.”
A differentiator for Caffè Nero is that the app is payment agnostic. In addition, customers can choose to use the app just to collect loyalty stamps, or to pay as well.
Asked if Nero was planning any sort of gamification, Denison-Smith (left) said that this was inherent in collecting nine stamps to be rewarded with a coffee. “What we are doing right now is getting people onto the app, using immediate promos to drive adoption. If four coffees are bought in the first week, then they will get four more. We want to be adventurous and imaginative, but it is early days.”
Understanding of the customer is at the heart of the proposition. “Once we are gaining that knowledge, then we can offer incentives and rewards that reflect their behaviour,” said Denison-Smith. In the future, we will be able to carry out discreet and targeted offers on a new product on trial, such as a cake or a panini and of course geo-targeted opportunities will be available to us.”
The app will give information about where the nearest Caffè Nero is, and social channels will be used to engage with as many people as possible.
“Our goal is to keep it as simple as possible, but social has huge potential. For example, we want to be able to offer customers the chance to send their free coffee to a friend or a colleague, and we also want to grow the dialogue with our customers. We have some real brand fans and evangelists, and a very long tail of less frequent customers. If, with the app, we can get one more visit from these less frequent customers a month, then this would be significant.”
Although Caffè Nero and Yoyo have been in contact since that first introduction to Nero founder Gerry Ford, the implementation of the app took just seven months. “Yoyo did the heavy lifting, so it hasn’t seemed too arduous for us. We definitely benefited from their skills.”
Says Alain Falys (left), CEO and co-founder of Yoyo Wallet: “The Caffè Nero stamp card is an icon of the loyalty scene and it’s our intention to take it to greater heights still through this partnership. While most of our customers use the Yoyo wallet, Caffè Nero is a big enough brand to warrant its own app.
“Since starting Yoyo, our goal has been to help retailers build rewarding customer relationships.
“This boils down to two key actions: identifying every single customer at the point-of-sale and engaging them in a personalised manner via their smartphone. We’re thrilled to be doing this in conjunction with Caffè Nero – one of the UK’s leading brands – and are excited to see the results the partnership can generate.”
Says Gerry Ford, founder of Caffè Nero: “We have always felt that we have to earn our customer’s loyalty. Our loyalty card, still the most generous on the high street, is a very simple way to say ‘Thank You’ to all our customers who keep coming back. Making our loyalty card available on our customers’ phones whilst also including an integrated payment system is a win-win. It still rewards customer loyalty and makes paying fast and easy. We believe this will be a great step forward for our customer experience.”
The app also helps to tackle the industry-wide issue of lost loyalty with five million Caffè Nero loyalty stamps and 500,000 coffees thought to be going unredeemed each year. Furthermore, according to a new survey by Yoyo Wallet more than 87 million loyalty cards are lost every year.
Don’t miss a special Q&A with Alain Falys in our “Meet the Sponsors of The Loyalty Magazine Awards” series. Coming soon.