If you’re a regular customer at Dunkin’ Donuts, Nigel Travis wants to get to know you really, really well.
Like any CEO, he believes he can grow sales through customer loyalty. And this being the 21st century, he knows there’s an “app” for that.
So Travis, who heads Dunkin’ Brands Group, the corporate umbrella for the Dunkin’ Donuts and Baskin-Robbins chains, launched the company’s first mobile-device application in August. With it, Dunkin’ Donuts customers can pay for their coffee, pastry and sandwiches using their smartphones.
“The app is absolutely essential to our future,” Travis said last week at the Wells Fargo Securities 2012 Retail & Restaurants Summit held in Boston. “It’s going to be the foundation of so much more.”
When the company unveiled the app, it cited speed and convenience for customers. Users download the free app from the Apple (iPhone) or Google (Android) stores to put a virtual Dunkin’ Donuts payment card in their phones, which they then load through a credit card or PayPal transaction. At the register, the app is displayed to a clerk, who scans the card to deduct a customer’s purchases.
(Competitor Starbucks has had an app that operates in much the same way since January 2011, and is now doing more than 1 million app transactions a week in its U.S. stores, says CEO Howard Schultz. In August, the company invested $25 million in a mobile-payment startup, Square, that will begin handling Starbucks’ smartphone transactions next month.)
Travis, who joined Dunkin’ Brands as CEO in early 2009, said the technology platform he found at the store level when he arrived was “vintage 1970.” Today, it’s light years ahead because of the “enormous amounts of money” that franchisees have invested, he told the Wells Fargo summit.
Nearly all of company’s 17,000 Dunkin’ Donuts and Baskin-Robbins stores worldwide are owned and operated by franchisees.
Prior to Dunkin’ Brands, Travis headed Papa John’s International, where technology — particularly the introduction of online pizza ordering — played a key role in boosting revenue. He wants to replicate that at Dunkin’ Brands, which is based in suburban Boston.
“We’re determined to do the same here in the mobile space,” he said at the Wells Fargo summit, which was webcast. The app will be “a major weapon we’re going to use.” In the next few weeks, a new version of the app will be released that will tie users to offers in the company’s still-developing loyalty program, he said. And that will move Dunkin’ Brands closer to one-to-one marketing.
At Papa John’s — and before that at Blockbuster Inc., where Travis served as president — customers were better known because of the personal data collected, such as street address and telephone number. The move to Dunkin’ Brands “is like going back 30 years — you don’t have all that information,” Travis said.
But with the new smartphone app, “We’re about to get to the stage where we can do one-to-one marketing,” he said. “We will know what your behavior is, and what kind of offers you’re responding to.” When a one-to-one strategy was implemented at Papa John’s using customers’ personal information, “We had a 2,000 percent return on that investment,” Travis said. “So I’m really excited” about employing it at Dunkin’ Brands.
Reminded of the two-year time frame cited by some as standard in developing a good user database, Travis waved it off as too long. “We’re always very aggressive.”