Rewards Case Study: DAVIDsTEA’s Frequent Steeper
If you had told me when I was eight years old that I would one day not only enjoy drinking tea but would also be addicted to buying it, I would have called you a liar. For years I thought of tea as “dirt water” and flat out refused to try it, assuming I wouldn’t like it purely because it was something new.
All of this started to change a couple of years ago when I started noticing a bright teal tag on my friends’ keychains. When I asked them what it was, their eyes lit up as they began to excitedly tell me all about this new tea chain called DAVIDsTEA. They described bright shops with walls upon walls of tea in all flavours and varieties, and at the mention of my favourite flavor – peanut butter – I knew I had to check it out.
After my first sip I was hooked, and immediately joined the Frequent Steeper program in order to start reaping the rewards of being a tea fanatic. I’ve now been a member for a couple of years, and over that time I’ve had the chance to really explore and experience what it means to be a DAVIDsTEA Frequent Steeper. So if you’ve ever wondered whether this cup of rewards tea is perfectly steeped or a bit over-brewed, I’m here to lay it all on the table.
Why Frequent Steeper is the Perfect Cup of Tea
Whether you’re into invigorating black teas or delectable herbals, DAVIDsTEA has got the type of tea for you. But does this customer-friendly consideration extend to their rewards program as well? No matter how much you love (or dislike) tea, I think you’ll agree that they’re doing more than a couple of things right.
1. Status-Driven Community
In general, customers are driven by seven different types of motivations. One of these is vanity, and this motivation is one of the biggest reasons people will join a rewards program. As I mentioned earlier, the main reason I was attracted to the Frequent Steeper program in the first place was because I noticed a whole bunch of people walking around with the same eye-catching tag on their keyrings. I wanted to know more about this community, and this curiosity is what ultimately prompted me to join.
Now that I’m a member, I feel like I’ve joined an exclusive club made up of others who share my interests, making it a valuable addition to my lifestyle. Now I can show off my membership and let others know that I’m a Frequent Steeper and proud of it! By giving their members a physical card and additional keychain token, DAVIDsTEA capitalized on the trendy nature of their brand and turned their rewards program into an exclusive community.
The visual nature of the brand has also extended the sense of belonging to the digital realm. With a highly active Instagram, Twitter, and Facebook feed, DAVIDsTEA encourages their customers to share their experiences with other Steepers all over the world. These instantaneous methods of communication gives customers the chance to incorporate their membership into every area of their life, instilling a deeper emotional connection to both the brand and the program with every interaction.
2. Effective Communication
If the Air Miles expiry debate taught us anything, it’s that effective communication within a rewards program is integral to its success. Thankfully, DAVIDsTEA’s Frequent Steeper has this in spades! From program updates to account balances and product promotions, Frequent Steeper members are kept in the loop at every stage of their shopping journey.
This communication loop is outstanding for a number of reasons. First, it keeps me informed and ensures that I’ll never miss a chance to redeem my rewards. Putting the program’s value front and center also reminds me of why I enrolled in the first place and encourages me to keep engaging with the program in order to receive more of these benefits in the future.
Finally, informing customers of program changes helps establish a sense of trust between the brand and its customers. Whether I’m pleased with the changes or not, I appreciate the brand’s commitment to keeping me aware of how my membership works and what I stand to gain by participating. These considerations establish a sense of transparency that leaks into my experience with the rest of the company, creating the desire to further engage and explore their products based on my already positive experience.
3. Omnichannel Customer Experience
If you’re a tea connoisseur like me, you don’t really need to visit a DAVIDsTEA boutique to pick what you want to try next (even though their stores are super lovely). Instead, I prefer to do my shopping online where I can look at their extensive tea menu from the comfort of my own couch.
DAVIDsTEA has built this preferred shopping behaviour into the Frequent Steeper program, allowing customers to earn and redeem rewards in the same way no matter how they shop. Whether you prefer to carry a rewards card or not, DAVIDsTEA promises their customers one point for every dollar spent, with the opportunity to redeem these rewards for free tea every quarter.
They even take it one step further and reward every customer for signing up in store or registering online with a free cup of tea. That means that every customer can get two free cups of tea – just for signing up in either place! This added bonus gives me more of an incentive to actively participate in the program in the future, while also establishing what I stand to gain through participation. Free tea is the best kind of tea, and the fact that DAVIDsTEA is willing to accommodate me no matter where I want to shop is as sweet as sugar.
Where DAVIDsTEA Over-Brewed
Even though I love strong tea, there’ve been a couple of instances where I left the teabag in for slightly too long. This resulted in a rather unpleasant and bitter tea experience, and while I wouldn’t say the Frequent Steeper program leaves a bad taste in my mouth there are definitely a couple of elements that require a bit of sweetener.
1. Limited Rewards
One of the reasons I love DAVIDsTEA so much is because they sell more than just tea. Amidst the rows of starter bundles and delicious brews, they also sell beautiful drinkware and tea accessories that any loose-leaf tea drinker can very easily convince themselves that they need. These products are one of the major reasons I prefer DAVIDsTEA to somewhere like Teavana. The only problem? They’re quite expensive.
Considering DAVIDsTEA offers a rewards program, it would be reasonable to assume that I could redeem some of my points for money off a novelty mug or teapot. After all, that’s how many other programs operate and how I as a customer have come to understand these types of points-based programs. Unfortunately, the only reward I’m able to receive is free tea, and while this is still valuable for me as a tea addict, it gives me no choice as to how my hard-earned points are spent. For a brand with so much variety, their rewards are pretty limiting.
Offering such limited rewards puts DAVIDsTEA in a very precarious position because it almost guarantees that the reward will fall prey to the Law of Diminishing Marginal Utility. This concept is is simply a fancy way of saying that customers are likely to lose their enthusiasm for a reward after receiving it several times. Expanding their rewards menu would give DAVIDsTEA the chance to create new excitement in some of their oldest customers while enticing new ones to try it out.
2. Short Earning and Redemption Windows
The Frequent Steeper program rewards customers on a quarterly basis. If you spend over $100 in three months, you’re rewarded with 50 grams of free tea that you can redeem either in store or online.
Up front this doesn’t seem like an unreasonable timeline, and I was actually excited about how often I could earn more tea. However, I quickly realized that in order to take advantage of this earning/redemption scale I’d have to be buying a lot more tea than I originally anticipated. With this model in place, I’d have to be buying upwards of 500 grams of tea every three months, and while I love tea a lot more than the average person, these quantities would put me into the tea hoarder category.
DAVIDsTEA’s redemption window is also quite small. After finally earning the reward, I only have two months to redeem it. While it’s free tea, I still don’t need that much at my house, which leads me to drag my feet a bit on actually redeeming the reward. Additionally, I wasn’t too keen on spending money on shipping just to receive my reward and since I don’t live close to any retail locations that was my only option.
Even with their points rollover, I still never ended up redeeming my reward in time and forfeited the tea I could have added to my collection. This severely impacted my overall customer experience, leaving a bitter taste in my mouth that could have been avoided with more flexible earning and redemption windows. Keeping these things in mind ensures customers never feel cheated out of their rewards, and go a long way for creating a lasting positive impression.
3. Limited Digital Experience
While it’s great that customers can use their Frequent Steeper online and in-store, this omnichannel experience can still be taken to the next level. Currently the program hasn’t been optimized for mobile, putting them at a significant disadvantage in comparison to other hot drink retailers like Starbucks.
Without a mobile app, customers who forget their card have to go through the hassle of offering baristas their email address in order to participate in the program. Even though this isn’t an overly discouraging hurdle, it still disrupts the customer experience in a way that could potentially be avoided.
The lack of mobile accessibility can also significantly impact DAVIDsTEA’s ability to upsell to their customers. If I’m in-store and able to see how close I am to my next reward on my phone, I’d be way more likely to spend more on my purchase in order to close that redemption gap. This type of oversight demonstrates a clear disconnect between the potential of the Frequent Steeper program and its reality, illustrating that, as with anything, there’s always room for improvement.
The Makings for a Delicious Pot of Loyal-tea
Whether you love a good cup of tea or not, it’s hard to deny that DAVIDsTEA knows how to give their customers what they want. From a shared community to fun-coloured key tags, outstanding communication, and omnichannel experiences, Frequent Steeper knows how to please shoppers of all kinds. So while they may be missing a mobile app and have limited rewards, it’s easy to see that DAVIDsTEA still knows how to brew a great pot of loyal-tea.