How Dunkin’ Donuts keeps its customers happy


This post comes to you live from the second annual Forrester Research Customer Experience Forum 2010 at the Grand Hyatt in New York. The theme of event is creating breakthrough customer experiences. John Costello, chief global customer and marketing officer for Dunkin’ Brands, discusses how Dunkin’ Brands understands customer needs and develops a 360-degree approach to meeting those needs.

John oversees the marketing and brand efforts for Dunkin’ Donuts as well as Baskin Robbins, but the focus of his forum talk is Dunkin’ Donuts.

Essentially the Dunkin’ brand has remained consistent with what it stood for when the company was founded 60 years ago: coffee and donuts. The challenge: how do you keep a 60-year-old icon relevant to customers today? How do you honor your heritage while meeting consumers’ evolving needs, especially in a world where power has shifted to the consumer?

To Dunkin’, everything the customer touches defines the brand — events, social media, the web, advertising, signage, the in-store environment, the Dunkin’ community presence, and, of course, the product itself. Accepting the reality that every customer touch point defines the Dunkin’ brand is what drives the company’s approach to being customer-centric. The company follows six specific principles to satisfying its customers and keeping its brand relevant:

1. Make sure you understand who your best customers are. The Dunkin’ customer is a “regular person,” which is more of a state of mind than a demographic. Interestingly, Dunkin’ understands that its most loyal customers “cheat on Dunkin'” — they buy coffee elsewhere. Dunkin’ realizes that even with its superfans, the company always has room to grow and cannot afford to take them for granted. Its superfans, in his words, “cruise the world,” and if Dunkin’ is not obsessed about preserving their loyalty, they’ll lose them. So Dunkin’ does things like making it easy for repeat customers to easily auto-charge their Dunkin’ cards

2. Differentiate or disappear. Concentrate on what makes the Dunkin’ brand unique. If a long-lost cousin visited your company and asked, “Why should I choose your brand?” you had better be able to answer that question in one or two easy sentences. Dunkin’ is all about “getting you ready in the morning and keeping you running all day.” Dunkin’ Donuts not the place to hang out and surf the internet but rather a place to get fueled for the day and to return for a  quick refuel. Dunkin’ also realizes that its brand personality is important — customers like its down-to-earth, unpretentious personality. In essence, Dunkin’ is how the everyday folks who keep America running get fueled everyday. Hence, the Dunkin’ tagline, “America runs on Dunkin'” and Dunkin’s cheeky TV spots that poke fun at highfalutin-sounding coffee with esoteric names available at more upscale shops.

3. Embrace the 360-degree touchpoints. Look at every aspect of the customer experience and reinforce the most desirable ones everywhere. Dunkin’ is all about “fast, friendly, and helpful.” The company invites customer feedback on their in-store transaction receipts (customers are motivated to respond with the promise of a free donut). Dunkin’ takes that feedback to improve, with a focus on the in-store experience. Why? Because customers don’t interact with a store; they interact with store managers and their staff at the individual store level. Dunkin’ teams in-store act as the chief Dunkin’ brand ambassadors, even (or perhaps especially) with the drive-through experience, where Dunkin’ really needs to deliver on its promise of getting everyday folk fueled fast.

John also stresses that providing a 360-degree experience, at its core, is about offering products customers want — both the reliable products like glazed donuts and limited edition products. Of course Dunkin’ offers its core product of donuts, but the company has diversified its fare to include more breakfast options and beverages like the Dunkin’ Coolatta or triple chocolate muffins. Importantly, Dunkin’ is not abandoning its focus on delicious and indulgent foods like limited edition goodies for chocolate lovers during Chocolate Lovers month.

John also discusses how establishing a two-way dialogue with customers via social media has been central to a 360-degree approach to being customer-centric. Dunkin’ has used social media channels such as Facebook to Twitter as a customer feedback mechanism. And now Dunkin’ has gotten its customers involved in product creation. Through a social media contest, Dunkin’ Donuts got customers involved in designing a new bananas foster donut flavor that the company will soon produce

4. Think long term. Invest in your brand, not just your sales. It takes a long time to build a great brand. Doing so means investing into a consumer insights team that looks at customer needs over the long run. And relying on the customer feedback (as stated previously) to improve the guest experience.

5. Don’t just hire good people — hire people who are better than yourself. People who work for you and with you can do a lot more than you can do yourself. Assemble great teams who will delight the customer.

6. Have fun. Take the business seriously, but don’t take yourself seriously.

Interestingly, John concludes his talk by discussing how Dunkin’ is expanding across Asia, including Korea, where the brand is established already. So far the branding in Korea is more playful than in the States. An open question: as Dunkin’ goes global, what are the implications for the “America runs on Dunkin'” branding?