DUTCH BROS CASE STUDY
11.5%
Response Rate
5,740
New Customers
1,492
Repeat Customers
500%+
ROI
Or if you are more of a reader, keep reading ; )
Because of their culture, Dutch Bros has uber-loyal customers. Broistas, as the employees are called, are cool, they are hip, they play loud music and are people with cool tattoos who actually enjoy talking to people all day. Once they get a customer, they know they can keep them coming back. Customers happily wait in line over 10 minutes to get their coffee each day - the line is long, but it moves pretty fast.
During this campaign, their average customer was coming in 4 times a week and spending about $4 per visit. $16 a week adds up over a year.
The annual value of a new repeat customer $832.
THE PROBLEM
Doesn't sound like much of a problem, right? Wrong. Every business needs to increase customer counts to grow and thrive. And, with 18% of the population moving each year they are fighting regular attrition. It was hard to get new people to make that first leap to wait in line (sometimes would snake through an entire parking lot!) to get their first hit of Dutch Bros drinks and culture.
THE STRATEGY
Dutch Bros does very little discounting so saturating neighborhoods with offers of free coffee does not align with their brand. And, they did not want to discount to their current customers, knowing that their quality product and the customer experience is the value they bring to their customer. They are, though (as mentioned) super cool and will gift a free cup to someone who is trying them for the first time, or having a super bad day.
THE AUDIENCE
New residents moving into the zip codes right around their locations, close enough to become new, regular customers. These folks might not be familiar with their brand, they were in their habit building process and they were appalled at the long lines.
THE RESPONSE
Over the course of a year, Dutch Bros reached out to about 50,000 new residents. In return, they saw 5740 new customers wait in that line to see what all the hype was about. That's an 11.5% response rate. And we know from our follow up thank you postcard, that a whopping 26% came back for a 2nd visit!
I'm not going to do all the math right here (it's all on the video) but even if those super-cool, tattooed, loud music playing Broistas could only turn 1 out of 4 of the people who already came back for a 2nd visit into a new regular customer, (and we know they are way better than that), Dutch Bros saw over 500% ROI in 12 months time.
Consider further that people in that market stay in their homes an average of 5.6 years... it's an increase in revenue of $1.7 million dollars, from a $60K investment. That is the power of a new mover campaign.
