Battling Spurious Loyalty
Spurious brand loyalty, according to Wikipedia is when a customer “repurchases a brand due to situational constraints…, a lack of viable alternatives, or out of convenience.” So how does a company battle against spurious loyalty when they enter a new market?
Well, in the world of popular coffee this battle has been going on for a few years. Currently, Tim Hortons has legions of spurious customers.
“Let’s get a Tim’s before work” or “I’ll grab a double double in order to stay awake” are just a few examples of Tim Hortons’ brand dominance.
Since coffee is a million dollar business, McDonald’s has recently (the last few years) entered the fray. However, with Tim’s Hortons having legions of spurious customers, how does a company pull coffee drinkers away from the only place they get coffee from?
McDonald’s thinks free coffee is the answer. Currently, McDonald’s offers a free small coffee 24/7 to customers with no strings attached. They figure, if people skip buying Tim’s in order to get a free McDonald’s coffee, they will see that McDonald’s coffee is superior and start buying McDonald’s instead.
Yet, McDonald’s free promotion is risky. Offering free coffee might get some people to try out its coffee, yet if they are giving it out for free then once the promotion is over it might be hard to persuade people to start buying a free product. It’s hard to argue one week later that a free product now needs to be paid for. What happened between the two weeks to create a 140% increase in price? (0-$1.40)
Another problem is that automatically people will think a free coffee is worse than one that has to be paid for. I think to myself, well if this coffee is free how can it be better than coffee worth 140% more in price? Although it is entirely possible that a free coffee is better, it creates a negative perception prior to the first sip.
Instead, I think McDonald’s needs to begin switching tactics. Have some coffee related events to draw media interest. Instead of giving everyone free coffee, have some samples in the store to promote the coffee. Provide excellent customer service, excellent coffee, and promote the coffee through an integrated marketing plan. This strategy will avoid the risks of the free coffee promotion and create a prestige or at least a positive reputation for McDonald’s coffee.
By creating a great product and coupling it with great service, McDonald’s can create some buzz around its coffee. Better coffee with a smile, what more do customers want?