Monday, 27 April 2015

Pret A Manger CEO reveals truth behind free coffee

Something interesting is happening in the stores of the coffee retailer Pret A Manger. Customers are being given drinks for free. Yes, you heard correctly, FREE coffee for customers!

Shoppers have been left puzzled by the apparent generosity of the fastest growing coffee chain in the UK. After placing an order, some customers have been able to walk away without payment for no apparent reason. On the face of it this sounds like all business sense has gone out the window. But in the ultra competitive world of retail coffee, Pret’s CEO Clive Schlee believes this is a great way to gain customer loyalty.

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"We looked at loyalty cards, but we didn’t want to spend all that money building up some complicated Clubcard-style analysis," said Schlee. Instead, Schlee has given permission to staff in all 288 outlets to give away free food and drinks to the customers they like the most. The curious freebies have been puzzling Pret A Manger customers for some time. It turns out that 28% of people who have purchased a coffee in their outlets have been given a free item.

This random act of kindness has caused quite a buzz on social media with much speculation as to what criteria you need to get a free drink. Schlee clarified that Pret staff can decide, "I like the person on the bicycle" or "I like the guy in that tie" or "I fancy that girl or that boy". So far the publicity has mostly been positive, but you can’t help but wonder how a paying customer might now feel after seeing another customer get their coffee for free because "they look hot".

By not adopting a traditional loyalty system, Pret A Manger would certainly be less able to collect valuable data about their customers and their spending habits. Analysis of this data can help to devise new strategies for increased profitability for the company. Breaking from the traditional mould has helped Pret to be seen as special and unique. However, they run the risk of not necessarily rewarding all of their customers equally for their loyalty.

While this certainly isn’t a traditional approach to gaining customer loyalty, it will be interesting to see if it is successful and if other companies follow this rather bold approach.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School 

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