Excellence Test Score 11/26
Changing Coffee Habits (One Cup at a Time)
Coffee: as a nation, we’re addicted to the stuff, drinking 70 million cups each day. If you can’t get through the day without your caffeine fix, no problem! From jars of instant coffee in the supermarket to the ubiquitous takeaway cup available on every street corner, our favourite drug is everywhere.
But do you ever stop to question the quality of your regular coffee hit? One company is on a mission to raise our expectations by improving the quality of the coffee we drink: subscription start-up Pact.
In this case study, we’ll see how Pact uses customer engagement to delight customers and how they combine this with a referral scheme to attract new subscribers.
In 2012, Pact’s founder and serial entrepreneur, Stephen Rapoport, was searching for an idea for a new venture. His wife suggested he should stop trying to think like an investor and instead do something he loved. One thing he loved was coffee, so Rapoport decided to launch a business selling high-quality ground coffee online.
As with all the best crusaders, Rapoport wasted no time getting his business off the ground. A mere 72 hours later he’d created an ecommerce website and sold his first bag of coffee.
Today, the subscription-based business ships up to 4,000 bags (that’s around a tonne of coffee) each day to customers across the UK. Although one-off bags are available, Pact’s offering focuses on providing a subscription service giving customers a regular supply of coffee.
Two things that make Pact stand out are its quality product and its ethical approach. Pact sources high-quality coffee, roasting it themselves to create a better tasting product. The coffee is shipped directly from farmers around the world and is roasted and ground at Pact’s HQ in London.
Pact is also committed to providing ethically-sourced coffee. While traditional coffee business models typically involve exporters, importers and agents, Pact has simplified the supply chain by working directly with farmers. By cutting out the middleman Pact ensures the farmers get the very best price for their coffee.
How Pact Uses Customer Engagement
Pact uses a variety of techniques to engage with customers throughout every step of the customer journey and understands that delighting customers is key to success. As Rapoport said:
“The billion-dollar businesses of tomorrow will almost all be customer-led.”
Here are some of the techniques Pact uses:
- Offer a Personal Service
Shop with Pact and you’ll soon see that hey offer a highly-personalised service. You choose how much coffee you want to receive and how often. You also specify whether you want caffeinated or de-caffeinated coffee, and choose bags or pods depending on the type of coffee machine you own.
- Speak their language
Pact uses a warm and friendly tone to entice customers to sign up. They tap into the motivations of coffee drinkers by using phrases such as “never run out of the beans you love” to encourage customers to start a subscription.
Pact also makes customers feel special by treating them like connoisseurs. They share lots of information about their product, flattering customers by acknowledging that they understand the nuances of fine coffee.
- Create communities
Pact is very active on social media, regularly communicating with audiences on Facebook, Twitter, YouTube, Instagram, Pinterest and their own blog. Not only do they post regularly but they also take the time to reply to every comment.
Alongside the usual social updates, Pact also uses creative devices to make customers feel they are part of something special. For example, they asked customers to write humorous compliments that would then be printed on other customer’s packaging. It’s a simple and cost-effective device but one that’s sure to raise a smile and make customers feel connected to the wider Pact community.
- Surprise customers
We’ve come to expect any online purchase to attract a delivery fee, yet Pact offers free first-class delivery across the UK. It’s just a little detail but one that is guaranteed to delight customers when they reach the checkout and realise that there is no delivery to pay.
- Seek feedback
Pact actively seeks the views of its customers in several ways. They regularly ask for comments on social media but have also enlisted the help of customers when choosing new coffee beans.
Pact loves to use original ways to ask for feedback beyond the usual ‘let us know what you think.’ For example, they recently asked customers to provide feedback in rhyme form. As a result, customers were inspired to write short poems about their Pact experience, posting them on social media for others to see.
- Make life easy
Pact keeps the shopping process really simple and the customer feels in control at all times. The subscriber can easily manage the frequency of their deliveries so that they never run out of coffee, but equally never have too much. It’s also possible to pause or cancel orders at any time. The system is incredibly transparent, ensuring the customer always knows how much they are paying and how often they will receive deliveries.
- Tell a story
Pact’s ethical standpoint is clearly explained on the website. This creates an emotional connection with customers by highlighting the valuable contribution they are making to the lives of farmers every time they shop with Pact.
- Creating Brand Ambassadors using Referral Schemes
Pact knows word-of-mouth is crucial to the growth of their business. As Pact’s communications manager Ed Grattan says:
“A big element of the way people join Pact is that they hear about it from friends.”
Social media plays a large part in helping existing customers refer the brand to new audiences. By creating online communities Pact can talk directly to existing customers, asking loyal followers to help spread the word about Pact.
After creating an account, Pact customers are given their own unique code which they can share to recruit friends. When a new customer uses the code, both they and the original customer can claim a bag of coffee for just a pound. Other rewards have included a free reusable cup for referring three new customers. The cost of these rewards is minimal for Pact, but the reward is huge.
The referral schemes that Pact introduces are always kept as simple as possible – this is key to any successful referral scheme. Customers need to be able to recruit friends with minimal effort. If the task takes more than a couple of minutes, people won’t bother.
Pact is a great example of a successful start-up that’s got its customer engagement strategy exactly right. They connect well with customers and quickly build an emotional connection. This means that customers are very happy to refer new shoppers to the brand. As a result, Pact has seen its customer base and revenue grow exponentially since its launch.
What can manufacturers learn from high-growth industries?
The contents of the Excellence Test have been distilled from extensive study of more than 50 high-growth companies from both within and without the manufacturing industry. High growth often comes from the tech industry, but you don’t need to be online or work out of swanky offices – many of the core fundamentals born from these industries can be applied to manufacturing and industrial companies: