Retail Analytics

Coffee Chain Segments Loyalty Customers to Optimize Digital Advertising

Lyden Foust

|

August 27, 2020

Better Buzz Coffee Company, based in San Diego, is committed to providing consistent quality coffee beverages in a fun atmosphere, with efficient & friendly customer service.‍ 

The Challenge

With new investment from a third party, Better Buzz sought to expand their physical locations and e-commerce strategy aggressively on the West Coast. The coffee company rolled out their Black Card loyalty program with great success but had never leveraged that data to better understand and serve their customers. This analysis was conducted to achieve the following goals:

  • Identify Better Buzz’s unique & most profitable loyalty customers
  • Pinpoint those customers for new store locations and marketing
  • Enhance online loyalty program offerings tailored to the customer segment‍

The Method - Loyalty Data Analysis

Better Buzz provided a file to Spatial.ai containing the home block groups of loyalty customers along with total yearly spend* for each customer. Using a weighted average of loyalty customers, our data team compared Better Buzz’s customers to San Diego’s baseline to identify the customer cohorts that were unique to the brand.

*Spend is for demonstration purposes and does not reflect actual customer spend.

The Results - Better Buzz’s Ideal Customer

The customer segments most unique to the Better Buzz brand were Mindfulness & Spirituality, Yoga Advocates, Ingredient Attentive, Wine Lovers, and Fitness Fashion. Adding in the variable of yearly spend can give the team an additional understanding of which customers are most profitable. The chart below summarizes the results: 

  • Mindfulness & Spirituality is the most unique segment to Better Buzz but represents average spenders.
  • Wine Lovers is the most profitable segment but not highly unique to the brand.
  • Yoga Advocates is both unique to Better Buzz and represents fairly high spenders.
*Spend is for demonstration purposes and does not reflect actual customer spend.


Marketing Insights‍ & Ad Strategy

The resulting Better Buzz Geosocial Customer Profile gave the company a clear picture of their ideal customer, including their topics of interests and affinity to other brands. Equipped with these insights, Better Buzz was able to target their ideal customer across Facebook, Twitter, and other ad platforms.

Better Buzz Geosocial Customer Profile

Targeting Better Buzz's ideal customer with Twitter's advertising platform


Location Strategy

Using this information, Better Buzz also planned out their expansion and ad strategy to six markets by identifying the locations of their best and most profitable customers, and targeting them with precision. These six markets were:

  • San Diego, CA (original market)
  • Phoenix, AZ
  • Los Angeles, CA
  • Denver, CO
  • Austin, TX
  • Reno, NV

You can explore these markets on the thematic map below by using the map search bar. Light brown = high score (high level of ideal customer), Dark brown = low score (low level of ideal customer).

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