How Dunkin’ Donuts Continues to Stay Relevant in a Competitive Industry

If you need a coffee to survive your day, your options for where to get your caffeine fix are nearly limitless. But even with the rise of the local, artisanal shops, amped-up efforts by fast food outlets like McDonald’s and the proliferation of environmentally dubious single-serve machines, there’s still a pretty good chance you grab your brew at either Dunkin’ Donuts or Starbucks.

Make no mistake, though—both of these companies have very distinct brand identities. You have the average Joe brand with its friendly pink and orange logo versus the more upscale-seeming West Coast player with its fancy names and laptop-wielding hipster crowds.

While the brands appear to be worlds apart, they do have some things in common. Both began as regional brands, with Dunkin’ Donuts starting in 1950 in the Northeast and Starbucks launching in 1971 in the Northwest. Both built a devoted following among locals before expanding their empires across the United States and all around the globe. Japan was the first international stop for both—Dunkin’ Donuts opened its Tokyo outpost in 1970 and Starbucks followed in 1996.

But that’s where their similarities end. No matter which coffee shop you prefer, one thing is clear, Dunkin’ Donuts knows how to hold its own in a Starbucks-crazed world. Today, with nearly 11,000 restaurants in 33 countries, the brand owns roughly 24 percent of the country’s coffee market. They’ve also emerged as one of the largest coffee and pasty chains in the world—and they’re only expected to keep growing. And according to John Costello, the President of Global Marketing & Innovation for Dunkin’ Brands Inc., that impressive upward trajectory is due, in large part, to the brand constantly tweaking their approach, products and customer engagement.

That’s why, for Costello, it’s important to continually update the brand’s 66-year-old recipe year after year—starting with how the company interacts with its customers.

“The bottom line is that, while the way consumers learn about brands, consume information, and decide where to buy brands has changed over the years, they are still looking for better solution to their everyday challenges,” Costello said in an interview with Social Media Today.

This means that Dunkin’ Donuts is always using technology to adapt to fast-changing times and changing markets. To that end, Dunkin’ Donuts has spent the past few years focusing on and updating their website and increasing social media engagement with customers. Mobile has also become an important cornerstone of their advertising strategy, which now includes online ads, emails, and, most importantly, a loyalty program—an app that has been downloaded more than 16 million times since launching in 2012. The loyalty program lets customers use Apple Pay, win loyalty items and give gift cards simply by presenting a barcode to be scanned in store.

Most recently, Dunkin’ Donuts swooped in on an opportunity to steal Starbucks’ customers after the brand announced changes to Starbucks Rewards back in February. The same day that Starbucks announced that it’d take 125 stars to get a free drink, Dunkin’ Donuts said it would offer users the opportunity to earn 125 extra points on each of their next three visits by using the code “star.” Dunkin’ Donuts loyalty members usually earn five points per dollar spent, and get a free drink for every 200 points earned.

“Our guests are the cornerstone of our brand, and we are committed to continuing to exceed expectations. Our DD Perks Rewards program, recognized as one of the most robust and fastest-growing programs of its kind in our industry, honors our extremely loyal fan base by making it seamless and affordable to earn free beverages quickly,” said Sherill Kaplan, vice president of digital marketing and innovation at Dunkin’ Donuts, in a press release.

Dunkin’ Donuts’ mobile initiatives also involve leveraging partnerships and technology to launch a number of promotions. One of these initiatives includes a partnership with Zynga’s “Running With Friends” app. Designed to integrate their products into consumers’ everyday lives, Dunkin’ Donuts provides in-game advice and “coffee boosts” to encourage players to compete with friends on the leaderboard. Guests can also earn 500 free “gems” to use during game play for checking in to a local Dunkin’ Donuts.

“Our team has done a good job of balancing what has worked in the past with innovation. We conduct very sophisticated ROI analysis on our marketing plans, but we also encourage our teams to try new things, such as our digital billboard in Times Square for Dunkin’ Donuts or our viral soft-serve video on Facebook with Baskin-Robbins,” Costello told Social Media Today. “Overall, we’re very pleased with the response to our mobile initiatives. The success of these programs supports the importance of taking a 360-degree approach and thinking thoughtfully about the best platforms that will help us to engage with Dunkin’ Donut guests.”

But even as mobile trends come and go, Costello says there is one constant when it comes to keeping the Dunkin’ Donuts brand relevant—listening to the customer. And that sentiment is evident in just about everything the brand does.

“We operate in many different countries, in many different culture, but we find the principle of understanding what our consumers want remains a constant around the world,” Costello said.