Thursday, January 11th, 2024
A few weeks back, cofipass partnered with Zara Exotics to host its first ever “Cars & Coffee” event at Cuvée Coffee in Austin, Texas. We had over 30+ attendees show up to taste premium-grade espresso coffee drinks, meet exotic car owners, and try our latest product: cofipass Rewards.
Introducing cofipass Rewards
cofipass Rewards provides independents shops with a vertically integrated loyalty and rewards program that enables SMBs (small to medium size businesses) to achieve three main business objectives:
Pivoting from Reservations to Rewards
After testing demand with our initial product, cofipass Reserve back in Fall 2023, we learned a great deal about what users truly want in their day-to-day shopping experience at independently-owned coffee shops like Cuvée Coffee. It was clear that while a dynamic search indeed helps users find the best coffee shops, reservations at coffee shops are a rather novel product experience for users.
Chatting with a few venture capital investors revealed where we’ve needed to turn our focus: transactions. While the TAM (total addressable market) for a reservation product is tied to remote work spend (e.g. DeskPass, WeWork, other smaller coworking space memberships), the ceiling for a transaction-based FinTech solution is considerably higher.
Learning from the best: Starbucks Rewards
Take Starbucks Rewards for instance, the gold standard for vertically-integrated rewards programs. A study by UIUC reveals just how expansive Starbucks’ program has become, eclipsing over $11 billion in cash loaded directly by customers into mobile Starbucks Cards. Porting its classic Gift Card offering into a digitized mobile wallet, Starbucks has created a seamless product experience for coffee lovers across the globe while standardizing the loyalty and rewards “game” that people know and love.
We’ve taken note of Starbucks and other successful in-house loyalty and rewards programs like Chic-Fil-A and Sephora. The notable takeaway from all of these programs is that shops that constantly engage with customers in the form of providing tangible incentives do better financially, pushing the upper bound on how much each customer spends.
Boosting spend with cofipass Rewards
Through out the cofipass Rewards roll out, we have already seen some promising metrics, including boosting average transaction volume from ~$7 per transaction to ~$13, representing an almost ~2x increase in spend. In a world where customers have so many options for coffee, we’ve decided to make our accrual system “shop agnostic,” meaning customers receive “beans” (rewards currency - e.g. Stars, Coins, Points) across the cofipass Partner network of shops.
In exchange for participating in our network of cofipass Rewards shops, each cofipass Partner cafe gets access to their own Loyalty & Rewards infrastructure to deploy targeted incentives. One example is the manager’s special, where Cuvée’s shop manager decides her own monthly incentives that can be redeemed during a “check-in” (e.g. 20% off your latte, one free add-on, $3 off retail beans).
Exploring SMB-friendly pricing options
By harvesting transaction data each time a cofipass user spends at any shop, we are able to extract meaningful insights regarding customer spend broken down by demographic and provide this data back to the coffeeshop, empowering shop managers to make more salient business decisions while executing a world-class coffee operation.
One main area of focus for us entering Spring 2024 is how we think about monetization. While we have historically only charged a “transaction fee” per incentivized transaction, we are interested in offering a tiered suite of software solutions to our cafe Partners in exchange for a monthly fee. For instance, we could offer basic Rewards access and one incentive a month for for free in our “Drip subscription,” while offering more salient customer engagement solutions like SMS outreach, email campaigns, and in-app notifications with a more premium “Espresso subscription.”
Getting involved with cofipass
If you are an investor, designer, or engineer, we would love to chat. Please don't hesitate to find time on my calendar here.
If you are a student at a university or college and want to learn more about our upcoming student ambassador program, please write me a note at [email protected] with some initial information about yourself and the school you are studying at.
And of course, if you are looking for a work-friendly coffeeshop, click the button!
founder & ceo