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Brand Wars? Dunkin’ Donuts Takes Aim At Starbucks With New ‘Stars’ Promo

Customers who join DD’s loyalty club in April can get an extra 125 points with the code STARS.

Talk about a caffeine kick: Dunkin’ Donuts appears to be taking a swing at Starbucks with its new “Stars” promotion, offering bonus points towards free beverages for people who enroll in the brand’s rewards program in April — a move that happens to coincide with an update to the Starbucks Rewards app.

Starbucks new program gives members more “Stars” based on what they buy, regardless of how often they visit, which are later redeemable for a free drink. But for its part, the new Dunkin’ app lets joiners use the code “STARS” to get an automatic 125 points towards any free beverage — plus bonus points during their second and third visits, effectively making it so that they will get a free drink at Dunkin’ faster than they ever could at Starbucks.

Shots Fired

All in all, competition of this sort is to be expected between brands; loyalty programs are a major way that companies deliver the personalized experiences that customers crave — and since providing rewards faster is key to attracting Millennials, DD appears to be building on a smart strategy.

Still, the fact that DD chose to brand the promotion with the word “Stars” is raising a few eyebrows. The chain looks to be communicating not just that it has a compelling rewards proposition, but that its rewards are better — and come faster — than those of its competitor.

Will Starbucks fire back with a cheeky response? Well, it’s unlikely that we’ll see the coffee giant running a promotion with the code “DUNKIN” — but we can always keep our fingers crossed.

Local Loyalty

Brand wars aside, rewards club promotions are particularly effective because they drive traffic to local store locations with a concrete purpose. Consumers understand what they’re getting and where to go for it, even if the effort is part of a larger national strategy as well.

“Local today is both ‘geography’ and ‘individual,’” John Costello, president of global marketing and innovation for Dunkin’ Brands, told GeoMarketing last month. “This is what we mean by the [classic goal] of getting the right message to the right consumer on the right device. And the loyalty that consumers have is not to Dunkin’ as a global food services company: it’s to their local Dunkin’ Donuts of Baskin Robbins.”

Whether or not the new Stars promo actually wins customers away from Starbucks, it’s a smart bet for capitalizing on the loyalty that consumers have to their local store.

“[We honor] our extremely loyal fan base by making it seamless and affordable to earn free beverages quickly,” said Sherrill Kaplan, VP of digital marketing and innovation at Dunkin’ Donuts, in a statement about the Stars effort. “With 4.3 million DD Perks members, we look forward to welcoming new guests and rewarding them with even more points to keep them running on Dunkin’.”