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Kung Fu Tea Infuses Location Loyalty With Fan Competition For Black Belts And Beverages

Kung Fu Tea’s Refer-A-Friend program pulls in 12x more registrants than the average industry referral program, leading to an ROI of 288 percent, says KFT Marketing Manager Mai Shi.

In case you weren’t aware, Monday April 30 is “National Bubble Tea Day.” In addition to highlighting the latest hashtag holiday for its signature menu item, Kung Fu Tea will be celebrating the beverage chain’s eighth birthday.

In the lead up to this auspicious date, NYC-based Kung Fu Tea has already been ramping up its online-to-offline marketing as one of the beta testers of Waze Local, a program that offers the Google-owned crowdsourced navigation app’s ads to SMBs.

While a little larger than most SMBs, Kung Fu Tea has been using Waze Local to promote 16 of its franchises.

“In December 2017, we saw a 30 percent increase in navigations to our Springfield, IL Kung Fu Tea location through the power of our Waze Local advertisements,”  Mai Shi, Kung Fu Tea’s marketing manager, told GeoMarketing last month. “Over the course of three months, more than 5,500 drivers were navigated straight to the front doors of 16 Kung Fu Tea locations via Waze Local.”

In addition to working with Waze, Kung Fu Tea has been working on a number of digital efforts as it seeks to expand its marketing programs over the next year.

GeoMarketing: How many US locations does Kung Fu Tea have?

Mai Shi: Kung Fu Tea currently has 150 locations across the U.S. We also have 2 locations in Melbourne Australia. One in Canada, and two in Vietnam.

How did Kung Fu Tea decide to work with Waze Local?

We think Waze local is a great way of raising brand awareness and drive foot traffic to our different stores across U.S.

Had Kung Fu Tea used Waze advertising products and services before?

We used Waze’s advertising services for our corporate locations.

What are your initial goals for using Waze Local?

  • Increase brand awareness among locals
  • Drive foot traffic to stores
  • Encourage product trial since not many people are not familiar with the entire bubble tea category

How important is Kung Fu Tea’s app and loyalty program when it comes to generating store visits?

Kung Fu Tea’s loyalty program is at the heart of our brand. Not only because we want to leverage the loyalty program to generate store visits or improve sales, but also the loyalty programs provide us valuable insights about our customers. And we can learn from those insights and better serve our customers.

We also feel it’s crucial to make our customers feels they belong to a community. By having our Kung Fu Tea app on their phone, we hope to incentive the customer to think of us first.

And we hope that loyalty is able to create a clear, direct and personal conversation with our brand image. We want the customers to make them feel like they’re our partner and friend. With that mindset, we are able to achieve these results:

Kung Fu Tea sees nearly 175 percent more monthly active users per location than non-LevelUp brands in the same vertical with an app (see image below).

 

Source: Kung Fu Tea

 

Active users translate to more revenue.

Increased Frequency: A 2016 Statista survey found that only 20 percent of U.S. consumers visited a quick service restaurant at least once a week, while 17 percent visited once per month. Thanks to added convenience and loyalty rewards, Kung Fu Tea’s app leads to greater customer engagement: in fact, compared to the industry average, two times as many customers visit Kung Fu Tea once a week, and 90 percent of their customers visit once per month.

That’s also why we saw a huge success in our RAF program:

Kung Fu Tea’s Refer-A-Friend (RAF) program pulls in 12x more registrants than the average industry RAF program, leading to an ROI of 288 percent.

We’ve also had success with beacons.

If a customer downloads the app but hasn’t yet transacted, Kung Fu Tea sends a push notification to those who walk within the general vicinity of a KFT location.

“Did you know that you can pay with the app at Kung Fu Tea?”: This simple notification has driven 41 percent of those new users that received the message to transact, bringing in additional revenue.

When designing and making adjustments to the in-app rewards program, we consider the various types of activities in which our consumers would participate. For example, rather than a simple “first level, second level, third level” structure, we decided to go with different belt levels—which ties in well with the Kung Fu brand and is more engaging for our consumers.

As with Kung Fu, the consumer is striving for the next best “belt level,” and with each visit, they’re a step closer toward meeting this goal. Additionally, each ascending belt level comes with its respective benefits. Combining brand elements with this unique rewards structure, we’ve made the Kung Fu Tea app relevant, exciting, and encouraging (in terms of generating store visits).

How long has Kung Fu Tea had a loyalty program and how has it evolved?

We started the loyalty program from a stamp card and now we have evolved into a mobile app and constantly trying to update the app.

Kung Fu Tea updated their app to include a new home screen, new loyalty program and design, and Popdeem for social interactions, and more. Popdeem is a great way to take advantage of their guests’ natural tendency to share.

Kung Fu Tea started leveraging LevelUp’s partnerships with Chase Pay and Yelp as two additional digital channels to drive new customer acquisition.

Looking ahead at the rest of 2018,  what are the most important initiatives that Kung Fu Tea plans to take in terms of its digital strategy and online-to-offline marketing?

As I mentioned earlier, the most important initiatives will be our Kung fu Tea app from a digital strategy perspective. We are also planning a large scale YouTube advertising program starting on June which will further help to provide valuable insights about our potential customers.

How does Kung Fu Tea partner with Yelp?

We understand the power of customer reviews and it also provides us insightful data about our different locations.

Are you using Google My Business and Google Maps to drive store visits?

Not right now.

What about Snapchat and Facebook?

We started using Snapchat filters in the beginning of this year. We’ve created filters for the Super Bowl, Valentine’s Day, St. Patrick’s Day, Chinese New Year, and Easter. For the Super Bowl, we made separate filters for Philly and Boston, each targeted to areas in which our stores are located.

Facebook’s Event Page and Frames are features we consider using in the future. We’ve used Facebook Ads in the past to promote the launch of our merchandise collection.

Do you use Instagram Stories and the Instagram order-and-call feature? 

We’ve used Instagram Stories to announce giveaway winners, ask our followers questions regarding products through a poll format, and promote our merchandise along with a unique promo codes. We think Instagram Stories is a great medium to instantly and authentically engage with followers.

Does Kung Fu Tea use on-demand delivery platforms like Postmates or Seamless? If so, how do you evaluate which ones make sense to use? If not, why and do you expect to use use any delivery services in the next year?

We hope to launch our online ordering function soon. Timeline is TBD.

Two aspects are evaluated when choosing delivery platforms:

  • Customer Service (responsiveness to customer concerns and feedback)
  • User Interface/Experience – easy to use

How do you regard the rise of voice-activation through digital assistants like Alexa, Google, Cortana, Bixby, Siri, others? Does Kung Fu Tea use any of those platforms to promote discovery and information about stores? If not, any plans to explore voice activation in 2018?

Not right now, we do enjoy voice-activation and plan to look into it as a marketing channel.

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.