Hidden Grounds Case Study: When Apps Meet Customer Loyalty, Magic Happens

TLDR

Hidden Grounds Coffee teamed up with Per Diem to launch an app offering special deals and a rewards program for their most loyal customers. In just a few short months, Hidden Grounds went from 200 monthly orders to over 750, with their app customers spending 15% more per order. But the real magic happened when they offered a prepay deal: $25 in store credit for $35. Their frequent customers couldn't resist, and Hidden Grounds found a clever new way to turn their daily joe into a major source of revenue. The story of how this local coffee shop boosted business by blending tech savvy and customer service will inspire you. Read on to discover their secret brew for success.

The Strategy: Build an App to Increase Customer Loyalty at Hidden Grounds Coffee

When Hidden Grounds Coffee launched their mobile app with Per Diem, they had a simple goal: give their most loyal customers an easy way to order and pay while rewarding them for their continued business. The results have been nothing short of magical.

In just 4 short months, monthly orders have skyrocketed from 200 to over 750, and revenue from the app is 15% higher on average. Their secret weapon? A $25 for $35 deal where customers prepay for store credit. Talk about a win-win.

• Customers get rewarded with free coffee and goodies. Who doesn’t love that?
• Hidden Grounds gets guaranteed business and can better forecast inventory and staffing needs.

The app makes it simple to order coffee for pickup or delivery with just a few taps. No more waiting in long lines or missing out on your usual order. And the more you use the app, the more perks you unlock.

Hidden Grounds has found the perfect blend of convenience, personalization, and loyalty incentives. Keeping customers engaged and coming back for their daily brew has allowed this local shop to expand their reach and boost their bottom line. The future looks bright for this small business thanks to the power of mobile apps and a customer-first strategy.

By meeting their customers where they are - on their phones - and giving them an easy, rewarding experience, Hidden Grounds has unlocked growth and secured their place as a neighborhood staple. The partnership between Per Diem and Hidden Grounds proves that when apps meet loyalty programs, the results can be truly magical.

The Tactic: $25 for $35 Prepaid Store Credit Offer + Loyalty Points for each Order

Hidden Grounds wanted to boost loyalty and sales, so they turned to Per Diem’s mobile app platform. The results after just 4 months have been mind-blowing.

They launched with a “can’t-miss” deal: pay $25 up front for $35 in store credit. Customers snapped it up, prepaying over $18,000 in the first month alone. With this initial boost, Hidden Grounds’ app orders skyrocketed from 200 to over 750 per month. Even better, app sales are 15% higher on average compared to in-store purchases.

• Loyal customers keep coming back: For every order, customers get loyalty points that can be redeemed for free coffee, baked goods or other rewards. The more customers buy, the more they get. It’s a win-win.
• Store credit that keeps giving: Unlike other prepaid cards, the credit never expires and balances stay on the app for customers' next visit. No more fumbling with gift cards or cash. Customers just open the app, tap, and go.
• Sales and growth insight: With the app, Hidden Grounds gains valuable data into their best customers’ habits and preferences. They know the most popular items, busiest times and days, average spend, and more - so they can tailor special offers and improve the overall experience.

By meeting customers where they are - on their phones - and rewarding them for their loyalty, Hidden Grounds turned occasional visitors into passionate regulars. Their story proves that when you combine technology with customer service, the possibilities for growth and success are endless.

The Results: 300% Increase In First-Party Orders and Higher Average Order Values

A Win-Win Scenario

When Hidden Grounds launched their app with Per Diem, neither company knew just how much of a success it would be. By focusing on a tailored loyalty program and deals to incentivize new and existing customers, Hidden Grounds was able to significantly boost their online orders in just 4 short months.

• Online orders skyrocketed by 300%, increasing from 200 per month to over 750. Their best customers, who make up roughly 15-20% of all customers, now order 2-3 times more frequently.
• The average online order rings in 15% higher than in-store purchases, at around $28 versus $24. The most popular promotion, a $25 for $35 store credit deal, accounted for 30-40% of all online orders.
• Hidden Grounds’ profit margins improved by 10-12% thanks to lower operational costs. Per Diem’s platform made it easy to scale online orders without adding significant labor costs.

A Winning Combo: Tech Plus Customer Service

While the numbers tell an impressive story, Hidden Grounds’ success really came down to a combination of technology and old-fashioned customer service. Per Diem’s white-label app made the online ordering process seamless for customers. But Hidden Grounds also focused on personal touches, like handwritten thank you notes and special perks for their most loyal customers.

“The app got people in the door, but our customer service brought them back and turned them into evangelists,” says Hidden Grounds’ owner Jenny Cho. “We had customers telling friends, posting about us on social media, and even writing glowing reviews just because of how well we treated them.”

• Cho credits her staff for going above and beyond to build real relationships with customers, both online and offline. Small courtesies and personal interactions make people feel valued in a way that technology alone can’t always achieve.
• When tech and hospitality work together, the end result is a winning combination for any business. Hidden Grounds’ success proves that while online ordering is the future, customer service will never go out of style.

The Key Metric: Customer Frequency Skyrockets

Hidden Grounds launched their mobile app and loyalty program with Per Diem just 4 months ago, but the results have already exceeded expectations. The key metric—customer purchase frequency—has skyrocketed, driving a nearly 300% increase in monthly orders.

App Sales Outpace In-Store

• App sales are 15% higher than average in-store ticket sales. Customers love the convenience and deals offered through the app.

Pre-Pay Deal Drives Frequency

• Hidden Grounds’ most successful tactic has been offering $25 in store credit for $35 when customers prepay. This incentivizes customers to visit more often to redeem and spend their credit.

Targeted Campaigns Keep ‘Em Coming Back

• Hidden Grounds uses Per Diem’s tools to send ultra-targeted email campaigns to their best customers based on purchase history and preferences. This personalized outreach has been crucial to increasing the frequency that loyal customers visit and order.

The Frequency Formula

• The formula is simple: # of orders from unique customers / time period = frequency. Hidden Grounds has grown monthly frequency from under 3 orders/customer to over 5 orders/customer in just 4 months. This metric is the key to their success.

What’s Next?

• With frequency on the rise, Hidden Grounds plans to roll out additional in-app offers and push notifications to drive their new loyal customers to order even more often. They’re also optimizing their in-store experience based on app data to convert more one-time visitors into app-using regulars.

The early success of Hidden Grounds’ app and loyalty program proves that when you meet customers where they are—on their phones—and give them reasons to come back again and again, magic happens. Frequency fuels growth, and growth means more coffee, more often, for Hidden Grounds’ happiest customers.

The Lesson: Convenience and Deals Drive App Success

The key takeaway from Hidden Grounds’ app success is clear: convenience and deals are what customers crave. By offering special discounts and promotions exclusively through their app, Hidden Grounds gave customers a compelling reason to download it and keep coming back.

Discounts Drive App Adoption

Hidden Grounds’ most successful tactic was offering app users a $25 for $35 store credit deal. This deal essentially gave customers free money to spend, so of course people jumped at the opportunity. Once customers had the app to claim that initial offer, Hidden Grounds was able to market future deals and promotions directly to them. This strategy helped quickly build an engaged user base of deal-seeking regulars.

Exclusive Perks Keep Customers Loyal

Hidden Grounds also offered app users gift cards, free Coca-Cola, and Coca-Cola coupons that could only be scanned and redeemed in-store. By providing special perks that could only be accessed through the app, Hidden Grounds gave customers an incentive to keep using it whenever they visited or made a purchase. These exclusive deals and discounts turned app users into loyal, repeat customers.

Convenience is King

At the end of the day, what customers value most is getting time back and avoiding hassle. By allowing orders to be placed directly through the app for pickup or delivery, Hidden Grounds provided an incredibly convenient experience for their customers. Rather than waiting in a long line to order and pay, customers could place an order at their leisure and stroll in to grab their coffee or have it brought right to them.

The success of Hidden Grounds’ app proved that when you meet customers’ desire for deals and convenience, loyalty and business growth will follow. By keeping their app rewarding and useful, Hidden Grounds turned occasional visitors into passionate regulars and grew their monthly orders nearly fourfold. The lesson is clear for any business looking to build a loyal customer base: make it easy, make it rewarding, and the customers will come.

Final Thoughts

So there you have it, a small coffee shop that took a chance on technology and saw huge rewards. By partnering with a startup like Per Diem, Hidden Grounds was able to quickly build an app that gave their customers a fast, convenient way to order and pay while keeping them engaged through loyalty programs and special offers. If you own a small business, this case study shows what's possible when you meet your customers where they are - on their phones. Think about ways you can use technology to strengthen relationships with your best customers and attract new ones. You might just find that magic happens for your business too.