With a 3.6 percent coupon redemption rate for a recent mobile coupon campaign targeting competitors’ customers in Providence, RI, Dunkin’ Donuts is expanding the program to new markets.

Earlier this year, Dunkin’ Donuts rolled out the program to test the effectiveness of leveraging geofencing around competitors’ locations coupled with behavioral targeting to deliver coupons on mobile devices. The results were promising, with 36 percent of those who clicked on the offer taking some secondary action, 18 percent of these saving the coupon and 3.6 percent of secondary actions resulting in a redeemed coupon.

“Dunkin’ Donuts wanted to convert people who were either loyal to their competition or were in the middle – sometimes would go to Dunkin’ Donuts, sometimes would go to some of their competitive coffee shops or c-store properties,” said Luke Edson, vice president of national markets at YP.

“They wanted to target people and get them to come over to Dunkin’ and that was the main goal,” he said.

“On the one hand, you can be loyal to Dunkin’ Donuts while on the other hand, what is closer can matter and coffee can be a bit of a commodity. So an offer, and they made a good offer here, can be a compelling switch mechanism. “

Dunkin’ Donuts partnered with YP on the campaign.

Mobile battleground
Because Dunkin’ Donuts targets an on-the-go consumer and recognizes that the smartphone plays a key role throughout the day for this consumer, the chain has been an early active participant in mobile marketing.

In fact, mobile plays a key role in trying to gain a competitive advantage with coffee drinkers.
“They know that the mobile phone is core to that on the go experience, so mobile to them is really a battleground media,” Mr. Edson said.

Using YP’s capabilities, Dunkin’ Donuts was able to, through the use of geofencing, deliver ads to mobile users who were nearby a competitive coffee shop or c-store or a Dunkin’ Donuts.

The campaign also identified mobile users who had visited a competitive coffee shop or c-store in the past 30 days.

Behavioral profiles
The campaign ran during the first quarter of 2014, delivering banner ads to targeted devices that ran in a recipient’s favorite apps or mobile Web sites.

The banner ads featured one of several different offers, including $1 off a cup of coffee, $2 off a coffee plus sandwich meal.

Once users clicked on the banner ad, they had the opportunity to take that coupon and walk into a Dunkin’ Donuts and redeem the coupon. Or, they could save the coupon to their phone to redeem at a later date.

Users could also find the nearest Dunkin’ Donuts location and click to call Dunkin’ Donuts.

YP uses real-time bidding technology to build its behavioral profiles, looking at billions of impressions that come through mobile to identify anonymous Android and Apple device IDs. Then it logs where else it sees that ID, using GPS, Wi-Fi and IP data to determine the location of the ID.

This information is paired with YP’s map of points of interests throughout the United States. For example, it know where every Dunkin’ Donuts in America is.

These locations have a geofence placed around them so it can determine when device IDs go to these points of interest.

The middle
The results from the effort quickly showed that more users were saving the coupon rather than redeeming it right away. As a result of this learning, the campaign was optimized to deliver more impressions to audiences that were saving the coupons to bring down the cost per saved coupon.

Overall, the results suggest that the campaign was able lure consumers who are not the brand loyal to come to Dunkin’ Donuts, convincing the company to roll out similar programs in other markets.

Once the campaign recipients had interacted with Dunkin’ Donuts, this gave the brand an opportunity to encourage them to download its mobile app.

“If you were loyal to Dunkin’ Donuts, we saw pretty solid results,” Mr. Edson said. “If you were loyal to the competition, we didn’t see that great.

“If you have a location history that was sometimes you went to Dunkin’, sometimes you went to Starbucks, sometimes you went to McDonald’s, with the right offer at the right time, that was the group that saved with the highest percentages,” he said. “That was the win for Dunkin’.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York