Is the $5 note the new coffee loyalty card?

On Friday April 22nd at 9:27am at a local cafe in Richmond Melbourne (for international readers) I ordered a large take-away coffee (with no extras), handed over a $5 note and they said thanks…

Thanks!!

My hand was still out waiting for the change be it any of the following – 10c, 20c, 30c, 40c, 50c, 60c, 70c and even sometimes 80c.

But no, just thanks!

This was not the airport, a resort or hotel room service… it was just a cafe in a local suburb.

I was surprised and even momentarily stunned as it was the first time it had ever happened to me in my recent short life of coffee addiction.

So, it got me thinking about how movement from coins to notes can make such an impact when the actual differential is only a range of 10c – 80c. Perhaps the behavioural economics people can shed some light on my feeling of despair when I moved from coins to notes for a coffee!

Will I adapt to this and just accept it for the fact that it is only an extra 10c – 80c from what I am used to or will I avoid it? (Answer at end of article)

And so, the $5 note is now the new coffee card. Just take 9 of these $5 notes and over 2 weeks, at 1 a day I will get my 10th $5 coffee free (after $45).

I wonder if that loyalty program would work? My opinion – no.

De-personalising the mechanism of connection to a loyalty program is one of the fundamentals of a successful “connector and collector” program (as I define them), where members collect a point, perk, carrot, coupon, credit. star…or whatever the pre-determined currency of connection is for their transaction behaviour.

Although this $5 note is a simple example we need to always remember what representation of value the mechanism is and how it reflects on the behaviour it should influence.

Ans: I won’t be going back to that cafe!

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