How University of Montana perked up coffee sales

When The Market, a large retail store and cafe, closed for renovations two years ago, the dining team at the University of Montana questioned whether the concept could keep the price of drip coffee at $1 when it reopened.

Raising the price would cause an uproar among students, the team reasoned, while keeping it at $1 could mean other coffee spots on campus would need to lower their prices—potentially putting pressure on revenues.

The solution lay in a loyalty program dubbed the Dollar Coffee Club, which was devised by Sustainability Director Trevor Lowell and debuted in January 2018. The cost of entry is minimal: To join the club, customers buy a sticker for $3.

Drip coffee and tea is just $1 for club members, so long as they use their own mug and show the sticker to the cashier when checking out. Members can purchase unlimited $1 cups at all five campus coffee shops, and stickers are good for an entire semester and the following break. (Drip coffee normally costs $1.75 to $2.25.)

Dining Services Director Camp Howard says he knew this program would work. “The key is to create repetitive guest patterns,” he says. “And when they come in to get their reasonably priced coffee, they’re often buying something else, too.”

A win-win-win

The program’s benefits go beyond building loyalty: Dining services places 100% of revenues from the sticker sales into a fund that the team uses to award students with sustainability scholarships. With more than 1,000 stickers sold each semester, the scholarship program raised close to $12,000 in its first two semesters, and is on track to raise the same amount in its third.

“We heavily publicize the [scholarship] application process, then celebrate the awardees through print and digital media,” Howard says. “Past awardees become walking advertisements for the program and the real-life impact it has.”

A complement to its sustainability scholarships, the Dollar Coffee Club also puts eco-friendliness into practice. The coffee and tea sold to customers using their own mugs increased 14 percentage points after the program was initiated—equal to 3,000 disposable cups and lids that didn’t end up in the landfill. Before the program started, the percentage of coffee drinks sold in reusable mugs was 45% of all coffee drinks sold. Since the program began, that amount increased to 50% in established coffee operations, and 52% in the new Market.

“The stickers are a ubiquitous reminder of the program and the department’s sustainability commitments, as each sticker includes the web address for our sustainability website,” says Howard.

Positive image

Lowell reports that despite decreased enrollment at University of Montana and the opening of The Market, overall coffee sales have increased at the school’s original coffee shops. Plus, adds Howard, the resources required to implement the program were minimal and primarily consisted of team members’ time, since the stickers and marketing collateral are easily produced in-house or procured from outside vendors.

The Dollar Coffee Club has also allowed UM Dining to pivot what could have become a negative public relations situation into a positive and well-loved program, without having to drastically lower coffee prices across the board.

“UM Dining has received a great deal of goodwill from the campus community in response to this program, and it has brought praise for being student-focused and environmentally aware,” Howard says. “People are proud to display our stickers, as it’s an opportunity to show they share the same values, which helps reinforce a sense of community around sustainability.”