Loyalty
If you follow me on Twitter you may have noticed one of my favourite places to chill out is the Newcastle Clayton Street East branch of Caffè Nero. The coffee is nice there — though I like a latté, so perhaps I should say the coffee-flavoured warm milk is nice, though not always, as it can taste like a recently resurfaced road (this is barista specific so it is possible to avoid by walking straight back out the door on spying an offender) — but the main reason I return so often is the café’s situation in one of the few Georgian buildings in the town centre where the internal structure remains largely intact. There is abundant light, being as it is a corner building with multiple sash windows (original) reaching from a foot above the floor to ceiling height along two external walls, while comfy chairs litter the upper level. Music is compulsory and usually consists of Bossa Nova, bad jazz or Classical. The latter’s apparent three-plus generations of mp3 encoding makes for some particularly uncomfortable listening.
Like just about every other so-called “gourmet” coffee house, Caffè Nero has a loyalty card scheme. Such commercial sleight of hand would normally deter me from dealing with a company, being as it is IMHO deceptive and dishonest. Sticking with an establishment should be a matter of customer choice, inspired by good service and a high quality product at a competitive price, not by the promise of something for nothing after having first spent money on nine similar items. On the assumption companies do not give away anything for free, we could say that while the pretence here is one of being rewarded for continued custom, we can be reasonably certain the cost of the tenth coffee has been accounted for as a distributed loss across the prior nine coffees purchased. If that were the case, the customer would gain nothing in return for their loyalty. Let’s see how much a coffee would cost if the loyalty scheme was not in place.
Taking as an example the ordinary coffee-flavoured warm milk (these days I drink decaffeinated coffee, which is 10p extra):
1 latté = £2.55
The cost of the 10th latté distributed across the previous 9 is
£2.55 / 9 = £0.28 per latté
So the retail price without the loyalty scheme would be
£2.55 – £0.28 = £2.27
This is a very simplistic way of looking at it as in practice such dents in potential profit can be offset in a variety of ways, however it serves to illustrate the subterfuge. They get a regular customer, regular customer gets coffee that’s still too expensive.
So what to do? Well, my thoughts are I could either accept that I am essentially paying £2.27 for every latté I drink at Caffè Nero, which would be a lot easier if certain members of their staff didn’t sneer and look put out when they see you’re getting “a free one”, or I can buy coffee at an independent coffee shop where a latté costs less than £2.27, as I frequently do at the excellent Settle Down where the price is £1.90. Yes, look at me! I still have free will!
A third option, which I began thinking about after wondering why many Nero employees appear a bit down, grumpy or unable to engage in polite conversation of the type more easily found in independent cafés, is to accept that I was always willing to pay an extortionate amount for a drink and should therefore deposit the full price of the 10th latté into the tips cup, thus helping Caffè Nero redistribute some of their wealth to their overworked and underpaid baristas. If you’re a regular customer there, I strongly suggest you consider doing the same.
And if you double-stamp my card…
