Costa impressed all the judges for “brave thinking in a market dominated by other brands” and its entry demonstrated how marketing based on consumer insights helped the brand differentiate itself from high street rival coffee shops.
The strategy seems to be paying off for the Whitbread-owned company, which recently posted a jump in underlying profits of 41.8% to £27.8m for the half year to September 1.
Caroline Harris, head of insight at Costa, says that everything the company does is underpinned by customer insight.
“It informs our strategy and validates our instinct. From continuous studies in the UK and seven key international markets, we can understand the consumer hierarchy of needs, how we perform against those and where our competitors sit.
“Four years ago, the insight team was just me. But we made the decision to bring everything we know about the customer together in one place and now a global insight manager, who is responsible for international projects, a location and planning manager, who does all the science behind where our stores go, and a customer service manager all report to me.
“We use segmentation models to understand our customers. We can drill right down to individual stores and understand, for example, what proportion of our visitors are what we would call ’relax’ visitors or ’recharge’ visitors. Underneath these two headings, we then have eight individual segment profiles, such as ’commuter’. However, these are not mutually exclusive – someone can be a commuter during the week, but a more relaxed customer at the weekend.
“This data lets us understand segments where we overindex and underindex. We can also overlay our Coffee Club data and EPOS till data to understand if a store’s customer base is ’relax’ or ’recharge’. Then we can make sure the service and design match the needs of those customers.
“A good example is our store in Farringdon, London. It is by the train station and its design used to be one till, one coffee machine and lots of comfy chairs. But we realised it was a ’recharge’ store, so we put in two tills, two coffee machines and took out the chairs. It’s all about making the right store for the right people in the right location.”