Editor’s note, May 2026: This article was first published in October 2024. We updated it to reflect current Costa Club benefits and answer the question, “Do loyalty programs work?”

In attempting to answer the question, “Do loyalty programs work?”, this article explores Costa Club and Costa’s loyalty strategy. It examines key performance indicators and provides useful insights for loyalty consultants, marketing managers and CMOs.

The café industry is highly competitive, meaning businesses are constantly seeking ways to retain customers and boost sales. Costa Coffee, a prominent player in the industry, has implemented a highly effective loyalty program that is generating significant benefits for the company. Costa Club offers free drinks, birthday treats, Treat Drops, Swaps and reusable cup incentives. These benefits reward frequent customers and encourage repeat visits.

The Evolution of Costa Coffee’s Loyalty Program

Costa Coffee has been at the forefront of customer loyalty programs in the coffee industry. Since its inception in 2010, Costa Club has undergone significant changes to adapt to the evolving market and customer expectations.

From points to Beans: simplifying the rewards system

The original Costa Club, launched in March 2010, was an early points-based loyalty program in the café industry. It offered customers five points for every £1 spent in stores, with each point worth 1p. This system, while innovative at the time, became increasingly complex and less appealing as the market grew more competitive.

Recognising the need for change, Costa Coffee revamped its loyalty program in 2021. The revised program design replaced points with Beans. This shift aimed to simplify the reward process and make it more engaging for customers. Under the revised program, members earn one Bean for every handcrafted drink purchased, regardless of its price. This change has made the program easier to understand and more straightforward for customers to track their progress towards rewards.

Increased generosity: Free drinks and birthday treats

The transition to the Bean-based system has also resulted in increased generosity from Costa Coffee. Previously, customers needed to accumulate a significant number of points to earn a free drink. With the current Costa Club, members can claim a free drink after collecting 10 Beans. This change has substantially reduced the amount customers need to spend before receiving a reward, making the program more attractive and accessible.

Costa Coffee has further enhanced its loyalty offering by introducing additional perks. One notable addition is the birthday treat, where members receive a free cake from the sweet counter on their birthday. This personal touch adds a sense of celebration and appreciation for loyal customers.

Costa Club now also includes Treat Drops and Swaps. Members can exchange two Beans for selected drink customisations.

The company also offers a sustainability incentive. Members using reusable cups earn an extra Bean with each eligible drink. This means they can earn a free drink after five reusable cup purchases.

Digital transformation: The Costa Coffee app

A crucial aspect of Costa Coffee’s loyalty program evolution has been its digital transformation. The introduction of the Costa Coffee app has played a significant role in modernising the customer experience and streamlining the rewards process.

The app serves as a digital hub for the Costa Club. Members can easily track their Bean balance, redeem rewards, and access exclusive offers. It has also enabled features such as click-and-collect and contactless ordering, enhancing convenience for customers.

One of the app’s key features is Bean collection at Costa Express machines. Costa says members can collect Beans at 11,000+ Costa Express machines in Great Britain. This expands the loyalty program beyond traditional store locations.

The digital platform has also paved the way for more personalised marketing efforts. Costa Coffee tailors offers and communications based on individual customer preferences and behaviours, creating a more engaging and relevant experience for each member.

Costa reported strong app uptake after the relaunch. At the time, more than 70% of Costa Club transactions were made through the updated app. This shift towards digital engagement has not only improved the customer experience but has also provided Costa Coffee with valuable data insights to further refine its loyalty strategy.

Through these changes, Costa Coffee has made its loyalty program more customer-centric, digitally driven and rewarding. The simplified Bean system, increased generosity, and digital integration have all contributed to making Costa Club a key differentiator in the competitive cafe market.

Do loyalty programs work? Costa Club performance indicators

To answer “Do loyalty programs work?”, Costa Coffee’s loyalty program can be assessed through several key performance indicators.

Growth in total transactions

One of Costa Club’s strongest reported indicators is a 16% increase in total transactions after the relaunch. Industry coverage also reported £1.2 million in incremental profit each month. These results help answer the question, “Do loyalty programs work?”

These figures are not current 2026 results. However, they remain useful evidence of how Costa Club improved customer engagement.

Increase in app-based transactions

Costa’s digital transformation led to a clear shift in customer behaviour. As detailed earlier, more than 70% of Costa Club transactions were made through the app after the relaunch. This high adoption rate streamlined the customer experience. It also gave Costa valuable data insights to refine its loyalty strategy.

Boost in repeat visits and additional purchases

Costa Club has proven effective in encouraging repeat visits and additional purchases. Relaunch coverage reported that free coffee redemptions accounted for 8% of all transactions. They also accounted for 23% of app transactions. The birthday treat offer also performed strongly, with 60% of members making another purchase when claiming their free cake. It also reported that 71% of customers who redeemed their birthday cake returned to Costa within a month.

These KPIs show how Costa Coffee’s loyalty program drove customer engagement, increased sales and supported brand loyalty. Costa Club has used digital technology and personalised rewards to create a more engaging customer experience. As the program evolves, these metrics can guide future improvements to Costa Coffee’s loyalty strategy.

The power of freebies: driving customer behaviour

Costa Club has demonstrated the significant impact of freebies on customer behaviour. By offering complimentary drinks, birthday treats, and sustainability incentives, Costa Coffee has successfully encouraged repeat purchases and fostered customer loyalty.

Free drinks as a motivator for repeat purchases

Costa Club’s Bean-based reward system has proven to be a powerful motivator for customers to make repeat purchases. The effectiveness of free drinks as a loyalty tool is evident across the coffee industry. Starbucks provides a useful industry comparison, although it reports loyalty metrics more publicly than Costa. In 2026, Starbucks Rewards had more than 35 million active US members. Rewards members also drove nearly 60% of US company-operated revenue. Similarly, Caffè Nero offers a free drink for every nine stamps collected.

Costa’s strategy of offering a free drink after just 10 purchases has made earning rewards more accessible and appealing to customers.

Birthday treats encouraging additional spending

The Costa Club birthday treat appears to be particularly effective.

The power of birthday freebies has been demonstrated by other brands as well. For example, Krispy Kreme offers a free doughnut to members during their birthday month, while Greggs provides a free cake or doughnut to loyalty scheme members. These birthday treats not only create goodwill but also drive footfall and additional spending.

Sustainability incentives: Rewards for reusable cups

Costa Coffee has made sustainability a key part of its revised loyalty proposition. As detailed earlier, members using reusable cups earn an extra Bean with each eligible drink. Costa has said members using reusable cups visit more often and spend more heavily.

This sustainability-focused approach has increased engagement with the loyalty scheme. Costa also benefits from linking loyalty rewards with environmental behaviour.

Other coffee chains also use sustainability incentives. Starbucks offers a discount for reusable cups, while Pret A Manger offers 50p off.

Costa Coffee uses free drinks, birthday treats and sustainability incentives to drive customer behaviour. Costa Club benefits have successfully encouraged repeat purchases, increased customer spending, and fostered a sense of loyalty among its members. As the coffee industry continues to evolve, these strategies will likely remain crucial in maintaining and growing customer loyalty.

Conclusión

The Costa Coffee loyalty program has shown its effectiveness in driving customer behaviour and boosting sales. By offering free drinks, birthday treats and sustainability incentives, Costa encourages repeat visits and customer loyalty. The simplified Bean system, increased generosity and digital integration make Costa Club a key differentiator.

As the coffee industry continues to evolve, loyalty programs like Costa’s will likely remain crucial to maintain and grow customer loyalty. Costa’s reported transaction growth and incremental profit show the impact of effective loyalty program design. Do loyalty programs work? Costa Coffee continues to demonstrate that they do if designed and executed using best-practice principles.

Do Loyalty Programs Work? Explore other examples of winning loyalty programs here.