In 2003, Insomnia Cookies was founded by Seth Berkowitz, a University of Pennsylvania college student seeking a late-night sweet treat—a shared need that turned into an opportunity for Berkowitz on the UPenn campus. He baked cookies in his college house kitchen and delivered them to hungry students in the early hours of the morning.
The brand now counts two decades of serving up delicious cookies to customers, with nearly 300 stores across the U.S. and a couple in the U.K. and Canada. Select stores are open late—sometimes until 3 o’clock in the morning— depending upon the night. The cookies are served warm, and brand fans can also order ice cream to accompany baked treats.
Mark Johnson, CEO of Loyalty360, spoke to Tom Carusona, Chief Marketing Officer of Insomnia Cookies, about launching a new loyalty program, understanding customer segments and how to activate them, and tapping into emotional loyalty.
In 2003, Insomnia Cookies was founded by Seth Berkowitz, a University of Pennsylvania college student seeking a late-night sweet treat—a shared need that turned into an opportunity for Berkowitz on the UPenn campus. He baked cookies in his college house kitchen and delivered them to hungry students in the early hours of the morning.
The brand now counts two decades of serving up delicious cookies to customers, with nearly 300 stores across the U.S. and a couple in the U.K. and Canada. Select stores are open late—sometimes until 3 o’clock in the morning— depending upon the night. The cookies are served warm, and brand fans can also order ice cream to accompany baked treats.
Mark Johnson, CEO of Loyalty360, spoke to Tom Carusona, Chief Marketing Officer of Insomnia Cookies, about launching a new loyalty program, understanding customer segments and how to activate them, and tapping into emotional loyalty.
Good afternoon, good morning. This is Mark Johnson from Loyalty360. I hope everyone's happy, safe and well. I want to welcome you to another episode of our Leaders in Customer Loyalty series. We speak with leading brands about what they are seeing on the front lines of customer channel and brand loyalty. Today we have the pleasure of speaking with Tom Carasona. He's the Chief Marketing Officer of Insomnia Cookies. Tom, how are you today? I'm doing great Good to see you again. Mark Nice to see you as well. For those who may not be familiar with Insomnia Cookies, can you tell us a little bit about your role at the organization and give a brief background to the company?
Speaker 2:
as well.
Speaker 2:
Sure, I'll start with the background. So Insomnia Cookies was started by a college student back in 2003 at the University of Pennsylvania, really born out of a shared need that a lot of people have for just a late night sweet treat cookies on campus and handing them out, and quickly saw that there was a lot of excitement and love for the brand and since then we've been growing ever since, for the last 20 years. So we've got almost 300 stores across the country, with a couple in the UK and Canada and, you know, continuing to grow really strong. We're open late. That's kind of our big thing open late, you know, one or three o'clock in the morning, depending on the night, and we serve warm cookies. Our cookies are always served warm and delicious cold ice cream as well.
Speaker 2:
In my role here, I'm the chief marketing officer, so I lead the brand and the marketing, our kind of go to market strategy and everything that you would assume fits into that as well as cookievation, everything that you would assume fits into that as well as cookievation. So that's our food and our menu and a b2b sales team.
Speaker 1:
Okay, excellent. Uh, you recently launched, uh, insomnia rewards. Uh, it's your new customer loyalty program design, obviously to enhance your relationship with the customers, provide some perks and drive uh, you know, emotional. Hopefully, can you tell us a little bit about the rewards program, how it works, how customers engage with the program?
Speaker 2:
Yeah, sure so, and let me start by saying we actually had a loyalty program that had been live since long before I started here, and it was a really great program in that it was simple, but the problem with it was that it only works for e-commerce purchases.
Speaker 2:
So basically the old program was you spend $100, you get $10 back and we do quite a bit of e-commerce activity for our delivery, business and pickup. But it was really only giving half of our customer base any type of value and from a marketing and consumer perspective, we didn't understand a full 360 view of our customer right. We kind of knew what people were doing who interacted with us via the app or website, but once they walk into store, we really didn't have that way to connect the dots. So we moved to a new loyalty program that is, you can earn and redeem in store and online, and so far, so good. We've also moved to a redeemables-based program, so instead of earning just dollars or credits back, you're able to trade in your points for cookies and ice cream and other great products.
Speaker 1:
Okay. So when you look at redoing the program, obviously this is a big area of concern for many brands. Members of Loyalty360. We just concluded the State of Customer Loyalty Research paper for this year. Many brands are looking to redo or enhance their programs. Can you talk a little bit about how you went about assessing the program, how you redesigned it, cause I think that's a very germane and relevant topic for brands right now, because they want to have a better program, they want to address that sea of sameness. We'd love to know, at a high level, what went into redoing your program.
Speaker 2:
Sure, yeah, I mean. This started at a strategic level with leaders across the organization, and we saw the opportunity to learn more about our customers. That, you know, as we get bigger and scale becomes more of a factor, it's more important than ever for us to really understand our customer base and how they're interacting with us right, what we call our insomniacs, what matters to them, what motivates them. You know, how do we just build that deeper relationship? And we knew for some time that the old program was limiting in that regard. So we said, as a leadership team, this is a strategic priority. And then we built out, like you know, what is going to be what would be important to us in terms of the loyalty program in the future, what would be important to our customers, and we tried to really build a program based on the intersection of those two things.
Speaker 1:
Okay, excellent and early success of the program. How are you measuring?
Speaker 2:
What are you seeing so far with the new program? Yeah, we're just about six, seven weeks in, so it's really early and what we're trying to do right now is two things get as many people into the program as possible, so activate as many customers as possible, and then try different types of promotions to see what works right. So start to understand what type of promotionality is going to get people in, what type of communications promotionality et cetera gets people to order again or increase their order value. So really using this summer as kind of a testing ground, since college is still such a huge part of our customer base, so we want to learn as much as we can so that when students come back we're taking those learnings and enhancing that for the semester. But early so far, like we're really happy with the growth. We've seen a couple of promotions perform extremely well and for what we would consider kind of our off-peak season here in the summer, we're seeing really, really great engagement.
Speaker 1:
That's awesome. I know as part of the new loyalty program you launched, you have a new guest retention program, kind of a new platform as well that you're leveraging from a mobile and website app, and kind of what went into choosing a new direction in that regard and what are some of the capabilities that it will enable to drive better engagement and loyalty from your customers.
Speaker 2:
Yeah, I mean, for us it's really all connected. You know, we've had a great digital platform for a long time and now we've just brought loyalty into it in a much deeper way. I think the biggest thing for me kind of goes back to what I was saying earlier around enabling the customer to, one, have a little bit more choice around the types of rewards that they want and, two, being able to earn and redeem across all channels. Like that. One is so important for us, both from a consumer and a company perspective, and that's where I'm really excited about learning a little bit more about our customer base, building up their profiles so that we can have a deeper relationship with them.
Speaker 1:
Okay, you talked about learning more about your customers, building up their profiles. You know the end game obviously is personalization and being able to market to their interests and kind of desires based on the data and insight you have on them. Can you talk a little bit about your vision for personalization and what role it plays overall in your customer loyalty efforts?
Speaker 2:
Sure, I like to think of it going back to the customer. The consumer need, right. So cookies deliver on a lot of different consumer need states. You know our whole thing is late night cookies, so that need state might be I need a cookie right now because I'm coming home for the bar, I'm studying with my friends, or I'm up late, you know, finishing a video game, right. So it's kind of a reward for that moment. But then we also deliver to other occasions, right. So things like Mark, if it's your birthday, I might want to send you a 12-pack of cookies, right? Or a cookie cake, or it's Father's Day or Mother's Day, right. So there's kind of like these different customer occasions that we're trying to play into and we're really wanting to leverage this data and understand, like, how do we motivate our customers to activate across multiple occasions? Or do we have certain, you know, segments that only engage with us around? You know, certain types of consumer occasions. How can we build that to be deeper or introduce them into other ways to enjoy a cookie?
Speaker 1:
Excellent. Many brands are looking to drive emotional loyalty with their customers. It's a huge area of topic. We meet on it every quarter to talk about what's working and not but cookies food that don't mean rush and sugar rush you get from. You know, biting a cookie is obviously there, and a lot of college students there as well. So you know how do you deepen or how do you look at emotional loyalty and how are you driving it through your program to your customers.
Speaker 2:
Yeah, I'd say we're in the early stages of that, really trying to figure out what actually is going to do that, because that's the ultimate end goal. I think we have the luxury of a brand that can take risks in terms of how we communicate what we put in front of our customers, to kind of motivate them and really try to build that emotional connection and those memories where we, any moment that we can. And then, on top of that, we're trying to say like, okay, what types of promotions or products? You know, there's a lot of different day parts, there's a million different ways to kind of connect our consumer to cookies and trying to figure out which ones you know are the ones that are going to deepen the relationship in terms of driving more frequency with our customers.
Speaker 1:
Okay, we do a yearly paper on next generation customer loyalty, understanding what brands are looking at, what their challenge opportunities they see. There's kind of a dichotomy in next generation customer loyalty Some brands view it as the next generation or iteration of the program. In next generation customer loyalty, some brands view it as the next generation or iteration of the program, but some view it as a way to create engagement with kind of a new, younger, different audience. What does next generation customer loyalty mean to Insomnia Cookies? How are you looking at it?
Speaker 2:
I think for us. So we're always focused on one continue to engage and grow our customer base and continue to grow with them as they grow throughout their lives, right? So if they enter into the insomnia community as a college student, how do we make sure that we stay relevant as they move on to life after college demographics that are entering into college as kind of the entry point to our brand and making sure that we're being relevant as possible to them in terms of what they want, how we're communicating with them and the things that we're putting in front of them in terms of the offers.
Speaker 1:
Okay, interesting perspective staying relevant to them as they kind of transition out of college. What are some of the keys to success that you see, and how do you guys do that? Because they may not be as close, they may not be as proximate, it may be more special occasion based. How are you doing that?
Speaker 2:
going forward, with your customers. Yeah, I mean, it starts with really just understanding those segments, right, and how do we identify a first year college student, right, and understand, like, that segment and how they evolve over time? So we're still trying to build those segments out and really understand, you know, those different customers and what are their first entry points into the brand. Is it a single cookie, is it a six pack late at night, or is it? Hey, they actually came in through a birthday occasion, right? And then we're going to potentially communicate with them and motivate them in different ways and make sure that we continue to just have that deep emotional bond over time.
Speaker 1:
Okay, and do you have a definition of what next generation customer loyalty is, or is that something you're looking to find or to define? How are you looking at next generation?
Speaker 2:
I mean, for us it's all about the output, right, like we want to. Our ultimate goal is to build a massive global community of insomniacs, right? So I want to make sure that we're doing it in a way that is centric to what is most important to them and also feels as authentic as possible and connected to the brand. Right, and also feels as authentic as possible and connected to the brand. So for us, we have our loyalty 1.0. We're kind of in a 2.0 stage right now and super early on. So just making sure that we've got the plumbing running and the pipes in place and using that data to start to understand what's working so we can build to that future state Perfect.
Speaker 1:
What other programs that you engage with do you find yourself loyal to? Are there some programs that you find that you like? You think they're doing some great things regarding customer loyalty, and so what are those?
Speaker 2:
Yeah, that's a good question. I'm an addict as it relates to coffee, so an easy one would be Starbucks. I think you know one. They have a super habitual customer, but they're really good at creating all these little journeys for me to follow to get that extra point or get that extra, you know, reward. Obviously they're best in class as well, but I think from a consumer standpoint it's like easy to understand, relevant to me, fits within my day and is super easy to execute on as well.
Speaker 1:
That's awesome. I want to start with you. There were some recent articles about Starbucks and their program. They've never been a big one for discounting, but this year with their sales are off I think 7% to 9% in the first two quarters. So they're doing a lot of bundling price promotions and Howard never wanted to do that, but it sounds like it's driving some potential saving graces with the brand as far as their behavior. So that's good. Not sure if you read that, but interesting to see what they're doing.
Speaker 2:
Yeah, no, I'm not surprised. I think value is becoming more and more of a driver over time. As you know, there's been so much price that's been taken through restaurant brands over the last few all brands the last few years and we're getting to the point where value really is a key driver. And how do you convey value to your customers, whether it's through discounting or bundling or other means?
Speaker 1:
Absolutely. Next question. Last question Somewhat self-serving. What can Loyalty360 do to help you and your team with your customer loyalty efforts?
Speaker 2:
Yeah, I mean, for us it's about staying on top of what's next. I think that that's the biggest thing is really helping us understand what are the trends that we should be thinking about, what are the types of profiles we should be building, really helping serve as a resource for ourselves in the community.
Speaker 1:
Excellent, okay, well, thank you very much for taking the time to talk with us today. It was great to hear what you were doing and obviously it was great learning more about Insomnia and seeing where you guys are.
Speaker 2:
Yeah, no. Thanks for having me. Mark, great to be here and always appreciate the time Absolutely.
Speaker 1:
But also I forgot the quickfire question round, so we'd like to keep these to a one word or a short phrase response. I'm already getting in trouble with Carly and the content team. I don't like being in trouble. So what is your favorite word? Skiing there you go. Snow or water, snow, very good. What's your least favorite word? Laundry. What excites you? Being passionate, okay. What do you find tiresome? Too much data, okay. Is there a book that you've read that you'd like to recommend to colleagues or friends that is of interest?
Speaker 2:
that you've read that you'd like to recommend to colleagues or friends. That is of interest. I am a big fan of Cult Marketing and there's a, I think it's called Cult. It's a book all about cult marketing practices and really understanding how do you build brands based on deeper emotional bonds, and I'm a big fan of it. Highly recommend it.
Speaker 1:
Okay, I'll have to check that out. What profession are the ones that you currently have? You think you may be good at that. You would like to try.
Speaker 2:
Rockstar.
Speaker 1:
There you go. Yeah, okay, I envision myself as a country music singer, but it's kind of the same thing I'd love to try. Yeah, what do you enjoy to do that you don't often get a chance to do?
Speaker 2:
Bike riding Getting out and riding the bike, motorcycle, no, just a regular bike. Mountain bike, Whatever yeah, Okay.
Speaker 1:
Who inspired you to become the person that you are today? Oh good question.
Speaker 2:
I will say my father.
Speaker 1:
Okay, and what do you typically think about at the end of the day?
Speaker 2:
What I have to do tomorrow.
Speaker 1:
Okay, and how would you like to be remembered by your friends and family? A good friend, excellent, well, again, thank you very much for taking the time to speak with us today. It was great catching up and learning more about you and where Insomnia Cookies is in their journey, and it's great to reconnect for sure.
Speaker 1:
Yeah, thanks again, so much Really enjoyed the chat Absolutely, and thank you everyone for taking the time to listen today. Make sure you join us back for another edition of our Leaders and Customers of the World series. Until then, have a wonderful day.
