COFFEE CARDS LOOK LIKE ACES AT KOWALSKI'S

ROSEANNE HARPER

ST. PAUL, Minn. -- Kowalski's Markets here is using card clubs to build loyalty, and daily traffic, at service departments such as the coffee bar and the sandwich bar.

The latest such program, to be launched this month at a remodeled store in White Bear Lake, Minn., is a prepaid card for a designated number of drinks from the espresso bar. That and other card-based programs are working to turn the bakery and food-service departments into destinations, according to company sources.

The espresso bar, complete with brass espresso machine, sits smack in the middle of the in-store bakery and is a standout attraction anyway, said Tom Dabill, store manager at the White Bear Lake unit.

Still, customers in focus groups had asked for something to reward them for their loyalty to the coffee bar. That's why Kowalski's initiated a customer card this summer. The card, punched each time a customer makes a purchase, entitles the holder to a 10th drink free.

That program has been so successful that it spurred the idea for prepaid espresso drink cards, Dabill said.

"The first loyalty program involves a card that gets punched each time the customer buys a drink at the coffee bar. If he buys, for example, nine lattes from us, he gets the 10th one free. The first week we had 10 people using the cards, now there are more than 100, and most of those people are here every day," Dabill said.

The cards are kept at the coffee bar, in a small file box. "That way, customers don't lose them. That's always been a problem with this kind of program," he said.

"Our busiest time at the coffee bar is between 7 and 9 in the morning. People come to our coffee bar walk-up window on their way to work. They're in a hurry," he said.

"The prepaid coffee card will work like prepaid telephone cards. In this case, a customer would buy a card good for, as an example, 20 medium lattes or 20 small cappuccinos. We've found that people tend to buy the same type and size of drink each time they come to the coffee bar," Dabill explained.

The coffee bar gets a good measure of credit for a significant rise in bakery sales since the remodeling of the store here last spring. "People can buy any bakery item or items at the coffee bar. We also display platters of scones and muffins on the top of the case for impulse buys," he said.