With the technology of the ’80s, Nespresso revolutionized the coffee industry.
Customers can now make Italian-style coffee home with their new coffee machine with sealed pods.
The company continues to thrive 35 years later, with a turnover of more than USD$6.3 Billion in 2020. This is 7% more than in 2019.
The business was not an instant success. At first, it had a B2B focus and sold into Japanese offices. They began to get to know the customer better as they improved their technology.
This coincided with the rise in coffee consumption and the establishment of Starbucks in Europe during the 1990s. People were suddenly looking for barista-style coffee at their homes, and Nespresso was able to offer it at a very affordable price.
Although they could establish a significant advantage over their competitors, patenting the technology that enabled them to succeed was not enough. Patents began expiring in 2012.
There have been many alternatives to the machine and the pods since then. However, Nespresso must also contend with instant coffee and filter coffees and stove-top and barista-style coffees at home and in cafes.
There are many ways to enjoy coffee. This article will discuss how Nestle uses digital marketing to keep their market leadership position of 30 years.
They are focused on creating recurring revenue.
When they were invented, Nespresso machines were revolutionary technology. It is still fascinating to see how it works today. You can buy Nespresso pods online at lower prices.
However, their revenue model allowed them to grow quickly from a business perspective.
You can join the Nespresso Club by purchasing a Nespresso machine. The Club is one of many benefits, which we’ll discuss later. It was how you ordered your coffee pods.
Nespresso did not have any retail stores then, and they also didn’t have an online website. Nespresso created a database from the forms of its customers’ preferences and order habits to enable them to sell pods by mail or phone.
Because they knew that business success was not dependent on the first order, they built a CRM in 1980.
Customers can easily repeat their purchases with them.
To acquire and then establish recurring revenue from customers, making it easy for them to purchase time and again was crucial.