How Doughnuts Create Loyal Customers

Originally posted: April 29, 2015. Updated September 14, 2020.

I initially wrote this post after a visit to my brother and his family in Los Angeles. Right now, I miss my family. Heck, I even miss the annoyance of travel. And I really miss the fun, silly doughnut tradition my nephew and I created. Here’s a throwback to an earlier blog post from simpler times.

That said, this post is about solid business. Enjoy!


Hot doughnuts are pretty hard to resist. That’s why doughnut stores have big ol’ neon signs in the window.

“HOT NOW!”

Cars swerve over multiple lanes of traffic to purchase when the sign lights up. OK, my car.

Here’s why: hot doughnuts are the best doughnuts. And “hot” is temporary.

As a company, it’s valuable to connect your favorite customers to your best goodies. You need a way to act fast.

Whenever my nephew and I are together, we have a wonderful doughnut tradition. We go to a favorite shop and open a tab. He’s allowed to eat as many doughnuts as he wants. (This is an easy promise, since he’s never eaten more than two.)

His favorite shop is Kettle Glazed, a Hollywood outpost with flavors like maple bacon, S’mores, and Blueberry-Lemon. So that’s where we went – to enjoy the getaway and our plan to get sugared up.

As we finished our first doughnuts and began looking for round two, the owner came from the back with a tray of piping hot, vanilla bean doughnuts. Knowing us from previous visits, he promptly gave my nephew and me each a freebie.

Why would the owner of Kettle Glazed Doughnuts give us free doughnuts? We were clearly there to buy. We had a tab running!

Some business owners would argue that’s a bad policy – don’t give away the merchandise. Sure, that’s one way of thinking about maximizing the day’s receipts.

Free Doughnuts Create Loyal Customers

But the guy from Kettle Glazed was thinking about the long-term. By giving us free doughnuts, a couple things happened:

First, we bought even more doughnuts. On our way out, we grabbed an extra dozen for the rest of the family. We didn’t feel obligated to buy, but we wanted to show some reciprocal goodwill in return for his generosity.

Second, our positive feelings about the store shot through the roof. My nephew and I became even more loyal customers. I tweeted and told people about what happened. They tried Kettle Glazed as a result. Here I am now, writing about my experience and sharing the word on an even wider scale. When I go back to LA, you can bet I’ll make an effort to go back to Kettle Glazed. (NOTE to my 2015 self: Mission accomplished!)

What was his ROI on those two free doughnuts? Huge!

Now consider your business.

Every company has an opportunity to create massive brand loyalty.

Unlike a doughnut shop, you may not be able to give away your products easily and inexpensively. Your freebie may not be as sweet as a doughnut. (“Sweet” = double entendre!)

And that’s OK.

Everyone can find simple ways to upgrade a customer’s experience to surprise and delight. 

Here’s the trick, stop thinking with a discount mentality. People are used to discounts – they’re not special. Discounts won’t get you remembered and they won’t build loyalty. They’ll mostly build a customer base of folks who want more for less.

Instead, look for ways to make customers feel special. Find an easy way to offer an upgraded level of engagement.

Small, thoughtful gifts are nice, but so are heartfelt notes. Whatever you decide, find a process that works so that everyone in your organization is providing a consistent experience to engage customers.

When customers feel special, they come back more often. They spend more. They tell their friends.

When done right, you can grow bigger and faster with a small upgrade vs. a big discount. Every company is unique. Want to figure out the best “free doughnut” for your company?

CLICK HERE for more ways to hook long-term, loyal customers.