Keurig is making 2 mistakes that are driving customers away

Keurig on Facebook

The company's shares have been declining amid a recall of its MINI plus brewing system. The inventor of the coffee brewer's K-Cups has criticized the product for being bad for the environment.

And customers who bought the Keurig 2.0 on Amazon complain they bought the machine only to realize they needed a new kind of coffee pod for it to work.

Keurig has made two major mistakes that are eroding customers' trust, branding expert and University of Southern California professor Jeetendr Sehdev.

Here's where Keurig went wrong - and how the brand can redeem itself.

1. Expecting loyalty.

When Keurig released its 2.0 model, an impressive machine that could brew an entire pot of coffee as well as individual sizes, many experts lauded it as the next George Foreman grill.

But customers soon discovered that the machine only worked with K-Cups sold by Keurig. Pods they had purchased through other vendors for the original machine wouldn't work.

"Keurig made the huge mistake of forcing audiences they had gained to stay with them," Sehdev said. "You can't ask a customer to get in bed with you and stay there."

Amazon reviewers have expressed anger that the company is limiting which K-Cups they can use.

"On principle alone, I hate that they are dictating which coffee I'm using in my machine," one reviewer wrote.

Sehdev said this decision, which was meant to drive sales and breed loyalty, led only to resentment.

"The great brands are the ones people choose over others," Sehdev said. "People will pay twice as much for a cup of coffee or a pair of jeans if it's the right brand."

Keurig

2. Underestimating ethics

Many K-Cups can't be recycled, although Keurig is increasingly offering recyclable versions.

Sehdev said today's young consumers want to use environmentally-friendly products.

"Consumers today are asking 'how does this impact the environment?' and 'how is this affecting the world at large?'" Sehdev said.

This mindset is helping drive sales at companies that tout ethics, like Chipotle and Starbucks.

Sehdev believes it is possible for Keurig to redeem itself.

"Decades ago, Nike customers were adamant that they weren't happy with the business practices and boycotted the brand," Sehdev said.

Nike eventually made its production process more ethical and sales have been soaring ever since.