Designing a Loyalty program
Similar to any other global brand, Starbucks has paved its way to dominance in the global market with the help of excellent marketing skills. Starbucks understands that a core part of a successful retail marketing strategy lies in a loyalty program that can help attract and retain its valuable customers. If done correctly, a good loyalty program will incur repeat purchases/visits with the additional hope of fostering brand advocates.
The My Starbucks Reward Program allows customers to earn Stars by paying with a registered Starbucks Card, the Starbucks mobile app, or by entering a code from specially marked Starbucks products in grocery stores. The more the customer buys the more stars are collected and the bigger the benefits. There are three stages of the loyalty program: Welcome, Green, and Gold. The process of transitioning through one level to the next is by earning “stars” where each star is worth one Starbucks drink. The Welcome stage is achieved through merely signing up with the Starbucks reward program, and the perks for this level gives the customer a free drink and a coupon on birthdays. Level Green occurs after 5 stars, which gives the customer free refills in the store in addition to all of the benefits from the previous level. Lastly, in order to get the coveted Gold level the customer must collect 30 Stars within 12 months, and in order to maintain this level status, another 30 Stars have to be collected within the next 12 months. At this level, customers enjoy a free drink or food reward with every 12 stars.
Customer experience is the primary focus of this innovative rewards program. Customers in this program are almost participating in a game by earning Stars, participating in product promotions, and completing incentivized actions. The reward for playing? Redeeming seemingly free bonus drinks, food, and more. Customers are even given an opportunity to engage with the brand while buying coffee in grocery stores and various public promotions. Essentially, the more the customer interacts with Starbucks, the more Stars they earn, and the bigger the opportunity for reward becomes.
Starbucks is truly a pioneer in the way brands can interact with their customers. Starbucks has developed a loyalty program through rewarding customers for actions in ways that other brands have never approached before. Modern day consumers are more demanding than ever due to the breadth of information on products and pricing so readily available to them. For brands nowadays, it is important to emotionally connect with their customers to ensure the brands growth and sustainability. Admittedly, Starbucks does not produce the cheapest coffee around, but it is able to cultivate a loyal customer fan base not only for its coffee, but also the brand experience.
One other aspect of the loyalty program that Starbucks has successfully performed in is by developing an experience that is easy for consumers to understand. The mobile app is a good example of a sleek user experience that allows customers to actively participate and engage in without ever feeling overwhelmed or cheated.
Starbucks is the first retailer to offer its own mobile payment technology that is seamlessly linked in with the Starbucks Reward Program. By embracing the changing world and the role that technology fits into this world, Starbucks is one step ahead of other companies by allowing customers with smartphones the option of paying with their phones. Data shows that growing numbers of consumers are going wallet-free and opting to pay via the mobile app. Starbuck’s chief digital officer, Adam Brotman, released at the annual shareholders meeting that there were upwards of 9 million active loyalty members at the end of fiscal 2013. The mobile payments program itself generates more than 3 million mobile transactions each week in the U.S. alone.
Starbucks success with its mobile payments program has inspired the company to put added weight behind its mobile digital initiatives. Brotman has even said “various digital initiatives have added demonstrable impact to our U.S. business”, and Starbucks promises to do even more in this field with continued investment. In August 2012, Starbucks announced that it was investing $25 million in mobile payments company Square and will soon begin to use Square’s mobile payment technology in stores. This investment is a clear sign that mobile payments are a harbinger for the way Starbucks customers will pay. Square brings an added GPS technology to the mobile payments field. With Square, a customer’s phone and name and picture will automatically notify the store as soon as the customer enters. The idea is that eventually Starbucks customers will be able to order and charge to their credit cards by simply saying their names.
Starbucks proves again that it is a foreword thinking company and extremely focused on its customer’s experience. This new technology has not proved yet that it adds to the already proliferating loyal customers. However, imagine a day where a loyal customer walks into a Starbucks store and by the time they approach the counter, their favorite drink is already made fresh and ready to go.
The My Starbucks Reward Program allows customers to earn Stars by paying with a registered Starbucks Card, the Starbucks mobile app, or by entering a code from specially marked Starbucks products in grocery stores. The more the customer buys the more stars are collected and the bigger the benefits. There are three stages of the loyalty program: Welcome, Green, and Gold. The process of transitioning through one level to the next is by earning “stars” where each star is worth one Starbucks drink. The Welcome stage is achieved through merely signing up with the Starbucks reward program, and the perks for this level gives the customer a free drink and a coupon on birthdays. Level Green occurs after 5 stars, which gives the customer free refills in the store in addition to all of the benefits from the previous level. Lastly, in order to get the coveted Gold level the customer must collect 30 Stars within 12 months, and in order to maintain this level status, another 30 Stars have to be collected within the next 12 months. At this level, customers enjoy a free drink or food reward with every 12 stars.
Customer experience is the primary focus of this innovative rewards program. Customers in this program are almost participating in a game by earning Stars, participating in product promotions, and completing incentivized actions. The reward for playing? Redeeming seemingly free bonus drinks, food, and more. Customers are even given an opportunity to engage with the brand while buying coffee in grocery stores and various public promotions. Essentially, the more the customer interacts with Starbucks, the more Stars they earn, and the bigger the opportunity for reward becomes.
Starbucks is truly a pioneer in the way brands can interact with their customers. Starbucks has developed a loyalty program through rewarding customers for actions in ways that other brands have never approached before. Modern day consumers are more demanding than ever due to the breadth of information on products and pricing so readily available to them. For brands nowadays, it is important to emotionally connect with their customers to ensure the brands growth and sustainability. Admittedly, Starbucks does not produce the cheapest coffee around, but it is able to cultivate a loyal customer fan base not only for its coffee, but also the brand experience.
One other aspect of the loyalty program that Starbucks has successfully performed in is by developing an experience that is easy for consumers to understand. The mobile app is a good example of a sleek user experience that allows customers to actively participate and engage in without ever feeling overwhelmed or cheated.
Starbucks is the first retailer to offer its own mobile payment technology that is seamlessly linked in with the Starbucks Reward Program. By embracing the changing world and the role that technology fits into this world, Starbucks is one step ahead of other companies by allowing customers with smartphones the option of paying with their phones. Data shows that growing numbers of consumers are going wallet-free and opting to pay via the mobile app. Starbuck’s chief digital officer, Adam Brotman, released at the annual shareholders meeting that there were upwards of 9 million active loyalty members at the end of fiscal 2013. The mobile payments program itself generates more than 3 million mobile transactions each week in the U.S. alone.
Starbucks success with its mobile payments program has inspired the company to put added weight behind its mobile digital initiatives. Brotman has even said “various digital initiatives have added demonstrable impact to our U.S. business”, and Starbucks promises to do even more in this field with continued investment. In August 2012, Starbucks announced that it was investing $25 million in mobile payments company Square and will soon begin to use Square’s mobile payment technology in stores. This investment is a clear sign that mobile payments are a harbinger for the way Starbucks customers will pay. Square brings an added GPS technology to the mobile payments field. With Square, a customer’s phone and name and picture will automatically notify the store as soon as the customer enters. The idea is that eventually Starbucks customers will be able to order and charge to their credit cards by simply saying their names.
Starbucks proves again that it is a foreword thinking company and extremely focused on its customer’s experience. This new technology has not proved yet that it adds to the already proliferating loyal customers. However, imagine a day where a loyal customer walks into a Starbucks store and by the time they approach the counter, their favorite drink is already made fresh and ready to go.
To learn more about the specifics of the Rewards Program please click here: https://www.starbucks.com/card/rewards
Bibliography:
Bibliography:
- http://bigdoor.com/blog/2013/12/11/top-10-retail-loyalty-programs/
- http://enterpriseinnovation.net/article/starbucks-unveils-cross-channel-multi-brand-loyalty-program
- http://www.nytimes.com/2012/08/08/technology/starbucks-and-square-to-team-up.html?_r=1&
- http://techcrunch.com/2013/07/26/mobile-payment-at-u-s-starbucks-locations-crosses-10-as-more-stores-get-wireless-charging/
- http://www.usnews.com/opinion/blogs/economic-intelligence/2013/11/20/what-starbucks-gets-about-gamification-and-loyalty
- http://venturebeat.com/2011/12/05/starbucks-mobile-pay-stats/