According to the Bain & Company and Harvard Business School reported in 2000, increasing customer retention by 5% boosts profits by 25% to 95%. Hence, in an age when the impact of the Internet and technology is higher than ever. Starbucks is leading the industry by using its online activities to take care of its existing customers and bring back profits.
Through the Starbucks Rewards program – Starbucks for Life, you might be wondering how Starbucks is successful in its loyalty program. And how it keeps a strong relationship with both new and existing customers.
Is there anyone who doesn’t know about Starbucks? It is successful with its unexceptional products and the Starbucks Rewards program. Launched on 26th Dec 2009, the Starbucks Rewards program has over 30 million active members. This amount contributes to 60% of Starbucks’ total revenue. It includes 2 types of popular client programs: Tiered and points accrue based on dollars expended. It is free for the base level and optional to sign up for a credit card for further benefits. In 2019, the success of this customer engagement program, a significant 7% rise in sales, attributed to that rewards program.
The points system of Starbucks is easy to grasp all the racking point-up methods:” No matter how you pay, you can earn Stars with your morning coffee. Those Stars add up to Rewards”, developing the customer experience and brand loyalty through these rules:
For the levels of membership, Green and Gold cherish the extent of involvement of a member. The tiered system encourages spending and gives consumers a feeling of special treatment. Plus, Starbucks offers rewards by redeeming Starbucks points from 25 Stars and above. The more Stars you get, the more attractive gifts you will achieve, which seem to be personalized offers for loyal customers.
The factor that makes Starbucks Rewards outstanding from other loyalty programs is “Endless Extras”. Joining Starbucks rewards means unlocking access to exclusive gifts, and yes, Starbucks did it.
The Starbucks Rewards app gives perks more than we need: saving money, convenience while using the app and more entertainment. On the business side, the more successful its loyalty program is, the more profitable is. The data on consuming behavior becomes diverse, reaching more customer profiles.
Letting customers feel belonging to the business and feel the brand also empathizes with them. Starbucks did a very great job when it integrated the mobile app and online ordering. Since the brand recognizes that it is a waste for waiting for drinks or food in-store while they are so busy. So pre-ordering is the best way to save time and use the leisure time for other things. Besides, it is not always available for a cup of coffee or a piece of cake outside. So the Starbucks delivery option is not a bad idea.
Starbucks added 2 games to its system in 2015 called Starbucks for Life and Bonus Star Bingo. Both of them accumulated member points and prizes by completing the challenges. By applying gamification to the experience, it works to engage customers with simple discounts.
The size of members joining in challenges and events is not a small number, it is a win-win situation. When customers collect more stars, the brand increases its awareness to the public. According to SNIPP, Gamification marketing increases by 47% in client engagement, 22% in brand loyalty and 15% in brand awareness. Although many retailers know that adding games to their system might work. However, as successful as Starbucks, it is a dream and a point that others should learn about Starbucks.
Personalized offers: this brand uses its huge customer data to analyze which products will fit each customer’s taste, case by case. Besides, Starbucks loyalty program provides a lot of tailored offers for each customer. Also, it recommends members explore new items in the range of menus, which show personalization. Forbes reported in 2020, Starbucks spent 40% of its overall sales on this loyalty program. Therefore, we can see how lucrative the Starbucks Rewards – Starbucks for Life can be.
Starbucks Rewards illustrates the power of combining a reward program with smart technologies. The mobile app improves the entire consumer experience. From reducing transactions or saving money to making consumers more comfortable when they can pre-order and pick up in-store.
The flexibility the app provides its loyalty members is practical when digitalization is growing so fast. Integrating modules of online and offline shopping is a new way to communicate with customers to get a better understanding. We can say thanks to integrating activities, the connection between businesses and consumers is great, now.
The mobile app makes the customer experience more convenient in ordering and paying for their coffee and food items. Furthermore, Gamification is for those who love to collect more Stars. Then, the mobile approach is the next level of being used to the technologies or smart devices. It focuses on tech-savvy consumers from surfing menus and pre-ordering online to paying on smart devices. The options of delivering or picking up in-store are available for customers.
As Forbes reported in 2019, it is one-third of clients used the app to order ahead before they visited Starbucks. This brings a lot of convenience to both clients and the brand.
Data in the digital world is important, if not one of the crucial parts of a business, especially an online one. Based on customer data, Starbucks has an extent of purchasing behaviors to plan ways to reach targeted customers. Starbucks leverages potential data to access customers with personalized recommendations to push repeat purchases.
The Starbucks Rewards website’s case study provides brief and easy-to-understand information. Starbucks knows how to apply the view of customers when they glance at the website. This action of first reaching the interface is included in the customer experience to the brand to reach this brand’s products. For e-commerce businesses, a seamless process provides information and brand activities.
While surfing the webpage of Starbucks Rewards, it is simple to get all the information. There are ways to collect Stars, redeeming methods and offers for each range of stars. The enrollment process includes the following factors:
Starbucks knows what it wants to impress the clients at first look at its good appearance. Its design is for everyone, no matter their age. Everyone can reach out and get information about the program.
Now, it’s your turn. Let’s consider what you are doing, what you want to impress new clients and invest more into your appearance. You do not need to put your business on any simple colors or a fancy look on your website. At least, the website is mainly for the clients.
A brief enrollment on the Starbucks rewards website represents step-by-step. From registering to informing about the offers, ways to get gifts, rack up points methods and finally to payment steps are clear. These steps are easy for even primary or secondary students can read and understand how the program works. Plus, the birthday of a customer is also asked to be added during the process,
You must learn how Starbucks communicates with its customers to apply in your business system. You should ensure every single word, on the website, is not misunderstood. It prioritizes straightforward words or sentences but it works with all types of customer profiles. A simple design encourages customer participation and long-term loyalty when they know clearly about the program. Remember, the complexity can be a big barrier to engagement.
Meaningful rewards are practical gifts that customers will use in the future. Or if they have special purposes, make sure the customers feel valuable at all. Knowing what the “meaningful rewards” (like Starbucks offered its clients) of our clients is not too hard. When you understand what value your products bring to clients, and how the loyalty clients want to get.
For Starbucks, it sells various types of coffee, tea and bakery items. Hence, its system recognizes in which ranges of age, and which products customers are likely to eat or drink. Make sure its customer gets benefits. However, how to know the products will be suitable for the tastes of various customer segments is hard.
After learning about Starbucks loyalty program, more businesses suggest accessible tiers to reach. These are not to waste too much time and money, the consumers are likely to collect points to achieve those targets as soon as possible.
Endless Extras from Starbucks is the best example of offering rewards like b-day gifts, pre-orders and pick up in selected stores and special games for collecting points. Because of the variety of options, the excitement is stable and customer retention is maintained.
As mentioned before, prioritizing the personalization for each case of customer is important. Make your clients feel they are the ones, who are exclusive to your brand. Tailored rewards like birthday gifts or based on the data for each account, the systems can record and utilize those data wisely. If your business pays attention to customers’ special occasions, the clients will feel respect. Then, they want to stick with your business activities and believe in your products.
Grasping the feelings of customers and making them feel relaxed when both playing the game and collecting points at the same time. Following Starbucks, knowing what is the point of attracting customers to engage with the brand through the app. Keeping the interest in other optional transaction activities, such as quizzes, games or acting on social media.
Even though it is said that the app is created for tech-familiar users. However, you also focus on other users who are not used to technology. Since pushing promotion to those who are using technology every day is very easy. This is completely a different story for someone who doesn’t use smart devices. Reaching them successfully will make a boom to your business’s revenue.
In Sep 2022, Starbucks announced its Starbucks Odyssey for building a loyalty customer program or collecting stars in NFT. The Starbucks Rewards Odyssey experience was made to a limited number of users in test form by the firm Dec 2022. To explain why Starbucks decided to launch this program, the needs of customers will change soon. Starbucks shares that Odyssey creates opportunities to connect with the Web3 community.
After logging in to Starbucks Odyssey, users participate in games and challenges to improve their knowledge about coffee and brands. After finishing the games, members will receive journey stamps in NFTs (non-fungible tokens). In addition, users can purchase limited edition stamps at the app store and pay with a credit card. After being announced in Sep and launched in Dec 2022, the limited-edition stamp – Nifty Gateway was represented in early 2023.
Users or members can rack up stamps by playing games on the app or purchasing with others’ stamps. Members can redeem the online classes about making virtual Espresso Martini classes when they get enough stamps. Plus, a part of the revenue will be donated to charity organizations or Starbucks Rewards members.
Starbucks’ Executive Vice President said that Starbucks has always been known as a third place that delivers warm experiences to people. Starbucks’ goal is to build a virtual community. This community honors Starbucks’ tradition while it allows consumers to join in meaningful events.
Customer engagement is valuable when having additional exclusive activities. Such as joining Starbucks Reverse Roasteries or even going to a coffee farm in Costa Rica to see and check raw materials. Involvement with Starbucks Rewards is increased by joining games and activities with NFT-based rewards.
The Starbucks Odeys is a special point in the loyalty program, an innovative lesson that other retailers should follow. Let’s find out 4 factors that make Odessey outstanding:
A unique type of digital asset validated by blockchain technology, NFTs have transformed some industries. Starbucks is one of the fastest brands in the F&B industry to realize these potential NFT technologies.
This new loyalty customer program strongly reaches and focuses on the customer’s experience. Always ready for the changes, adding more personalized offers, without products. Starbucks invites members to private events and suggests other activities based on customer data. Understanding customers’ hobbies creates more opportunities for customer experiences.
Recommending other activities following customer’s behaviors makes a better impression on business. Many articles reported if the customers feel back all the respect the brand treated them, they are likely to have a stronger relationship. Especially, understand what is the thing “your friend” loves and wants to do, it is very touching when you allow them to do so.
Younger consumers seem to engage with the brands for digital recognition and satisfaction. Through Starbucks Odyssey, Starbucks proves that it is also on the way to transforming to be more digitalized. Starbucks has more updates to be appropriate for the current generation and younger.
Once again, it would not be too exaggerated to say that Starbucks is the largest coffeehouse chain enterprise. It dares to change, dares to transform itself in the direction of technology to keep up with trends. Digitalization will take a lot of time and money. However, if successful in this transformation, Starbucks will regain a lot of revenue and profits. Of course, Starbucks can continue expanding its scale of operations.
Following Starbucks as a big brother. How to treat consumers and make customer retention have a long-run path with Starbucks? You should take a consideration all the suggestions above. Then remember to choose the options that are suitable for your business activities.
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