At the turn of the decade, Starbucks was grappling with falling revenue and high costs, and the rapid expansion was coming to a halt. Then, in 2015 it launched the ‘My Starbucks Rewards’ loyalty program for its customers and proved that customer loyalty is still as strong as ever. By 2017, customers had nearly $1.2 billion loaded on their mobile apps and loyalty cards, and 41% of customer transactions in North America were made through loyalty cards. How did Starbucks manage to make their rewards program such an astronomical success? Let’s find out why the program resonated with customers and what small business owners should consider before launching their own Loyalty Software for Business:
Simple Program Structure
Starbucks Rewards have a rather simple tiered structure that makes it very easy to keep a track of the terms and conditions. Customers need to register for the ‘My Starbucks Rewards’ program, upon which they can enjoy a special drink during their birthday month and are also eligible for a free size upgrade on a beverage of their choice. Furthermore, every time they visit Starbucks, they earn stars in exchange for a certain amount of value order. When the number of stars reaches five in number, customers are promoted to ‘Green’ level, where in addition to benefits in the welcome tier, they can customise drinks and get a free drink on purchase of whole bean coffee. Furthermore, maintaining a certain number of stars during a 12-months period paves way for an entry into the ‘Gold’ tier, which provides special offers, free drinks, and a customised gold card.
Engaging Mobile App
One of the high-points of the program is the unmatchable and seamless mobile experience. The mobile application is interactive and intuitive, and provides customers with a variety of practical features. The app allows for a simple and convenient way to keep track of the stars earned and redeemed, view order history, and even find the nearest Starbucks store. What’s more, in addition to simplifying customer interaction, the app greets customers with new, attractive, and limited-time offers that provide customers to earn more stars – thus keeping them engaged. Starbucks has also provided regular updates to the app without radically changing the interface or the design of the application. The company’s focus on choosing the right Loyalty Software for Business has reaped rewards, as the app has been facilitating nearly 6 million sales per month – or almost 22% of the entire sales in the USA region.
Whenever a customer enters any of the three tiers, he/she receives a special award that encourages further purchase and engagement. Registering for the loyalty program earns a free drink in the birthday month, the next level provides free drinks on purchases, and the top tier offers a customised gold card in addition to a free drink every set number of stars. Starbucks has also been rewarding customers for purchasing its grocery products, thus, massively expanding the scope of the program. Lastly, by integrating the payment with the mobile app, Starbucks also ensures that customers are aware of all the offers and rewards that they are eligible for.
Innovative Rewards Strategy
Another thing that Starbucks has really perfected is the dynamic design of its rewards strategy. There are many features which work very well – providing a free birthday drink across all tiers, the program is able to make customers feel special; free size upgrades keep customers coming back; and beverage customisations encourage repeat orders. Additionally, in order to promote products (like whole coffee beans) Starbucks offers free drinks on the purchase of coffee beans, tea, mugs, and readymade drinks. Also, by keeping its top ‘Gold’ tier exclusive, yet accessible, the program is able to encourage customers to visit Starbucks for an exclusive gold card.
The success of Starbucks Rewards proves that with the right Loyalty Software for Business, a customer loyalty program can script a sustainable growth in today’s turbulent and disruptive business environment. If you’re also mulling over the thought of launching a customer loyalty program for your business, make sure you have the right partner to help you with its inception, design, and implementation. Loyera is one such intelligent and feature-rich loyalty solution for businesses of all types and sizes and is available for small businesses absolutely free of cost. To know more about how your business can benefit from Loyera, get in touch with us today.