For its customers, Starbucks is a religion. Each morning they follow the ritual, grabbing their caramel latte, paying for it with their smartphones and wandering through the city with iconic cups in their hands. Sipping coffee became a treat and a natural part of the everyday routine to such an extent that they don’t feel the need to ask: “Why can’t I live without Starbucks? What did they do to make me such a loyal customer?” But we investigate the topic and share with you some insights on great Starbucks practices that you should try to mimic and adapt to your business. The key to their success is real-time personalization across many devices and touch-points.
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1. Invest in technology, not in ads
Howard Schulz says that the key to Starbucks’ success was investing in digital technology, not digital ads. Instead of pumping money into yet another banner, Starbucks team focused on customer experience and finding the best tools to improve it – not the other way round. It’s about thinking big and concentrating on purpose: using data collected about customers to build lasting relationships.
You need tools to deliver the best experience, but first you must know what that experience is and what do you want to offer. Invest in software that will help you shape the experience according to your best knowledge on customers. Investing in technology, not in ads, is also a sign of a need to find brand new solutions and new modes of communication. Don’t reduce your marketing to doing more and repeating your actions over and over again, but try to find out how you can deliver your message better instead.
2. Loyalty program must be convenient… and should be mobile
My Starbucks Rewards Program, as the company reported, grew 28 percent year-on-year to 10.4 million members in the US alone in the latest quarter. The clue to its success is to involve mobile channel, basing on deep understanding of how customers use it. As 60% of consumers’ time spent on mobile is spent on mobile devices, finding a good idea to utilize the channel seems vital. People love mobile because it gives them convenience they seek: access to all information needed in a blink of an eye, in any place. Saving time is also a huge advantage: you can compare prices or check product reviews right in the store before you buy. That’s why mobile became a center of Starbucks’ loyalty plan, which allows customers to pay for their drinks with a smartphone and receive discounts or bonuses for their purchases. “Mobile payments now represent a whopping 20% of all in-store sales in the US, more than double the figure from just two years ago, and the coffee house is processing nearly nine million transactions each week”, expert from Business Insider comments.
Starbucks came up with a great idea of innovative loyalty program that doesn’t involve collecting stamps on a piece of paper or looking for a plastic loyalty card each time they come to the store. They followed consumers in their love for apps and created mobile loyalty program tailored to their needs.
3. Teaming up with others
The phrase “Deliver value” is repeated as often as rarely it is put in practice. We stumble upon it in numerous blog posts, ebooks, and articles. So that’s a shame that we prefer to shout it in fellow marketers’ ears instead of practicing. How do you deliver value? Starbucks has some ideas. Apart from all the discounts and benefits of a loyalty program and beyond the unmeasurable emotional benefits of its customer service, it also became a place where you can get much more than coffee. Thanks to a series of partnerships (e.g. with Spotify and Lyft) they can offer their customers many great exclusive deals for other services.
To sum up, what Starbucks can teach you how to increase customer loyalty?
1) Use data to build relationships and learn what your audience really wants
2) Create multi-channel experience and focus on mobile
3) Invest in technology to implementing your vision instead of following others and buying more and more ads
4) Deliver real value. Partner up with other companies to create great cross-offers.
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