Why Is the Starbucks Loyalty Program so Special?
In a sea of QSR rewards-based programs, what makes the Starbucks loyalty system stand out from the rest? Some would say that it’s the fact that Starbucks is a very large successful brand, and that that’s all there is to it.
However, the truth is far from that. After all, we’re talking about Starbucks loyalty program that holds more money on its affiliated cards and app than many banks have in their deposits. That’s right, there are approximately $1.2 billion loaded on the Starbucks mobile app and the company’s loyalty cards!
That’s pretty much double the profits the company had 3 years ago.
Plus, around 41% of US and Canada-based Starbucks transactions were made through the loyalty card, while around 24% of US-based payments were made through the Starbucks mobile app. Thus, it’s easy to see how the loyalty program helped increase the company’s revenue and presence on the market.
And all of this is due to the changes Starbucks made to their existing star-based loyalty program. Before the change, clients were able to earn a star for each transaction they made. There was no spending limit, and patrons were able to redeem a free item once they accumulated 12 stars.
Well, despite how good that might sound from a customer’s perspective, many clients have been complaining about that Starbucks loyalty program for some time. Why? Because many people started exploiting it by telling cashiers to ring up all the items in an order separately.
They did that to get more stars at a faster rate. However, that also resulted in longer order times, and – consequently – longer lines and annoyed clients.
So, Starbucks decided to listen to their loyal customers and make a change. As a result, it now takes 125 stars to get a free item, and every $1 spent = 2 stars.
The loyalty program also features 2 levels:
- Green (0-299 stars)
- Gold (300+ stars)
So, customers are motivated to spend more money at Starbucks to unlock better rewards.
At first glance, it might not seem like much of a change. Still, the program has been going well for the company (as you’ve just seen). Plus, it’s the kind of nurture-based rewards program that creates long-term relationships with customers.
Well, this is definitely the kind of success story you can treat as a case study to better understand what you can do to improve your own services and loyalty programs.
So then, let’s see what exactly makes the Starbucks loyalty rewards program so popular and successful, and if there is anything QSR owners can learn from it.
5 Reasons Why the Starbucks Rewards System Is so Successful
Sure, all that data is definitely impressive. But it doesn’t really tell you what you want to know – namely what key points you should take from it.
Well, don’t worry – we’ll handle that! After researching the Starbucks loyalty program, and analyzing every angle, we’ve come up with 4 clear reasons why it’s so successful with customers:
1. The Starbucks Mobile App Offers Order-Ahead Features
You’d be surprised just how many QSR owners ignore the importance of order-ahead mobile apps – especially when it comes to loyalty programs.
What is this feature? It basically gives your loyal patrons the power to use their mobile device to order whatever they want from your menu. And they can do that ahead of time, so they can just pick up the order when they arrive at your store/restaurant.
And that’s not only convenient for your customers, but for you and your employees too. After all, it significantly reduces wait times. Thus, lines move faster, patrons are satisfied, and your business can service more clients, resulting in increased revenues.
So, it’s not hard to see why Starbucks Rewards members are happy with the program when they can use the Starbucks mobile app to order what they want AND also pay for their order ahead of time.
2. The Starbucks Loyalty System Offers Exclusive Rewards
Yes, exclusive rewards really matter to patrons. They give them the feeling of belonging to a select group (or community, more like it) that enjoys certain privileges.
Starbucks offers their members access to 3 exclusive features:
- Monthly Double-Star Days (once per month, Gold members can earn 4 stars/$1 spent)
- Personalized Gold Card (quite a nice touch)
- A Reward Every 125 Stars
So, this is definitely something any QSR owner should do. It’s a good way to show your patrons just how much you appreciate their business, after all.
In fact, here’s a tip – you could do one better than Starbucks by making your exclusive rewards even more “exclusive”. We’ve seen that some program members have complained that it’s too easy to get the “Gold Level” (basically, you need 300+ stars), so the exclusive perks no longer feel so … exclusive – so to speak.
We’re not saying you should make such rewards extremely difficult/expensive to obtain. But you shouldn’t make it too easy to get them either, as they won’t feel as special to your loyal customers this way.
3. It’s Well-Priced and It Targets the Right Customers
By pricing 2 stars at $1, Starbucks made sure that all their clients will have an easy time accumulating stars at a decent pace. And when you take things like the Double-Star Days we just mentioned into account, it becomes apparent just how customer-friendly the new Starbucks mobile app and loyalty program is.
Of course, there were people who complained about the new value system, saying that getting rewards will now cost them more than before.
However, here’s the kicker – many of those people who complained about that were the ones who abused the old check-out system in the first place (by having cashiers ring items in an order separately).
Not really the loyal customers successful QSRs are made out of, right?
So, by making this change, Starbucks actually managed to target consumers who are truly valuable to their business – people who love spending both time and money at their coffee places.
Basically, patrons who can help their business grow – not only because they are rewarded, but also because they want to.
4. Program Members Get to Enjoy Mobile Payments
Mobile payments are becoming more and more popular – and they’re directly linked to loyalty programs! The statistics don’t lie – most consumers (70%) say they use mobile payments not just out of convenience, but also because they get to take advantage of various rewards and discounts.
What’s more, it’s expected that mobile wallets will end up surpassing the use of both credit cards and debit cards by 2020.
Plus, the Starbucks mobile app goes the extra mile. It allows program members to easily check their balance and reload their cards in seconds.
5. Starbucks Rewards Feel Personal
When it comes to loyalty programs, making your program members feel like they have a more personal connection with your brand is paramount.
Well, Starbucks Loyalty Program did it just right by offering their patrons access to:
- Member Events
- Free Birthday Rewards
- Special Offers
The last one is quite a nice touch. Basically, Starbucks loyalty members can find personalized offers in their offer card on their Starbucks mobile app. And they can conveniently redeem the offer(s) with a simple tap.
Some Key Takeaways
We know that being a QSR owner means you rarely have a lot of free time. That’s why we also added this section for those of you who are in a hurry and want to just scan the article.
Here are the main ideas you can take away from the Starbucks loyalty program:
- Offer program members the chance to enjoy mobile payments. We recommend making it exclusive to them, as it will convince other customers to join your loyalty programs.
- Speaking of exclusive, provide the most loyal members (those who spend the most, frequent your store/restaurant often, and promote your services) access to exclusive rewards (be sure to make them meaningful, and a bit hard to obtain).
- Let your program members enjoy privileges such as being able to order and pay ahead. Not only does it make clients feel special, but it’s also more convenient for them (they don’t have to wait for the order) and you (wait times and lines are reduced).
- Remember to make your loyalty program budget-friendly, and ensure it targets the right customers. We’re talking about the patrons who actually look forward to spending their money on your services/products, and who don’t only do it just to gain access to rewards.
- Personalize some of the rewards, so that your program members will truly feel like your brand cares about them. In turn, that will make it easy for you to build a brand-centered community of loyal consumers that will promote your services.
How Do You Put All This Together, Though?
You now know all the ingredients you need to create a successful loyalty program. But how do you bring them all together?
The answer is right in front of you, actually – all you need is a great mobile app!
The world has pretty much gone mobile starting with 2016, and investing in a mobile app is the best way to get people excited about your loyalty program.
Of course, we’re not saying you should develop the app on your own (even if you have the necessary skills, it will just take too much time). Hiring developers (freelancers or an agency) doesn’t sound too ideal either, as something like that tends to be pretty costly.
So then, what should you do?
Well, your best bet is to rely on a quality app-building platform. You’ll get to easily create a loyalty app, and it won’t even cost you that much money.
What’s more, you won’t even have to look far to find the right app-building platform. That’s because Spoonity can offer you everything you need to create a loyalty app as successful as the Starbucks mobile app!
Spoonity – The Right Tool for Any QSR Owner
How do we know you’re going to love our platform from the get-go? Well, it features a fully white-label design, for one. Thus, you won’t have to waste any time on planning and working on the design phase at all.
With Spoonity, your loyalty app already comes directly customized with your very own:
Not only that, but you can add multiple locations as well.
Plus, Spoonity offers you access to just the features you need to make your customers happy and boost in-store productivity levels – online ordering and mobile payments!
Moreover, running marketing campaigns with Spoonity is a breeze. You have access to unlimited text messages, push notifications, and emails – not to mention that our platform comes with full marketing automation too.
And yes – before you ask – Spoonity offers 100% integration with the best POS providers/web services out there.
Also, remember what we said about how important it is to make sure you target the right customers? You know, the ones who are truly valuable for your business?
Well, Spoonity makes it very easy for you to do just that. Our platform features a comprehensive data dashboard which will let you fully analyze how successful your marketing campaigns and loyalty program are.
That, and all the analytics Spoonity provides you with make it possible for you to find out things like:
- Where your clients like to shop
- When they like to shop
- Which items sell the best
- Which patrons are the most profitable
Furthermore, Spoonity can even offer you access to SKU-level data about your clients’ buying habits – that’s how good it is!
And if all this info isn’t enough for you, then you’d surely like to know that Spoonity – along with one of our partners, Maitre’D – helped one of Canada’s first fair trade coffee companies (Bridgehead) run a successful loyalty program (65.000 members and counting).
Our platform even managed to increase quick-pay transactions by 88% and process up to 1.5 million payments for Bridgehead – all in one year!
If that got you more interested in our services, feel free to get in touch with us today – we’re available 24/7 and more than looking forward to helping you grow your QSR.