Starbucks’ mobile app: Creating a venti impact in customer loyalty
Thursday, April 25, 2019
Starbucks may have been ahead of its time in 2008 when it introduced its Starbucks Card rewards program. Encouraging coffee enthusiasts to register for a "frequent buyer" card, fans of the coffee chain found themselves drinking their way from Welcome Level through to Gold Level status.
As smartphone technology improved over the years, the loyalty program went hand-in-hand with Starbucks’ mobile app and mobile ordering system. What was originally seen as a form of convenience is now inspiring retailers to hop aboard the mobile loyalty program train.
The Starbucks rewards program began with a simple premise — visit 12 times, and receive a free beverage on your 13th visit. In 2016, the program changed, with each dollar spent rewarding visitors with 2 stars. Earn 125 stars and you receive a free beverage or food item of your choice.
While some were quick to criticize the amount one would have to spend in order to earn a free drink ($61.50), Starbucks has made it simple for registered members to have their stars add up. Double star days and weekly challenges (i.e., "Buy a coffee and a breakfast sandwich to earn 50 bonus stars"), have helped customers earn free items faster than ever before.
Starbucks recently changed its program’s offerings again, allowing customers to earn upgrades and free coffees faster than ever before. And their competitors, as well as retailers in general, are continuing to take note and create their own loyalty programs.
Last spring, Recode noted that the Starbucks app has long been one of the most successful payment apps in the U.S. — more so than Apple Pay, Google Pay, and Samsung Pay. Research firm eMarketer said it was likely that Starbucks would maintain this lead for the next few years, as 23.4 million users in the U.S. alone had made an order on their mobile-and-pay system, accounting for 12% of transactions in a single quarter.
Given these statistics and the current smartphone landscape, marketers have realized that customers are on their phones quite often. With the convenience of a mobile app, customers are able to track their progress, reload their registered Starbucks Card, and be notified of upcoming bonus events.
I spoke with Donato Catizzone, a programmatic advertising account manager, who frequently uses Starbucks’ mobile app. Originally, he used the app to streamline the ordering process and limit the level of miscommunication that can occur, but now he’s found that collecting stars for free drinks is a huge bonus.
"I’m not typically a person that will stick with a brand just because of rewards, but the mobile order and in-app payment feature has made me rethink going to a competitor that doesn’t have this," he shares.
A recent piece by Marketing Land states that "brands that relied so heavily on TV advertising in the past are still learning how to market appropriately in a mobile world." While consumers continue to cut the cable cord in favor of streaming services, corresponding commercials and offers have found a new identity in the mobile sphere.
It goes on to state that customers who have taken the time to download a company’s app are among the most loyal customers the brand has — and their advocacy is ripe for brands to develop. Whether it be through video content or push notifications, apps have been an exemplary way to deliver content to a receptive audience at any time.
Catizzone sees the positives of branded mobile apps: "It puts the option of being marketed to in the hands of the user and creates a less intrusive image. Once I download the app, I choose to see what promotions and news the company will be promoting."
Where do we go from here? Mobile loyalty programs are still in their early stages and are continuously being developed.
Catizzone points out that one deal-breaker is an app’s user interface: "If the app feels complicated or doesn’t make me feel like I’m benefiting from using it, I will likely delete and download a better one." Companies would be wise to ensure an exceptional user experience should they wish to avoid a Snapchat layout fiasco.
Even though online shopping and order-ahead pick-up services have led some to predict the "death of retail," mobile engagement helps keep customers coming back even when they aren’t experiencing an in-person interaction. In fact, the offers might be helping them make more appearances than they originally would have assumed.
What’s an extra trip to Starbucks in order to redeem a free iced caramel macchiato? The app and its bonuses are poised to reign in the years to come.
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