Published By Upzaar Team
Loyalty Teardown: Starbucks Rewards
When you think about loyalty programs, the first thing that comes to mind is probably a punch card for your favorite local coffee shop. But loyalty programs don’t just exist in your local community-they can also be built into large-scale corporate enterprises. As an example, let’s look at Starbucks’ loyalty program: Starbucks Rewards.
This program has been around since 2009 and has seen massive success with its customers. The key to this success? It’s not hard to understand why it works so well. Just keep reading!
What is Starbuck's loyalty program?
Rewards programs are powerful tools that keep customers coming back to your business. Starbucks’ loyalty program, Starbucks Rewards, is an excellent example of how successful loyalty programs get customers hooked. The program has many benefits: it’s easy to use and understand and offers perks that bring real value to people’s lives.
What is Starbucks?
The infamous mermaid logo would find you there even if you lived under a rock. Starbucks is a global coffee company founded way back in 1971. Since then, it’s made its rounds worldwide, collecting more and more devoted customers as they successfully expand. You may have seen their cups plastered around the web (with customers’ names spelled quite interestingly). Or the newest “hacks” to try ordering on your next starbies coffee run, sending social media platforms ablaze as each new user-generated Starbucks-related video is quick to fly up the top ranks in popularity.
Why is every Starbucks-related news a hit? How can they have so many eyes, eager to pounce on their latest offers? It could be due to their flexible, customizable drinks, limited edition goodies, or even their cozy in-store atmosphere that’s perfect for typing away on your laptop, maybe to write up a blog like this!
Sure, those things might reel customers in, but to secure them and have such an intense following? It’s pretty logical to assume that their loyalty program, Starbucks Rewards, plays a considerable role.
How does the program work?
It started as a visit-based system but has evolved into a spending-based system from 2016 onward. To earn rewards, you have to hit certain thresholds. The more you spend, the more stars you get. You earn one star per dollar if you pay with cash or credit. If you pre-charge a digital card on the Starbucks app with funds, you get two stars per purchase if you opt for using that instead. You also get two stars per dollar when you use e-gift cards (tip! You can buy yourself a discounted gift card from places like Sam’s Club to save a little!) and their physical Starbucks card. You can also earn bonus stars when they allow you to do so, and those can be given within the same day or through an email where you’d have to redeem manually.
You can cash in your stars for freebies once you reach the rewards tier. For example, you can receive a complimentary addition to your customized order after earning 25 stars-and that’s just one reward level out of five! As you reach higher levels, you can earn even more rewards like a protein box or special cups and tumblers designed by talented artists. People tend to aim for at least 150 before their stars expire, as that gets them a free drink or a particular food item. The tier goes up to 400 stars; cashing lets customers take home merchandise such as coffee accessories or your bag to brew!
Some of the more desirable rewards can be difficult or time-consuming to earn. However, most rewards are easy enough for even casual users, even if you only order small items and drinks every day. Plus, although stars expire after six months when you redeem any, they automatically use the oldest stars you have first.
To participate in this program, you’d have to sign up or download their app and be a user in the US, UK, Canada, Puerto Rico, Australia, Brazil, Hong Kong, Ireland, Kuwait, Japan, or Mexico.
What makes Starbucks's loyalty program so special?
1. It doesn’t have over 25 million members for no reason.
Starbucks customers, the rewards are valuable. The program is designed to reward you for your spending at Starbucks, and it’s easy to see why that might be an attractive proposition. For many, a cup of joe is a staple in their morning routines and could even go as far as needing coffee to be constantly at hand throughout their day. If they’re going to buy coffee that much, and they’re sure they will, of course, enrolling in a program might help ease off the guilt-especially when they’d get a free cake pop for their efforts!
You don’t have to spend much extra money if you don’t choose to. You were going to spend that either way, but now you can get a small reward like a free drink or food item on a day you might need that extra boost. The more points you’ll accumulate over time — will make you feel good about yourself! Rather than having guilt be associated with more pay, positivity would be connected in its place, encouraging consumers to prefer to spend more subconsciously.
That’s not the only reason you’d feel good about yourself.
The even more significant reason is that as a member, the rewards are specifically tailored to you on occasion! This special feeling of being seen alone is a grand gesture to most, let alone the convenience of offers being just what you’d like! Based on your previous purchases, Starbucks can cook up what kind of offer you’d prefer, an offer you’d most benefit from.
As long as you keep buying things from Starbucks, more rewards accumulate until you can redeem them for bigger payouts. It’s also pretty easy to use these rewards, and Starbucks is very clear in its terms. Their straightforward approach is a critical factor in their success.
Keeping track of all those rewards is simple because there isn’t much tracking involved; they’re automatically applied when you make purchases through their app!
Customers don’t need to remember to participate in the program or keep track of their progress. The program automatically enrolls them and rewards them for each purchase upon scanning. Customers can check their progress online, see what rewards are available, and redeem them instantly. In addition, the program delivers rewards in different ways and other ways to receive them.
By offering options for earning stars (their loyalty points), customers can increase their spending at one time or take their time and earn them over time by purchasing smaller items that can be easily consumed.
There are “Double Down” days, where users receive twice the number of stars that particular day.
Some challenges allow customers to gain more stars.
Being a reward member, members can receive a birthday reward for a free drink, whichever size they want!
Promotional emails are frequently sent for avid users to stay on top of their newest offers or show offers before anyone else. Their most revenue-reeling is the personalized promotions for the individual user.
Members can also receive a free refill while in-store!
2. A good rewards program doesn't just have great benefits; it also creates opportunities to earn those benefits.
A rewards program is more than the benefits it offers. A good rewards program also creates opportunities for people to earn those benefits.
Members can win exclusive prizes through their member-only games. These include freebies! Incorporating the gamified approach is a leg up from old-school loyalty programs.
That’s why Starbucks has successfully created a loyalty program that feels like a journey, not a bombardment of ads.
3. Once you sign up, you're immediately eligible for rewards.
One of the best things about Starbucks Rewards is that you don’t have to wait to earn rewards. From your first sign-in, the birthday reward can be redeemed!
Why did they make this program the way they did?
They didn’t just make the program and dip. What is essential is how Starbucks is continuously improving on it. They listen to their customer’s feedback and upgrade as they see fit. Closing any gaps, they feel opened up as society changes and problems they previously had.
For example, many customers disliked the limited paying options they provided, so per customer feedback, they decided to branch out and add different ways to pay through the app and gave each way a weight to earn stars.
Customers also didn’t like the tiers concept, Green and Gold, so they removed them. This has customers feel heard and, in turn, more committed to staying with them.
Starbucks Rewards is an excellent lesson in leveraging data from multiple sources so that you can personalize your marketing messages for each user- a key step in creating an effective rewards program!
It’s an excellent example of how companies incentivize customers to spend more money at their stores. In this case, Starbucks rewards customers for spending more money at the store and buying more expensive items. This incentivizes people to buy extra drinks or snacks when they’re already in line for coffee every morning.
So the next time you find yourself at Starbucks, remember to check out their rewards program. You might find that it’s worth your while!