The Science Behind Starbucks’ Massively Successful Customer Loyalty Program

Starbucks has completely revolutionized the coffee business. It took on something that existed from ages and completely overhauled it from its core. Today, Starbucks is regarded as the world’s largest coffee house with high regards for its customers.

The Starbucks success is a story of taking every business aspect differently. They have time and again challenged conventional business methods in the food and beverage industry. And, today we are going to discuss one of the aspects that they completely revolutionized, Customer Loyalty.

Since it’s inception, the Starbucks Rewards Customer loyalty program has taken the market by storm. It has become a leading example, of how a customer loyalty program should be implemented.

A little history of the Starbucks loyalty program

Starbucks entered the customer loyalty space with its Gold program, where customers paid an annual fee of $25 and got 10% off on all offerings throughout the year. But as time proceeded, the program started fading away. So, Starbucks had to come up with a new program .

Enter today’s Starbucks Rewards, a free, 3 tier loyalty program. Here’s what you are offered, if you choose to enroll for the program –

  • Customers earn “Stars” by paying with a registered Starbucks card or the Starbucks mobile app, or by entering Star codes, one transaction equals one Star.
  • Welcome level — just register your card and get a free birthday drink, plus a free customization for your first drink.
  • Green level — earn five stars to add free in-store refills to your Welcome perks, and 2 customization to your drink instead of one.
  • Gold level — earn 25 stars in 12 months to get all of the above benefits, plus a free drink or food item after every 10 Stars, special email or text offers, and a Starbucks gold card.

This reform made the program an instant hit and today it’s regarded as one of the best in class, customer loyalty program ever to be offered.

So let’s dive deeper and see what makes the Starbucks Rewards program so successful. Let’s begin.

Starbucks Rewards Customer loyalty program

Upon implementation of the Starbucks Rewards customer loyalty program, Starbucks reported an increased revenue of shocking $2.65 billion, with brand executives pointing towards their reward program as one of the major enabler for such an increase.

We are going to discuss 3 factors that we think made their customer loyalty program one of a kind.

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