Introduction
Starbucks, the global coffee powerhouse, owes its phenomenal success to more than just its renowned beverages. A driving force behind its massive popularity is the company's popular loyalty program, which has inspired countless restaurant chains and retailers across the United States. Launched in December 2009, the Starbucks rewards program has attracted a staggering 31 million active members, contributing a remarkable 60% to the brand's total revenue. The program's effectiveness was undeniable in 2019 when Starbucks reported a substantial 7% surge in sales, largely attributable to the loyalty program's prowess.
Starbucks Rewards Program
The Starbucks rewards program uses 3 key foundations to increase customer loyalty and engagement. The program is driven by a points system, using points for rewards and partnership loyalty.
A huge factor in the success of the Starbucks rewards program is driven by its gift card program. Starbucks said 1 in 6 Americans received a Starbucks gift card and sold over 58 million of them in 2022.
The Points System
Members collect ‘Stars’ with each purchase made through their Starbucks mobile app or registered Starbucks card. The structure of the program increases various forms of engagement which enhances customer loyalty and experience.
Rules of the Rewards:
- Earn 1 star for every $1 spent through a linked credit/debit card
- Earn 2 stars for every $1 spent with a Starbucks card
- Earn Bonus Stars through special promotions
- Earn miles or cashback with partnership programs with Delta or Bank of America
- Points will expire every 6 months
The Rewards
Members are allowed to redeem their collected Stars at different levels, which unlock unique rewards. Members can redeem their points immediately or save them for bigger rewards.
25 Stars - Customize your drink (espresso shot, nondairy milk, syrup and more)
100 Stars - Brewed hot or iced coffee or tea, bakery item, packaged snack and more
200 Stars - Handcrafted drink (Cold Brew, lattes and more) or hot breakfast
300 Stars - Sandwich, protein box or at-home coffee
400 Stars - Select Starbucks merchandise
Starbucks Partnerships
Starbucks has two partnerships that unlocks more perks from their rewards programs. Members with a Delta SkyMiles account can earn 1 mile per $1 spent and double Stars on Delta Travel days. Members who link their Bank of America card earn 2% Cash Back and Bonus Stars on qualifying in-app purchases.
My experience with Starbucks
I received multiple Starbucks gift cards for Christmas in December 2023, increasing my total amount to over $90. I’ve been to Starbucks twice since Christmas based on my order history.
Since December, Starbucks has sent me three of the same emails with the subject line “Hurry, redeem your Stars”.
How I’d Improve the Starbucks Loyalty Program
Starbucks Gift Cards are one of the top 10 gift cards given out every Christmas according to WalletHub. With
Since I got the same email 3 times over 3 months reminding me my Reward Stars were about to expire, Starbucks could have segmented the customer data better and targeted me with a much better-personalized member email. In merging the data about me as a member, it could have:
- Used my previous behavioral and geographic data - to target me based on previous interactions and purchases with Starbucks.
- Used my outstanding Gift Card balance of $93.42 as a way to motivate me to re-visiting a local Starbucks.
- Used illustrations of Stars in the email creative.
- Included a picture of my favorite drink – an iced coffee with half & half.
- Used the Starbucks greeting "What can we get started for you?" as a warm sign-off. A subtle way to remind guests of the Starbucks experience.
We re-created the “Hurry, redeem your Stars” email with new personalization based on our recommendations above. We flipped the script on the subject line to read “Come back to Starbucks and collect more Stars”.
Final Thoughts on Starbucks’s Loyalty Program
We hope this article helped illustrate that there are creative ways to personalize and optimize your communications with your customers. Marketers are only limited by their imagination and their access to the right data to create delightful customer experiences. We hope this shows that you can motivate your customers and members to take action without always having to a discount.