Friday, September 5, 2008

Starbucks launches loyalty program

Something exciting has happened – a real treat for caffeine addicts and java whores. Starbucks is testing a loyalty program on the Starbucks cards in Vancouver and Denver.

As we’ve mentioned before in this blog, Starbucks is a really great example of how machine-like efficiency and assembly like process can be combined with stellar customer service. I can’t remember the last time I had a negative experience at Starbucks, other than perhaps waiting too long in line because indecisive customers ahead of me thought it would be a good idea to dissect the menu and play dumb while fiddling for their change. It amazes me that the operation is able to pump out orders in rapid succession with high customization, minimal thought or subjectivity on the part of the employees and baristas, and still have employees look you in the eye and sincerely thank you for visiting.

As a regular customer, my reasons for patronage are likely consistent with other junkies:

  • I like the speed
  • I like the anonymity, especially early in the morning when I am not at my most chipper
  • I like the coffee – or perhaps I’ve just convinced myself that I like bitter coffee with exotic names
But some people actually like to talk to the Starbucks employees and ask them what’s going on. They want to know what’s good on the menu and how many grams of fat are in the milk for a venti ristretto latte.

So looking at these two types of customers, 1. the Recluse, and 2. the Gabber, what sets Starbucks’ customer service apart, is that both types of customers receive uncompromising excellent service. If I honestly just want to be treated like an order number, get my coffee and leave, then fine – Starbucks can do that. If I want to chat with the barista about the process or engage with them, that seems to be there too – just please don’t try it while I wait in line behind you. There’s a satisfying duality.

But anyway, back to the card. Starbucks says it will offer the tenth drink free and free coffee on your birthday with the program, in addition to some online DM you’ll receive. Great idea, but my only thought is that I am not sure what problem Starbucks has with customer loyalty. Does this program even make sense if cardholders will never go to another coffee dripper? Is it intended to make customers purchase more coffee, on average?


The loyalty component is one of the features that customers demand most from Starbucks. My thinking is that this trial is intended to get more existing customers to use the Starbucks card program. This payment form is faster than cash, credit, or debit, and promotes the proactive submission of a customer’s personal demographic data into their CRM program. Collection of the data is probably Starbucks’ main objective from this trial and that, in turn, can be used to streamline store operations from some beautiful final calculus when drink order is matched to person is matched to store location and time. Powerful stuff here.

And I love the candid customer feedback forum. The customer listening post is something brands cannot afford not to do in modern marketing.

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