How Starbucks Became #1 In Customer Loyalty With Its Rewards Program (2024)

Starbucks is the leading coffee chain in the world, known not only for its quality but also for the programs created for its customers. With nearly 31 million active members in the U.S. alone, marking an impressive 15% growth in the past year. The company has set a new benchmark for customer engagement in the retail sector. The success of Starbucks is a testament to a brand that fully comprehends the value of customer loyalty and knows just how to foster it. In this article about Starbucks loyalty program, we will delve deep into the strategies that have enabled this industry giant to succeed and identify the key takeaways that can be applied to your business.

Impressive Stats of Starbucks Loyalty Program in 2023

Starbucks’ Rewards program has become a hallmark of customer loyalty, boasting a dynamic community of 31 million active U.S. members. This dedicated base is a cornerstone of Starbucks’ financial success, contributing to an impressive 41% of U.S. sales. The program’s 16% year-over-year growth is a clear indicator of its effectiveness and influence in the retail space.

• Members are 5.6 times more likely to visit a Starbucks outlet daily, showcasing the depth of their loyalty.
• Starbucks’ loyalty program achieved an impressive American Customer Satisfaction Index (ACSI) score of 78 in 2022.
• 21% of Starbucks customers return within three days, with 10% returning within just one day, highlighting the program’s efficiency.
• 71% of Starbucks app users visit a store at least once a week, underscoring the program’s strong user engagement.
• Starbucks excels with a noteworthy customer retention rate of 44%, surpassing the industry average of 25%.

[Sources: Usa Today, Skift, Pymnts, Smile, Alchemer, Statista, Page Fly, Harvard, Mjv Innovation.]

Overview of Starbucks Loyalty Program

The Starbucks loyalty program – Starbucks Rewards, is a symbol of its identity and brand. The structure of this program consists of 2 levels with 2 icon colors, Green and Gold; each level will have separate incentives. With every standard spend, customers earn one star, which can be used to redeem a range of rewards, including free products, recharges, and personalized incentives. The program is regularly updated, and the Starbucks Rewards app now functions as an in-store digital card, allowing users to access the menu and place their orders before arriving at the cafe. With Starbucks Rewards, customers can take advantage of a variety of benefits and enjoy a more convenient and personalized experience.

The loyalty program has been incredibly successful, providing numerous benefits to the company. By meticulously tracking earned points and notifying customers of upcoming rewards, Starbucks can foster higher levels of customer engagement, incentivizing them to make repeat purchases. This, in turn, helps Starbucks establish and maintain long-term relationships with its members. The program boasts an impressive 16 million active members as of 2019 and has played a significant role in the brand’s exponential growth and popularity among coffee lovers.

How Starbucks Became #1 in Customer Loyalty with its Rewards Program

Tier Rewards Structure

Starbucks rewards program is built on a tiered system that rewards customers for their loyalty. The initial Green level provides foundational perks like free birthday treats, while the advanced Gold level offers greater rewards, including free refills and monthly bonus stars. This approach not only recognizes but also incentivizes customers to frequent Starbucks more often, with the promise of escalating rewards.

The program’s success lies in its ability to cater to a diverse customer base. It offers a clear path for members to earn more benefits as they climb from Green to Gold status. By doing so, Starbucks creates an inclusive environment where every purchase brings a customer closer to the next set of rewards, keeping them engaged and committed to the brand.

Points can be Earned at Non-Starbucks Locations and Mobile Integrations

Starbucks has expanded the reach of its Rewards program by enabling customers to earn points not only at its own cafes but also when purchasing Starbucks products in various grocery stores. This strategic move allows members to gain points through multiple channels, encouraging them to choose Starbucks products even outside the traditional coffeehouse setting, and also brings value to partner retailers.

The integration of the Starbucks rewards program with the mobile app is central to its user engagement strategy. The mobile app offers more than just a way to collect points; it includes fun extras like games and music. Members can use their phones as a digital card, conveniently ordering ahead and skipping the queue. To keep customers coming back, the app leverages push notifications to alert members to new promotions and offers.

Starbucks’ embrace of mobile technology with its rewards app is a key driver of its loyalty success. By providing a seamless and convenient way to interact with the brand, the app has become an indispensable part of the Starbucks experience. Similarly, in the wider retail landscape, solutions like ConnectPOS, with its PWA App and Self-Service POS, streamline operations during busy periods. They minimize wait times and bolster efficiency, showing that the combination of mobile technology and retail operations is a winning formula for enhancing the customer experience and managing high traffic with ease.

Read More: Start the dream of becoming the next Starbucks with the ultimate guide to open a coffee shop.

Personalization for Members

Starbucks has mastered the art of personalization within its loyalty program by leveraging customer data to deliver customized rewards and offers. This deep level of personalization has proven effective, with a significant portion of purchases being driven by these tailored promotions. The program’s design ensures that customers find value and relevance in every interaction, making the Starbucks experience both comfortable and enticing, which in turn fosters customer loyalty and repeat business.

Similar to Starbucks’ approach, ConnectPOS integrates with established loyalty programs like Loyalty Lion and Amasty, bringing personalized loyalty benefits directly to the point-of-sale for merchants globally. This integration empowers retailers to offer personalized rewards and gift cards, enhancing customer engagement and satisfaction. By adopting a similar strategy to Starbucks, ConnectPOS helps retailers attract and keep loyal customers, providing a competitive edge in the retail industry.

Member Specials

Starbucks has taken its loyalty program to the next level by offering exclusive events to its members, which not only helps to foster a sense of community and belonging but also gives members the added convenience of sending gift cards directly through the app. By becoming a member, you’ll be the first to know about new product launches and seasonal offerings, thanks to these exclusive events.

For coffee chains aspiring to replicate Starbucks’ loyalty success, ConnectPOS emerges as an essential tool. It assists in efficiently managing loyalty programs by meticulously recording and storing transactional and member data.

Moreover, ConnectPOS allows for the smooth implementation of loyalty settings from the backend, with robust extensions from trusted providers, ensuring that members always have access to the latest specials and rewards.

Conclusion

Starbucks rewards program stands as a benchmark in customer loyalty, thanks to its tiered rewards structure, strategic point accumulation across stores, personalized member experiences, and exclusive member specials. These elements work together to create a compelling value proposition that drives repeat business and deepens customer engagement.

For businesses looking to emulate Starbucks’ loyalty program success, ConnectPOS offers a versatile and powerful solution that can elevate the customer experience to new heights. Interested in transforming your customer loyalty strategy? Contact ConnectPOS to discover how we can help you build a robust loyalty program!