Brewed Success - Loyalty at Starbucks

Written by David McKay
Image Credit - Starbucks Webcasts & Presentations

Image Credit - Starbucks Webcasts & Presentations

This month marks a first in retail loyalty programming - Starbucks customers will be getting loyalty points for purchases made through grocery channels.  Customers will peel a sticker from product bought and enter a the sticker code into their Starbucks Card account online.  The company continues to develop it's channels, achieving almost $1.3 million in revenue FY2012, thanks to leading positions in both premium coffee at grocery, and the #1 ready-to-drink coffee.  Integrating channels with their significant loyalty program is key to Starbucks' growth.  

Although, for many retailers a loyalty program does not necessarily mean a successful loyalty program, 30 percent of Starbucks' transactions are prepaid on Starbucks Cards.  The company boasts 6 million active users today, and growth of 80,000 new members per week.  According to McKinsey & Company, most loyalty programs generate 20 percent of profit for companies, at the high end - Starbucks is enjoying a 10 percent difference to the positive.  

Image Credit - Starbucks Webcasts & Presentations

Image Credit - Starbucks Webcasts & Presentations

The company's partnership with Square allowing for mobile payment, with the integration of rewards on smartphones has lead to 100,000 app downloads per week - coming from both current reward members and new.  Starbucks' program is able to provide members with instant benefits with every purchase; the more purchases that occur, the greater the rewards.  They continue to set the benchmark for innovation and growth, by engaging their customer from a variety of angles, keeping the customer relationship top of mind underpins their success. 

Company information from Starbucks Newsroom.