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What makes Starbucks the best of the best
?
What makes Starbucks the best of the best
?
First, 1 in 4 Starbucks customers are Rewards members, and 40% of Starbucks revenue is generated from those 25% of customers
Quick math tells us that this is Starbucks most valuable customer cohort
Source: HBS
Quick math tells us that this is Starbucks most valuable customer cohort
Source: HBS
Second, Starbucks uses their native App and Reward program as a marketing tool
They highlight new products and services and localize the Starbucks experience
This is both informational and transactional within the app experience
They highlight new products and services and localize the Starbucks experience
This is both informational and transactional within the app experience
Third, the data Starbucks captures from its Reward Members is incredibly powerful
It allows Starbucks to personalize the experience for any single user, while also devising ways in which it can convert more customers to Rewards Members
Source: Forbes
It allows Starbucks to personalize the experience for any single user, while also devising ways in which it can convert more customers to Rewards Members
Source: Forbes
Fourth - and probably the craziest point - Starbucks borrows more than $1.6B from their customers stores value (gift card) accounts
This effectively acts as a loan to Starbucks, and since roughly 10% of gift card loan value goes unclaimed, Starbucks has a -10% interest rate https://twitter.com/jp_koning/status/1160387043790413824
This effectively acts as a loan to Starbucks, and since roughly 10% of gift card loan value goes unclaimed, Starbucks has a -10% interest rate https://twitter.com/jp_koning/status/1160387043790413824
This is all made possible by the fact that Starbucks has more than 30k physical stores, and that coffee (caffeine) is an addictive drug
Starbucks has done an incredible job (since 2008) of identifying the behaviors of coffee addiction and monetizing all elements around it
Starbucks has done an incredible job (since 2008) of identifying the behaviors of coffee addiction and monetizing all elements around it
Starbucks Rewards program growth
