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Strategic Changes To Starbucks Rewards Has Increased Revenue & Loyalty

May 14, 2019 Sarah Cavill

starbucks

Last year’s changes to the Starbucks Rewards program yielded significant gains for the ubiquitous coffee chain. A recent update from Starbucks CEO Kevin Johnson detailed Starbucks Q2 growth with some interesting details about the ways in which their app-based rewards program scaled revenue and increased memberships.

Continued Changes To The App Refine Rewards And Increase Brand Loyalty

Recent changes to the Starbucks Rewards program included moving from frequency-based to spend-based rewards, and the results have been impressive. “With respect to driving digital relationships, we are pleased with the continued momentum of our Starbucks Rewards program. In the second quarter, we expanded our active member base by half a million customers, a 13% increase that takes active Rewards membership to 16.8 million,” said Johnson.

Another spate of changes to Starbucks Rewards was launched April 16th, offering easier and more frequent opportunities to cash out the stars earned with purchases. The updated program eliminates the green and gold tiers and allows members to start earning rewards right away, with 25 stars being the entry point for redemption.

The Starbucks App Is A Winner For Their Brand And Consumers

starbucks

The only way to access the Starbucks Rewards program is through the app, with benefits including mobile order with sanctioned line-skipping, “Happy Hours” for app-users offering access to specials for certain drinks at certain times, and other deals generating loyalty and encouraging repeat visits to Starbucks.

The result of the convenience and benefits of the Starbucks Rewards program is a serious uptick in business from members. “This momentum has a positive impact on our results with Starbucks Rewards members accounting for 41% of sales in U.S. stores in Q2,” said Johnson.

Many consumers are moving toward cashless exchanges, using Apple Pay and other frictionless forms of payment. Consumer reliance on mobile, and the fact that most consumers are rarely without their phones, is an integral part of digital marketing optimizations that include rewards programs. Convenience – and free stuff – can drive loyalty and revenue, and the ongoing, successful tweaks to Starbucks Rewards illustrate the effectiveness of an app-based mobile strategy.

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About the Author

Sarah Cavill

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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