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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

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Senior Marketing Communications Writer, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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