My Starbucks Reward™ and Customer Loyalty – 9 Tips to Positive Reinforcement

Topics: Advertising, Branding, Business, Culture, Events, Ideas, Leadership, Marketing, Motivation, Sales, Strategy By: Gregg Jaden
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Do you know that there are many factors that can degrade the health of your customer loyalty program and negatively impact customer experience and loyalty? Your email marketing campaign can also make or break your brand image. An example of this is delivering content at the wrong time during customer’s buying decision or sending a badly written email with the wrong intended perception. I have the “pleasure” of experiencing this first hand and would like to share my experience and thoughts on how one email can negatively impact my perception and loyalty to a brand. At Broadwave, we specialize in email campaigns that can and do create an atmosphere of goodwill and help our clients deliver emails to their customers with nothing but an intended message. The right content can show their customers that they are there to help them with finding the right products or solutions. This is the essence of who we are and is the very reason why I’m sharing you with my story and what can be done to fix the wrong, not just band-aid it. If after reading my story and suggestions for better customer experience, you are left with an impression that content is key and technology is the driver, then I have done my job.

As a loyal Starbucks customer, I had been a gold card holder since 2008. I had been using their products for years for corporate events, client meetings, gifts, internal use, office use, combined marketing efforts and many other occasions.

On a regular Wednesday, February 27, 2013, at approximately 5:31 PM, I was finishing up my day when suddenly my email responder went off. I looked to see what came through. I saw on the subject “Your My Starbucks Rewards™ level has changed”. I immediately opened it to make sure something wasn’t wrong since I didn’t recall making any “changes” to my rewards card. As I was reading this email, various thoughts crossed my mind so effortlessly.

I opened my email and it stated, “You got your shiny My Starbucks Rewards™ Gold Card by earning 30 Stars in one year. To stay Gold for another year you needed 30 more Stars. Looks like time flew before you got all 30.” I thought, “Why are they telling me this?” I continued to read, “So you’re back to Green for now” I was like, “Have I really been demoted? Demoted for being a loyal customer of Starbucks for years?” I then proceeded to read “your Star count has been reset to zero. You still get great Green-level rewards – and it’s easy to get back to Gold.” At this time, I was not only feeling frustrated but also not valued as a customer. Not only are they demoting loyal customers, they have “reset” the accumulated points for this calendar year.

This email thus far had left me with the feeling that apparently I wasn’t buying enough drinks on my gold card that their internal team wanted me to and assumed that was all I spent with their company. I was left with many questions. Did they consider the possibility that perhaps I was going through my hundreds of dollars in gift cards that their mobile app wouldn’t easily let me transfer the balances onto my gold card? Did they consider the possibility that I have to pay for company purchases on my company card or have an employee expense them for our meetings? Did they consider that I might have to pay cash when I don’t have my gold card on me? Why would they demote any customer to a “green” level after almost six years of loyalty when most brands are thankful for their customers? Most brands would love the fact that they had a loyal customer base and would think of creative way to provide “thanks or incentive” to appreciate their customers.

The email then informed me how many privileges I lost for not paying with my gold card fast enough for their liking. The email ended with: “What’s next: Earn 30 Stars within 12 months to get back to the Gold level, where you can earn free drinks or food. Keep track of how many Stars you’ve earned, or check your status on your Starbucks mobile app.” What perceptions did this leave me? I saw this email as an incentive to not get demoted and keep a status level that was never explained to me in 2008. Had I known, would I carry the extra card if there was some sort of “rush” to buy products from them?

If you are like me and have been demoted, here is what to expect with the Green Level – “What you’ll enjoy at Green. A free reward on your birthday – whichever handcrafted drink or food item you want.* (This reward will load right on your registered Starbucks Card – learn more about digital rewards.)Free refills on brewed or iced coffee and tea while you’re in the store. Exclusive Green-level offers. (Now’s a good time to make sure you’re on the mailing list.) Get the full details”. In other words.

What does this mean to you?

Any brand can learn valuable lessons on what not to email loyal customers and potential new ones. Delivering an email such as the one mentioned here can leave the taste of sour grapes in your customer’s mouth. Here are my top recommendations:

  1. Go back to the basics. Remember the purpose of loyalty programs. They are incentives designed to create loyalty among customers and to provide the best rewards to loyal customers.
  2. Do not unintentionally provide negative reinforcement. Remember customers opt in to your email or text messages listing to get good news, not to read bad news. Negatively reinforced marketing tactics will do more harm than good to your brand image and reputation.
  3. Know what a good email campaign entails. Do you know the best time to email a new lead – that is, someone who opts in to your email list? Not hours later. Not days later. Within the first five minutes of receiving the lead. Include the following content or intended message:
    1. A simple thank you for their interest
    2. Special offers as an incentive to try out your products or services
    3. Only one question (customers do not want to have to read through a lot of verbiage to get to the point.)
    4. A short subject line that indicates what the message is all about but also hint at a specific benefit.

All of these mean that you’re using email to build trust and providing real values. What would customers think of Starbucks’ message of them losing their gold status and returning to green status? Does this email motivates them to continue to purchase or does it leave them running to another brand to get a better experience and to feel appreciated? Remember every recipient wants to know WIIFM or “What’s In It For Me?” when making a decision to open, read, and take action on your email. The last thing you want to show is that your recipient did something wrong or didn’t do something to get appreciated. When you focus on the customer and what they want when they sign up, your prospects will appreciate that you’re delivering more than just a sales pitch, that you’re actually delivering what they want, when they want it, and at the critical time in the purchasing decision stage.

  1. Craft the right retention emails. The “Your My Starbucks Rewards™ level has changed” is basically meant to be a retention email, but did Starbuck deliver their intended message? Or, did it leave them with an impression or two that didn’t sit too well with them? Remember, your retention emails should be your opportunity to hook your customers in for future sales. Avoid a hard sell. Make sure that the emails include useful tips and information that will ultimately show your customers and prospects that they can trust you. Doing so will build confidence and gain their respect and business.
  2. Build a better, robust customer profile. What Starbucks (and your brand) can do smarter is to build a better, progressive client profiling system to accurately analyze data so that the actual monetary value of each person that are served can be determined. A great profiling technique is to use your email campaign as a mechanism to let your customers set the tone and pace without making any kind of assumption. Evaluate your email marketing metrics and adjust your campaign based on the results. A good profiling system will help you determine your key performance indicators (KPIs) and the action that you can take to test the results of each email campaign. If your data doesn’t exist or you’re unable to get an accurate report, then another good alternative is to create a fun nationwide campaign to learn more about your customers, inclusive of a proper data management system CRM program. Once you actually know who your customers are, what they purchase, when, how, where and why, then you can better serve (not demote) them and increase your loyalty.
  3. Build a data tracking system. This will allow you gain much more effective data from your current customers so that you can build your program based specifically on customer preferences. Capture the data on your customers that can be used to better meet their needs. Such data tracking system should identify purchasing cycles, coupon redemption, and shopping patterns. Knowing what your customers are buying, when, and how often can help you anticipate customer needs and preferences, thereby increasing customer satisfaction while differentiating your product from that of your competitors’. Revisit your loyalty program and segment it based on the data – the actual spending, engagement, and customer profile. If we were consulting Starbucks, we would help them find a way to generate an email campaign to fit with the message that they want to convey. We could create an incentive program to broadcast email to their customers so that we can learn more about why they weren’t using a gold card in the first place.
  4. Have the right app. If you’re like Starbucks and want to provide your customers with an app that’s worthy of their business, you would want to have the right app with all the necessary features. Starbucks should fix the app so it is easier for customers to consolidate cards. I have found it to be frustrating to use since I wasn’t able to consolidate my cards, forcing me to delete the app after several failed attempts. Starbucks (and your brand, depending on your needs and business model) may want to build an installer app campaign where an actual human being goes and takes information from their current clients throughout the day and upload it on an app to a master database collection system. We have successfully done this with our clients with promising results.
  5. Look from an Executive POV. Somewhere and somehow the power that be that is in charge of the client management at Starbucks or their respective agency must had a sudden muddy epiphany that has probably turned off thousands of loyal customers and sent them running to their competitors to feel appreciated again. This is one way to find out what you’re doing wrong and fix it before it’s too late.
  6. Do not assume you know your customers better than they know themselves. Don’t make wrong assumptions. Starbucks should always consider how long their customers have had their Gold cards and customize their loyalty program based on customer needs.

The most strategic investment to your loyalty program and to your customers is customer research. By understanding your customer base, you can make informed decisions as to the best way to craft a loyalty program that’s a win-win for you and your customers. Special thanks to Jackie Ta for her contribution to this article. If you would like to learn more about best practices in loyalty programs and read a more in-depth look at My Starbucks Rewards™ program, check out this related article called My Starbucks Rewards.