The World’s Most Successful Loyalty Program

Estimated Read Time ➡️ 1:28 minutes

How do you boost revenue, increase customer retention, and build trust with your brand all in one? You start a loyalty program.

And if you’re going to start one, you may as well learn from the best.

With 33.8 million active members in the USA alone (10% of the population), Starbucks currently runs the world’s most successful loyalty program.

How does it work?

Customers earn points (“stars”) for every dollar spent at Starbucks.

As stars accumulate, customers can redeem them to buy drinks / food. In addition, their loyalty program offers users a free birthday drink and free refills.

That’s a lot of free stuff right? Maybe, but let’s see what Starbucks gets out of it.

In a 2022 call, interim CEO Howard Schultz said to analysts – “Our loyal Starbucks Rewards members drove a record 53% of U.S. company-operated revenue.”

Key Takeaways:

• Loyalty programs work best in businesses that have recurring purchases or who want to build strong customer relationships.

  • Examples: Retail stores, restaurants, hospitality, travel business, etc.

• Repeat Purchases lead to higher revenues and higher customer lifetime value.

• Reframe a discount as a reward. Customers shop with you because they feel valued and not because you’re the cheaper alternative.

Implementation:

Low Cost Options:

• Give punch cards to customers & offer a reward once the card is filled out.

• Offer rewards for referrals, reviews, likes, and follows…Not just purchases.

• Take customer emails and email them with promotions, deals, and early access

Other Options:

• For In-Person Businesses: Leverage your Point Of Sale System (Square POS, Shopify POS, Clover, Toast, etc.) to create the loyalty program.

• For e-Commerce Only Businesses: Options include software like Yotpo, Loyalty Lion, Xoxoday.

See you on the next one!

— Oleg