Feel free to add any relevant information you could find about the case, the issue or the company. As a suggestion, you can provide some introduction about the case (company biography and history etc.) Used appropriate props (such as charts, figure, tables, and video/audio representations) that show considerable work/creativity. Just use information from the case file attached.
Answer the following questions:
Which Starbucks rewards feature in the mobile app is most valuable to the company? Which feature and rewards are most important to stay relevant to customers in the future?
Could Starbucks have been as successful if it had offered only your physical Starbucks rewards card and never introduced an app?
Has Starbucks overlooked a social media channel that could be valuable to the organization?
Starbucks Corporation is a United States-based multinational operating a chain of roastery reserves and coffeehouses. Jerry Baldwin, Zev Siegl, and Gordon Bowker founded the company in 1971 in Seattle, Washington, its current headquarters. Starbucks is currently the largest coffeehouse chain globally and operated in more than 30,000 locations globally and over 70 countries (Sacks). The company sells hot and cold drinks and other products, such as microground instant coffee, whole-bean coffee, caffe latte, full- and loose-leaf teas, espresso, Frappuccino beverages, fresh juices, and snacks. The company has been successful over the years and expanded its services across the world. While Starbucks has other success factors, one of the most important is an investment in technology, especially social media for marketing and customer relations management.
The question 1
The loyalty rewards app has been valuable to Starbucks since it engages approximately 48% of its customers. Digital engagement of customers is necessary for the digital business environment and creates a competitive advantage. The star loyalty feature is the most valuable to the company because it attracts and retains committed customers who return for more products, earning revenue. The mobile loyalty app includes a rewards system that gives stars to customers upon their interaction with the company, such as making a purchase (Oragui). The app tracks customer activity and rewards them depending on the number of stars they receive. The actions occur within Starbucks stores and shops within large stores, such as Target Store. Customers can also gain stars by buying tea or coffee from online stores or at LA Boulange. The reward system collects information from customers, which the management takes advantage of when communicating or promoting their products or offers to customers.
Customers want to feel appreciated and to gain value from their money. Even in the future, mobile apps will remain relevant for Starbuck’s customers. The app features that will be beneficial to customers will provide them with critical information about product offerings and award them points for purchases. The gifting feature or a way of redeeming accumulated points, such as using them for future shopping, will create customer loyalty to Starbucks. The company should invest in a more user-friendly mobile interface to increase customer visits and reduce the time they spend buying. Besides, the app helps customers track their points and make them easy to redeem when needed. Customers should easily and pay through the app and earn stars in the process. They should then easily use their stars or rewards for free drinks, food, and merchandise. Starbucks will be a market winner by investing in mobile apps that ease customer transactions and reward loyal customers.
Without any doubt, integrating the mobile app into the company’s customer service management process has improved Starbucks revenue through increased customer engagement. Technology remains one of the key success drivers for Starbucks. Therefore, its customers are accustomed to technology, including the app for purchases and earning rewards. The app is not limited to rewards but also supports purchases. Most customers nowadays prefer the convenience of buying online instead of visiting the physical store. Therefore, they would also choose an online reward system that tracks their purchases. Besides, the app provides them with other “challenges” to earn extra “stars” for higher rewards (Oragui). Navigating through the app is easier and faster than going to the physical store to receive or redeem one’s points. They can even track their points balance to manage their rewards for loyalty. Starbucks could not have as effective as it is currently if it offered only your physical Starbucks rewards card and never introduced an app. The graph below shows that the app is more effective than traditional “card only” loyalty programs in promoting sales activities.
(Figure 1: Are Loyalty Programs Worth it for E-Commerce Websites?, 2021. h Accessed April 1, 2021 at: ttps://neilpatel.com/blog/loyalty-programs-ecommerce/)
The reward app is the reason Starbucks customers keep coming back for more. A physical reward system could not have achieved the current level of success (48%) since it would not achieve a similar customer engagement level as the app reward system. Customers using the app enjoy convenient ordering and paying ahead of time, hence, enjoying a more significant user experience than ever before. Customer engagement has benefitted Starbucks considerably, including growth in sales and revenue since more customers seek such a positive experience. The app enables them to create and maintain digital relationships with the firm and other Starbucks Rewards program members (Oragui). Figure two bellows show the importance of online partnerships that can benefit Starbucks. The app creates a community of committed customers for the company. Such benefits would be impossible to achieve if the company used a physical reward system instead of the app.
(Figure 2: Are Loyalty Programs Worth it for E-Commerce Websites?, 2021. H Accessed April 1, 2021 at: ttps://neilpatel.com/blog/loyalty-programs-ecommerce/)
Starbucks has created a considerable social media presence, improving its customer engagement for higher sales revenue. Starbucks is among the most engaging brand on digital platforms. The firm has online activities in most social media sites, including Facebook, Twitter, Pinterest, Instagram, and YouTube. Besides, the company has an app that it uses to engage customers and support their online transactions. The firm’s extensive use of social media emerges from the idea that coffee is all about socializing and taking coffee is a social endeavor (Adeola et al. 62). Since people love meeting to have coffee, Starbucks recognizes the need to begin conversations about the brand on social media and build communities of committed consumers. Customers visit social media sites to obtain information about the firm’s products and brands. Clearly, Starbucks has an adequate social media presence in all sites that are likely to generate the intended customer engagement.
Starbucks’ social media team has effectively explored the most suitable social media platforms that could reach as many customers as it desires. The company has created a social media strategy that allows it to develop a community of coffee consumers, build a brand personality, and support sharing. Notably, not all social media sites are worth the attention since they have relatively low followership. Thus, Starbucks has ignored only social media sites that would not make any difference in its marketing and sales. The company has entered into social media sites that can enable it to access a larger market and promote and sell its products. The sites have allowed it to create positive relationships with customers and customer loyalty. Thus, instead of investing in new social media sites, the company should improve its presence in the current ones and update its app and website regularly to maintain a high level of customer engagement and competitive advantage.
Adeola, Ogechi, Robert Ebo Hinson, and Olaniyi Evans. “Social media in marketing communications: A synthesis of successful strategies for the digital generation.” Digital Transformation in Business and Society. Palgrave Macmillan, Cham, 2020. 61-81.
Are Loyalty Programs Worth it for E-Commerce Websites? (2021). Accessed April 1, 2021 at: https://neilpatel.com/blog/loyalty-programs-ecommerce/)
Oragui, David. “The success of Starbucks App: a case study.” The Manifest 12 (2018).
Sacks, Danielle. “The Multimillion Dollar Quest To Brew The Perfect Cup Of Coffee”. Fast Company, 2020