Cues From a Coffee King: What Any Business Can Learn From Starbucks’ Loyalty Program

Last month, Starbucks was in the headlines once again with its industry-leading loyalty program. In addition to offering birthday specials and personal perks to its best customers, the coffee king is teaming up with transportation network company Lyft to expand its loyalty rewards to an even wider network.

Since the 1970s, the coffeehouse company has spread from a Seattle shop to a global presence, and is now the largest of its kind in the world. So how does Starbucks do it? Finances and frappuccinos aside, one key to its success could be the company’s continual effort to treat its customers right. Offering a loyalty program that’s easy to enroll in and results in mega-perks for frequent patrons is one step in that process.

Any business, big or small, can take a cue from Starbucks’ customer strategy. Rewards programs help attract customers and build brand loyalty, and one of the best ways to begin building customer relationships is through email marketing. Here are five best practices for implementing and maintaining a successful loyalty program:

1. Personalize your program. Some perks will be more appealing to some customers, while others fall flat. To figure out what your target audience wants most, use data analytics to develop a personalized loyalty program. Email marketing tools like segmentation and A/B split testing can provide you with the metrics you need to determine which perks will pique customers’ interest and how to best package them to drive enrollment.

2. Partner up. Partnerships like the one between Starbucks and Lyft benefit all parties involved. Consumers get double the benefits, while the companies get twice the exposure.

Be strategic when choosing a loyalty program partner. Obviously, you want to make sure whomever you choose doesn’t compete with your brand, but instead complements it. For instance, if you sell candles, perhaps partner with a flower company. Geography can help determine partners as well. If you own a clothing boutique, partner with another store down the street so that shoppers make sure to stop in whenever they’re out and about.

3. Get the word out. Customers can’t enroll in loyalty programs unless they know about them, and email is the most effective way to get the word out.

Transactional emails are a great way to promote loyalty programs. For example, offer enrollment options in your thank-you and shipment confirmation emails. Since these contacts are paying customers, they're likely more interested in joining a rewards program than others on your list.

In addition to email messages, make sure to use your company’s social channels. This strategy will result in digital word-of-mouth marketing for your brand and its rewards program, and soon sign-ups will increase exponentially.

4. Incentivize upward. Special treatment is a sure way to motivate customers to continue buying from your brand. Create levels of loyalty members based on amount spent and frequency of purchases, and be sure to always promote the next level to your contacts by teasing the discounts and deluxe treats they could be getting if only they made one or two more purchases. However, don’t neglect the lower-level brand lovers; make sure to dole out rewards at all levels, but save the best for the best.

Another simple and cost-effective way to make customers feel special is to give them statuses and titles based on their amount of brand loyalty. Think along the lines of silver, gold and platinum levels.

5. Keep it simple. Successful loyalty programs should aid in building relationships with your customers and, therefore, they should be all about them, not you. In other words, let customers enroll without a catch. Don’t force them to open a credit card or make a large purchase just to feel like your brand values them.

By implementing the above tactics into your loyalty program, your brand will be sure to have more devoted customers in no time.

Seamas Egan is the manager of revenue operations at Campaigner, an email marketing service. Seamas can be reached at seamas.egan@j2.com.