One of the most important uses of e-mail marketing is customer retention. Seeing as Starbucks is the most recognized global coffee company, you might think that they don’t need to put in much effort to retain their customers. While that may be true, any company can stand to increase customer loyalty by utilizing e-mail marketing opportunities, and Starbucks seems to have mastered their own method.
One of the reasons the coffee shop chain is so successful, is because of the incentives they offer for repeat customers. Starbucks has a loyalty program that rewards customers with 2 stars for every dollar they spend at the store, and then allows them to redeem a free beverage or food item for 125 stars. This system seems like a good enough incentive for customers to choose Starbucks over another coffee shop, right? Right. Which means Starbucks is doing great with customer retention and can ease up on marketing efforts, right? Wrong. They’ve already created a competitive advantage over their direct competitors in the coffee industry, so now they can focus on creating new opportunities to draw in their existing customers more frequently. This is when their promotional e-mails come into play. Every month, Starbucks will choose a day they might expect less traffic in their stores, and they offer double the amount of stars to be earned on every purchase that day. Then they simply send an e-mail out to let their Starbucks cardholders know and wait for a rush of star-hungry customers.
While double star day brings in more customers than expected, it doesn’t create as large of a spike in sales as a Star Dash does. About every 2-4 weeks, Starbucks will e-mail their subscribers about a new Star Dash promotion. Customers must click a link on the e-mail to express interest, and then they can earn extra stars if they complete the challenge. Some challenges include visiting and making a purchase multiple times within a given time frame, whereas others may require the purchase of particular items.
Recently, they offered 150 stars to customers who purchase an iced tea, a breakfast sandwich, and a bistro box lunch item within a five-day period. I received the e-mail about a week ago, right before my lunch break at school. Typically I’ll get lunch at a nearby restaurant and then go back to school and study at one of the Starbucks’ on campus. However, after viewing the e-mail, I immediately decided to have a breakfast sandwich and iced from Starbucks for lunch. I figured that I was going to end up studying there, and I would have to buy lunch anyways, so I might as well get stars for it. The next time I was back on campus, two days later, I purchased a bistro box for lunch and successfully completed the Star Dash challenge. In my case, Starbucks was able to take someone who was already near a location, and persuade her to buy food and beverage from them instead of one of the many other nearby options. By simply sending an e-mail with a limited-time offer and a call to action, Starbucks successfully achieved their goal of enticing customers to make multiple purchases and try new menu items.