While in line at Starbucks to pay for my morning coffee, I found myself behind someone who was paying with cash. The cashier paused in surprise, “Why aren’t you using the Starbucks app yet?” The barista had a point; this young 20-something epitomizes the target market for Starbucks’ mobile app, a loyalty program that allows users to preload money onto a virtual Starbucks card and pay for their caffeine fix through a quick scan of their phone. Users earn stars for each transaction, which can be redeemed for free beverages. This customer, who chose not to pay with his phone, has become an anomaly amongst the Starbucks frequenting Millennials.
Starbucks’ wildly popular loyalty program is perfectly tailored to Millennials. What Millennials want in a rewards program is what they want in all marketing – tailored, exclusive content that they can see and use on their phones. Starbucks provides the tailored content by having the home page of the app display how many stars are needed until the customer earns a free drink, a list of available rewards and messages that offer discounts or special products. The exclusivity is maintained through the achievement of the illustrious Gold Level, a status reserved for dedicated Starbucks customers. Additionally, the fact that the program only works with mobile is the perfect platform for Millennials, who are constantly on their phones. Starbucks’ profit has increased significantly in recent years and CEO Howard Schultz credits the loyalty program as a major factor.
Hot tweetaway: What brands can learn from @Starbucks #starbucksrewards #loyaltyprogram? insit.es/1HeKplN by @GilaAllswang via @CoolBrands #millennials
While Starbucks is clearly doing things right to attract and maintain loyal customers, many companies are now losing touch with what Millennials are seeking in a loyalty program. This recent study by Grass Roots Group describes how more and more Millennials are leaving loyalty programs. If a brand does not tailor their offerings to its customers, Millennials will not feel it is worth their time or money to remain loyal to that brand. With 49% of Millennials claiming that offers and rewards are the most important factor they consider when buying from a brand, companies should work to make sure their loyalty programs are Millennial-friendly.
Hot tweetaway: More and more #millennials are leaving loyalty programs insit.es/1HeKplN by @GilaAllswang via @CoolBrands #geny #loyaltyprogram
Brands should take a lesson from Starbucks in order to stay relevant to Millennials. The big factors to reel in Millennials are mobile-friendly, exclusive and personal. It may be pricey to implement all three of these components, but brands can try to incorporate them to whatever extent they are able to.
Hot tweetaway: 3 essentials for your #loyaltyprogram: mobile-friendly, exclusive and personal insit.es/1HeKplN by @gilaallswang via @coolbrands #millennials #geny
As a proud Starbucks-frequenting Millennial, I can vouch for the effectiveness of their loyalty program. Having the ability to pay and earn rewards through my phone has made my Starbucks experience even more enjoyable. I look forward to seeing how brands emulate this Starbucks model within their own loyalty programs!