Coffee is an important part of my day. I love a good cup of joe – and I’m clearly not alone – as the proliferation of coffee shops in every neighborhood and business district seems to go on unabated (Starbucks now has over 24,000 locations in 70 countries).
I’ve been a Starbucks customer a long time – from way back when the doubters questioned consumer willingness to pay more than a dollar for a cup of coffee. Funny that many of those same people now spend $3 and up on a latte. I’ve enjoyed a Starbucks Venti Americano in San Francisco, LA, Portland, Seattle, Vancouver, Chicago, Dallas, Atlanta, Boston, Pittsburgh, New York, Orlando, @ the Louvre in Paris and the airport in Mexico City. The Starbucks app is one of my most frequently used.
Imagine the quantity of data Starbucks has on me. They know if I’m local or traveling. They know if i’m alone or with my family. They know that calories now matter, given my switch to a pack of almonds from a (delicious) blueberry scone. They know if I’m commuting to the city or working from the home office. I could go on for days – as the insight possibilities seem almost endless.
Our local Starbucks has a Clover machine. If you’ve never had a cup of coffee from one of these – you really should try it. (here’s a video from Wired on the $11,000 coffee maker) The Clover machine presents the Starbucks customer with a completely different customer experience – as they can choose from a selection of premium coffee beans and have a cup specially brewed – instead of settling for whatever’s been brewed in the larger vat. It’s not cheap: $4 vs. $2.45 for a standard grande size coffee. Probably safe to assume that customers choosing Clover: a) spend more than an average customer; and b) buy more of the higher priced beans to take home.
So given the wealth of customer data I’ve generated over the years and a clear preference that I’ve signaled for a premium coffee experience, I have one simple question:
Why do I get the same marketing content as any other Starbucks customer?
Compare what I’ve described about myself above against a few recent Starbucks communications:
- I opened my Starbucks app this morning to “A Splash of Spice – New Spiced Cold Brew” and a “Merry Mondays” offer to get 40 bonus stars if I spend $20 or more after 2pm”.
- Found a similar Starbucks email in my inbox this morning alerting me to “Merry Monday”.
Pretty sure these are national promotions. Going back through the almost daily email communications I receive from Starbucks & Starbucks Rewards shows a constant focus on “buy this…get x number of reward stars” promotions. They certainly have nothing to do with the Sumatra I’ve been loving the last few months.
So what? Why does it matter? I’ll tell you why: Starbucks is selling a Reserve Roastery subscription on starbucks.com. For $19 a month you get “rare, small-lot coffees hand-selected exclusively for subscribers”. What customer profile is most likely to sign-up for a subscription? My bet: the Clover customer. I’m a Clover customer. Have I heard about the Reserve Roastery subscription from Starbucks? No.
To Starbucks, I’m just like any other “star hungry” loyalty member. Do X, get Y stars. Admittedly, if you ask anyone in the loyalty marketing space, they won’t be able to contain their enthusiasm for the success of the Starbucks Rewards program. But in ignoring my data and the preferences it signals, a coffee enthusiast like myself can easily be swayed to try, for instance, the unique experience offered at Philz – or other local third wave coffee providers.
Marketers are forever searching for a silver bullet – and from a distance it might look like the Starbucks Rewards is just that (and I’m sure many loyalty marketing vendors adamantly agree). But to ignore a wealth of customer data in favor of executing a one-size-fits-all national marketing calendar leaves the door open to competitors willing and able to focus on unique customer niches.
Instead of choosing loyalty marketing over a CRM strategy – a better alternative is to have them both compliment each other. Fine to acknowledge that I’m a Starbucks Rewards member, but then feed me the coffee enthusiast experience that is clearly available and integral to the Starbucks brand. Go ahead and give me 20 stars for a Reserve Roastery subscription – but learn from my data and understand that, for the coffee enthusiast segment, the experience may be a higher priority than star accumulation. You don’t have to make a choice between CRM or loyalty. You get to have them both.