One of the most successful customer loyalty programs is the one used by Starbucks. Under this reward system, consumers get stars for consuming Starbucks products. Customers get two stars for every dollar that they pay through the app or registered gift card. The company has double days when customers get double the number starts that they would have gotten on the same expenditure on a typical day (Starbucks).
From the customers’ point of view, it can be said that Starbuck’s reward program enables them to get free product based on how frequent they visit Starbucks. Customers can always accumulate the points and redeem them on days that they do not have money to buy their preferred foods (Nastasoiu and Vandenbosch 211). The marketer, on the other hand, benefits by giving the consumers an extra reason for buying at Starbuck. Therefore, there is a possibility of an increase in sales volume and enhancing the level of customer loyalty. The reward program is also aimed at enhancing the sales volume on certain days through the doubling of the stars earned during double days.
The reward system used by Starbucks also enhances customer loyalty by encouraging customers to come back to increase the number of stars they get and using the app and or registered gift card. Once a customer knows that they can benefit from having many starts, they will be motivated to visit Starbucks at the expense of the existing alternatives (Rather et al. 203). Using the app or registered gift card is also a way to make sure that customers are likely to come back because this alternative offers less flexibility as compared to using cash. Therefore, the reward makes Starbucks highly competitive by enhancing the level of customer loyalty.
Nastasoiu, Alina, and Mark Vandenbosch. “Competing with loyalty: How to design successful customer loyalty reward programs.” Business Horizons, vol. 62, no. 2, 2019, pp. 207-214.
Rather, Raouf Ahmad, et al. “Customer brand identification, affective commitment, customer satisfaction, and brand trust as antecedents of customer behavioral intention of loyalty: An empirical study in the hospitality sector.” Journal of Global Scholars of Marketing Science, vol. 29, no. 2, 2019, pp. 196-217.
Starbucks. “Starbucks® Rewards Program.” Starbucks Coffee Company, www.starbucks.com/rewards/.