The power of customer loyalty – Starbucks App Story

When most people hear the words Frappuccino or Pumpkin Spice, they begin to envision a certain green siren championed by a specific coffee chain. But aside from its ‘Instagramable’ drinks and infamous reputation for misspelling names, Starbucks has also hit headlines for a different reason.

The story ‘how Starbucks is also a bank’ caught a lot of attention and is all about the franchise’s rewards scheme. The Starbucks loyalty app is now a popular method of payment that requires customers to preload money, almost like a gift card, that they can use to pay for their Starbucks to receive rewards such as free drinks or extra espresso shots.

Now anything that mentions Starbucks is always going to turn heads but what was special about this article was the unnerving statistic that through the scheme customers ‘unknowingly provide Starbucks with the equivalent of a $1.5 billion loan at 0% interest’, giving it greater financial clout than many regulated banks.

Customers ‘unknowingly provide Starbucks with the equivalent of a $1.5 billion loan at 0% interest’

If this willingness to keep putting money into the reward scheme isn’t the epitome of customer loyalty and trust, then what is?!

What is it about this app that is so effective in building such an engaged and loyal relationship with Starbucks’ customers?

Personalised experience

Regardless of the size of a business, expectations from customers for positive interactions with a brand tend to start in a similar place, and that’s with feeling a personal connection. An app that speaks to this desire can significantly dictate a user’s onward relationship with a brand.

While, yes, Starbucks has built a reputation for deliberately misspelling names on the cups for collection, the personal element of calling a customer by their name (albeit an incorrect name to capture their attention) still creates something of a bond and an authentic exchange between customer and barista. It’s unsurprising that this personal touch has been carried over to the coffee chain’s digital platform where users are met with a personalised welcome message when they open the app – this time with the correct name. It’s a small gesture that makes an impact.

But it doesn’t stop there. Continuing the misspelled names joke, there’s a deliberate function on the app that creates the label for the online order that will in fact have the correct spelling of the customer’s name when they go to collect their drink, marking a cross-over between the online and offline relationship.

Now this detail may appear insignificant but for the people who can never find their names on personalised items in gift shops or have seen every variation of it aside from the correct spelling this is a big plus.

These are just the beginnings of tactics employed by Starbucks to create an onward relationship with their customers. What is apparent from the levels of loyalty that the brand enjoys is that the accumulation of such actions doesn’t go unnoticed by the consumer, all contributing to a stronger relationship and enhanced loyalty.

Another good example came in 2020 when Marks & Spencer rebranded its rewards programme ‘Sparks’ with a new Sparks app that went on to hit a million downloads in just eight weeks.

The rebrand included a more tailored approach to the rewards scheme where, through the app, users would be offered discounts that were based on their most frequent purchases and spending behaviours. The app leverages the individual’s shopper data to work out the best rewards for each user so that every time they open their app they’re met with a variety of offers chosen just for them. This has done wonders in building greater customer loyalty among M&S fans that receive regular treats and rewards whenever they interact with the brand through their app.

After the trials and tribulations of the last year, the high street has faced a tough time of late, which is why brands are investing more time into making lasting impressions where they can. By choosing an incentive that many supermarkets already offer but then adding a more customised experience, M&S has been able to attract new customers whilst keeping its existing customer base happy.

Removing obstacles

The best apps make it easy for the consumer to engage in the behaviour that a brand is trying to encourage. Whether that’s making it easier to buy a coffee like the Starbucks rewards app or eating more fibre like the Ryvita FibreFit app, ultimately the goal is to make it as easy as possible for the user to take full advantage of the app’s features in a way that will keep them coming back for more.

App developers face the challenge of simplifying the interaction process to create a frictionless experience between consumers and a brand, and often the best way to achieve this is to remove any obstacles that might cause potential users to think twice about using a new app.

A great example of this in action is with Duolingo, the app that takes the fuss out of learning a new language and instead puts a greater focus on fun and convenience. Duolingo doesn’t set any time limits on when certain tasks need to be completed, or classes that need to be attended, making it extremely flexible for the learner to feel like they can access it at any convenient time. It’s also laid out like a game to make the experience of learning a new language much more fun and interactive. This is a trend that is becoming increasingly popular, especially in the education sector with Education Technology recently reporting that gamified learning creates a relaxed environment in which students feel safe to explore and make mistakes.

The thought that’s gone into making the Duolingo app more accessible could explain why it has over 500 million registered users. It’s a great example of an app that has removed obstacles in a setting – learning a new language – that will have traditionally been perceived as one that can be too challenging and time consuming for most people to undertake.

The creators of Duolingo have demonstrated a real understanding of user needs and brought about a revolution in the way that people can approach learning by adding a gamification element that accommodates and motivates the modern consumer.

Creating a community

Interactions with a brand can also be from shared experiences with other users, so companies should consider the powerful advantages of creating a sense of community among their customers.

Today, most businesses at the very least use one social media platform and therefore already have a group of individuals that interact with one another over a love for the brand. However, whilst this is frequently used by companies in a marketing capacity, it can often be forgotten when it comes to creating an app.

Fast fashion brand ASOS has experienced great success using this technique, especially with the new integrated review element that’s recently been added to the app. This is a place where customers can post images and thoughts on their most recent purchases, whether positive or negative, to provide more information to others in the community.

Reviews are an effective way to create conversation and add an element of human interaction in an otherwise isolated user journey. All of this contributes to a much more dynamic shopping experience and helps create community. By encouraging honest, transparent conversation around the brand and the products in this way, ASOS has been able to maintain a consistently growing fanbase that puts their trust in the brand.

By taking the time to understand what it takes to garner greater loyalty from customers, we can see how these organisations are creating not just customers, but true fans that will readily come back for more.