Program : Starbucks Rewards
Starbucks Rewards pointed as a very succesful
loyalty program by many authorities.Loyalty program is going to be described
with strengths and weaknesses and we are going to take a closer look to how
Starbucks Loyalty program can be improved.
How it Works:
The idea of loyalty program is basic you go to
Starbucks for a coffee and the more you go
more you are rewarded.
Name of the program is Starbuck Rewards, it is free
to join this loyalty program.Customers can use the loyalty card or the
starbucks app to get benefit from program.
Customers are loading cash into card or they are
making payment from the app which make them feel like they are having their
coffee free.With making the payment customers earn stars.
“Earn 2 Stars for every $1 you spend using your
Starbucks® App or registered Card in stores or online, no matter what you buy.
And those Stars will quickly add up to Rewards you can redeem for free food and
drinks.” Starbucks Rewards. (2017, 12 11)
Loyalty program has 2 level , after collecting 5
stars customer reach to the green
level where they can get free refills , free select of syrups and many other
free services are offered.
Second level is Gold
level.Customers have to earn 30 stars to reach that level.After reaching Gold
level customers can get free drink for every 15 stars.Gold card owners
recognize by Starbucks and customized offers and coupons are offered to
Mobile app is working effectively it is
easy to track earned stars,event and offers Starbucks differentiated itself
with using Mobile app for loyalty program.
With mobile app customers are always
engaged with brand,reward system is dynamic and always offers something new to
customers and customers are checking the mobile app more and more.
With tracking birthdays of the customers
Starbucks create emotional connection with customers.They are feeling special
Gold Card increases the motivation of
the customers.They feel exclusive and important.
Information page is not clear enough it
is hard to find detailed information about program.
Many of customers now has gold card
which reduces its speciality.
Older people are less attracted to
program because of the complexity.
There are many complains about errors
inside of the Starbucks app,customer experience is affecting negatively.
first suggestion is adding one or two more status to reward program like
platinium and diamond.Since many customers became the gold member feel of being
exclusive member is disappearing.
of the app Starbucks can place a mini game like collecting badges.To give an
example user of the app can earn 1 badge with ordering 5 different types of
coffee in a week.Another example is earning a ‘coffee addict” Badge with
visiting Starbucks 10 times in a week and paying with mobile app.
addition to Stars with app customers can
collect Starbuck Points and they may use these points to buy Starbucks Mug or
can add leaderboards inside to app for certain places.They can create a contest
and give some prizes to winner.
customer have troubles and complains about service as an apology Starbucks can
add some stars to customers account.
other suggestion is encouraging older Starbucks customers to use mobile app,
Starbucks can prepare guide for it and place it to the coffeehouses.
with extra stars when user of the app shares the download link of the app or
inviting friends to use starbucks card.
2nd Loyality Program: Amazon Prime
Many people critizes Amazon Prime because of the
customers have to pay a fee to join the loyalty program of Amazon.Still Amazon
Prime is among best loyalty programs and from the first day it launched until
now Prime has a huge rate of success.As i mentioned earlier different than many
loyalty programs with Amazon Prime, Amazon charges aproximately 99$ per year
for its service.Now lets take a look at how Amazon Prime works and after we are
going to analyze strengths and weaknessess of the program and in the last part
we are going the see the suggestions part.
Amazon Prime works:
To join the program customers have to pay 99$ per
year and in return Amazon Prime members receive several benefits.Main one is
FREE-two Day Shipping for all purchases.At the beginning of the Prime this was
the only benefit for customers and it wasnt enough and program didn’t create
huge effect on sales.Afterwards Amazon added other benefits to program such as
unlimited streaming of movies and TV shows with Prime and also ability to
borrow books from the Kindle Owners Library.More than that Amazon also offers a
credit card with amazon prime with paying with this credit card customers can
have some amount of their cash back after a purchase.
According to Business Insider members of the loyalty
program spend an average of 86% more per year than non-members and they shop
multiple times per month and increase their spend year after year.
Amazon Prime motivates customers to buy
more in long term prime membership reduces the shipping cost.
Delivery experience is key for
e-commerce business and Amazon satisfies customers with fast delivery.
Prime explainer page does a good job
customers can learn about all benefits in detail.
Side benefits with Amazon Prime seen as
not satifying for 99$ subcription fee.
Strong competitors like Netflix threats
Amazon’s streaming service from customers side it reduces the value of the side
benefit of having Amazon’s streaming service.
Since it is pay to join program
customers may hesitate to join.
With growth of the members of Prime
program it brings more burden to Amazon’s shipping department.2 day delivery is
the key promise of the program but still some customers experienced late
delivery.Complains about late delivery on blogs and social media weakens the
Again many people face with problems
while using Amazon Prime Video, and instead of being a side benefits , amazon
video service may be the main problem of Amazon Prime program.
Keeping a loyal customers sometimes can
be more costly for the company since expectations of the loyal customer are
much higher and satifying them is harder.Many of prime members are
existing,long term customers of Amazon and their expectations are very high and
it can be hard for amazon to satisfy existing customers with managing huge
Special customer service can assigned to
Amazon can design instant delivery
service in urban areas with charging higher fees on Prime membership.
Prime only focusing on existing
customers Amazon could design it to gain attention of new customers.
Adding premium tier to Prime service can
be a option.Amazon can track the shopping amounts of customers and after a
certain amount customers can be upgraded to premium prime membership program.
Amazon can offer trial of the Prime
program for occasional member and shoppers of amazon.com.
Main expectation of Prime members paying
less for shipping and having fast and unproblematic shipping experience.Offered
side benefits have little to do with main expectations of customers.Benefits
are not related to eachother,instead of kindle and prime video,Amazon has to
focus more on promotions,special events and main function of Prime.Prime
members are special customers of Amazon and main aim should be creating a
perfect customer experience for them in their customer journey.