Wednesday, February 11, 2009

Starbucks Rewarding Loyalty

Starbucks has launched a new loyalty program as they looks for better customer engagement.

Starbucks has tapped Draftfcb to assist with direct marketing, loyalty and CRM efforts as the company even as the company enters a cost-saving and retention mode.

The program will focus on the card-based CRM program, Starbucks Card Rewards, that the coffee chain launched last spring, and its upgrade, Starbucks Gold Rewards, which launched in October.

According to a company release, “Positive progress has been recorded from customer response to the new Starbucks gold card,” and the rewards program now has more than 500,000 members, averaging 15 visits a month and spending 10% more per visit than non-members.

Starbucks needs these valuable customers now more than ever, with same-store sales down 9% in the first quarter over the same period last year. The declining economy and an upswing in lower-cost competition from McDonald's and other fast-food chains has keeping the pot empty in reguards to the company's revenues, which in the US fell 6% to $2 billion in the first quarter.

“In the midst of the weakening global consumer environment, Starbucks is following a well-developed plan to strengthen our business through more efficient operations and by preserving the fundamental strengths and values of our brand,” said Howard Schultz, chairman, president and CEO of Starbucks, in a statement. “We remain focused on driving the discipline and rigor necessary to create long-term shareholder value, and we are taking aggressive steps to excite customers by providing relevant value and innovation, even during this challenging time.”

As a cost-cutting measure, the coffee company is eliminating 6,000 retail jobs and 700 corporate jobs. The higher-ups are feeling the pinch, too: Executives did not receive bonuses in 2008, and base salaries were frozen for 2009.

On top of boosting loyalty efforts, the company also is said to be exploring “value menu” options to lure customers.

Larson note: 10% more spending per stop is worth rewarding isn’t it? Do you have a club? You could you know. Clubs are easy to form and if done right customers love them as much as they like the usual special discounts that go with them. As writing in a previous blog if you have a prememer showing of new merchandic or stock for members only it can go along way.

If you need or want special membership cards you can have “credit card” style cards produced for yourself. (yes we make cards like that here at Larson’s) of you can have paper cards made up or even printed off your computer printer and laminated.

Have a member’s only showing, anything it takes to help make people feel special and they will come back for more.

Howard Larson
Larson & Associates
Target Marketing & Telesales Professionals for new account acquisition
Making good businesses great and great businesses even better

P.S. We make telesales for small business affordable by offering programs down to only 15 hours a week. Maybe you could add telesales into your marketing mix call today and find out.

P.P.S. Twice a week we offer 2 free ½ hour consultations for marketing your business.
Call or email to get your spot today.

*Source: Lauren BellFebruary, Ad age,

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