Monday, March 17, 2014

Loyalty Program - What Works, What Doesn't?

I didn't realize how established Starbucks loyalty program in Canada is until I come to HK.  The loyalty programs of the coffee chains like Pacific Coffee and Starbucks HK are still at its infant stage compare to Canada.  Surprisingly, Starbucks didn't roll out the loyalty program model globally.  The programs in HK by these 2 chains doesn't reward frequent customers.  There isn't any incentive to join the Program or engagement programs.  There are so much more these 2 chains can do to drive engagement and repeat purchase utilizing these programs.  The Starbucks store locator app runs separately and has no interaction with the Loyalty Program, which is a missed opportunity.  The loyalty program of the Pacific Coffee is even sadder.  The incentive is to load up on a Pacific Coffee card that can only get discount on 3-4 specific days in a month.  No points, no other membership incentive.  Who would join?  

Coffee buyers from chains usually are repeat customers.  If leverage already loyal customers to be brand ambassadors to do your word of mouth marketing, it will be much more effective than just above the line marketing.

What's so great about the Loyalty Program of Starbucks Canada is that you can earn the level of membership when you reach the threshold of drinks you buy from Starbucks.  Not only does it drives sales but it makes the customers feel special and that they belong to a special group with VIP treatment.  To throw in more immediate incentive to be a member, Starbucks threw in a free drink for every 10 you buy.  Most people getting coffee in the queue I saw in Starbucks is a member.  Here, Starbucks got their customer data as well!  Starbucks also frequently sent relevant emails with deals and new products that I look forward to as member.  I even forward them to my friends and family.  Talk about successful word of mouth.

To my surprise as again, Starbuck China seems to have a more mature loyalty program than HK.  At least from the packaging, display and initial incentive for new comers, it looks like they got the program start off right.  Digital engagement is a big part for any Loyalty Program for most developed APAC markets due to smartphone adoption.  Would be cool to see how Starbucks engage members digitally.  I haven't seen much on Starbucks China Weibo mentioning about loyalty program.  It would be good opportunity to do cross platform marketing to engagement its community and drive them to be members so they can get more customers data to do regional and localize retention marketing campaigns.  China consumers are in for Starbucks not so much for the coffee (well…China is a tea drinking nation after all) but for its hang-out cafe environment and the status/recognition associate with the lifestyle Starbucks goer has. Therefore, nurturing the community in China for Starbucks with a successful and relevant loyalty program is essential for Starbucks.

No comments:

Post a Comment