Bond
In a follow-up to our November blog applauding Starbucks' Black Friday deal and how it used loyalty mechanics to encourage acquisition and habitual behaviors, Scott Robinson and Sayyada Rai put the offer to the test and examined the real-world implications from two points of view.
Scott Robinson - Habitual Starbucks Customer
I’m a Starbucks Gold Member who routinely places a mobile order for a Venti brewed coffee and breakfast sandwich. Each weekday morning, I drop my son off at school, then pre-order Starbucks on my device, before my commute to the office.
Earlier I expressed my genuine compliments about Starbucks’ Black Friday Offer as a great example of loyalty mechanics cleverly applied outside of a formal loyalty program: buy a tumbler and get unlimited refills every day in January.
But today, my my opinion, after using the refillable tumbler (and I’m speaking as a tenured Starbucks Rewards Gold Member with habitual behaviors), is that it could be problematic among top segments, and has the potential to disrupt profitable habitual behaviors.
Personally speaking, there are a few things that disrupted my own daily coffee routine and caused me to abandon my tumbler in favor of my old routine:
- Two Orders
With the refillable tumbler, though I could still pre-order my breakfast sandwich via mobile, I now had to also physically line up in the in-store queue to fill my tumbler. This is inconvenient and extended the duration of my visit (and given that I park my car curbside in a no-parking zone to run into my Starbucks each morning, I count on the mobile order experience to get me in and out quickly, so as to minimize the chance of getting a parking ticket!) From Starbucks’ perspective, I can see that there is no easy way to operationalize tumbler refills for mobile-order-and-pay customers, but I'm sure it was a frustrating nuance for many.
(Ok, so I acknowledge these next two complaints are perhaps a little trivial—but the little things add up!!)
- Too Small
My first cup of coffee each day is a Venti size, and therefore the Grande-sized tumbler left me craving more. From Starbucks’ perspective, this is easily solved by adding a Venti-sized tumbler option to the merchandise assortment. Next year, Starbucks? - Too Hot
Perhaps not a complaint for some customers, and definitely not among the environmentally conscious cohorts, but a tumbler that keeps a drink too hot for too long is problematic—especially for a Member who wants to consume an entire cup of coffee during a short 30-minute commute. The usual paper cup, despite the important environmental implications, allows a piping hot drink to cool sufficiently so that it may be enjoyed immediately. Perhaps a paid all-you-can-drink-in-January-coffee promotion that is operationalized without a metal tumbler could be introduced.
I also put my loyalty marketer’s hat on and saw some additional gaps in the experience:
- Broad Targeting is Problematic.
It’s clear that the tumbler is best suited for acquiring new customers and for fostering habit among infrequent existing customers, and not for habitual mobile order Members. But the tumbler doesn’t easily enable progression from anonymous new customer to known, registered program Member—something that can be achieved by registering a Starbucks gift card. As such, I’d like to see Starbucks enable a “Register Tumbler” mechanic to forward the progression of the tumbler from refillable anonymous coffee vessel to a behavior-tracking, personalizable Member experience. - Transactions Tallied, but not Associated
There is no purchase activity tracking for tumbler refills among existing Members. Meaning, though Starbucks can count the number of times each tumbler code is used in January, the behavior is not associated with a Member’s account, even if it is refilled by a Member. I’d also like to see Starbucks enable an “Add Tumbler” mechanic to their mobile app, similar to adding a Starbucks gift card. This would enable the refill transaction by a registered Member to be associated with a Member’s account. Without this mechanic, my orphaned refill transaction would lead Starbucks to interpret that my loyalty had devolved from a daily coffee and sandwich Member to a sandwich-only customer, even though in actuality it had not. - Experience is Less Than Seamless
Lastly, and from a Member-experience perspective, an “Add Tumbler” mechanic would enable Members to simply flash their digital Member barcode to receive the complimentary fill-up; and from Starbucks’ perspective, this would operationally preclude the store associate from needing to manually entire the four-digit promotion code that is etched on the side of the January tumbler. This would obviously not solve the earlier inconvenience of having to stand in line, but it would certainly improve the experience for all involved.
Loyalty mechanics hold tremendous potential to create new habits and foster loyalty; but they also have the potential to be habit breakers, not habit makers, when not carefully contemplated and when their focus spills over (pun intended) to non-target customer segments.
Sayyada Rai - Casual Starbucks Customer
Unlike Scott, I have never been a habitual Starbucks customer. To me, Starbucks was a once-in-a-while kind of purchase, their fancy, elaborate drinks reserved for “treat yourself” days. That all changed when received the Starbucks refillable tumbler as a Christmas gift.
I’m a tea drinker, so it didn’t occur to me to buy my morning brew at Starbucks since it’s just so easy to make my own. However, since I was going to get to have a free drink from Starbucks for 31 days, it seemed like a great opportunity to try out their varied tea selection.
Throughout January I noticed a few interesting things about my behavior:
- A change in routine
Throughout January, my drinks were going to be FREE! So, you can bet I used this as an excuse to go at least once a day and make the most of this promotion. I quickly found a way to work Starbucks into my daily routine, leaving home 10 minutes earlier so I could stop off at a location on my way to work.
- Trial of new products
I strayed from my usual order and tried different teas that I typically wouldn’t have due to the fear of potentially disliking them and wasting money. As a result, I am now a Starbucks tea connoisseur! I’ve tried almost all the teas on offer and even found some new favorites.
- Cross-Purchasing
A bit of an obvious one, but going into Starbucks for my free drink definitely enticed me to pick up a snack or breakfast item as well, for which I’d pay full price. Knowing that part of my order would be free made it easier to justify this additional purchase.
My January journey also got me thinking about future opportunities for Starbucks:
- Identifying Tumbler Customers.
As Scott outlined in his critique, there is no way for Starbucks to identify transactions using the tumbler purchase and, as such, is unable to measure any change in behavior to know if they’ve been able to convert customers.
For me, as a new habitual customer, there is also a missed opportunity to record my new favorite drink options and target me with enticing offers in the post-promotion period. - Gamification and Environmental Impact Calculation.
Being able to get a free drink every day felt like a bit of a challenge for me. If I missed a day because I forgot to grab my tumbler on my way out for work, it felt like I "lost" that day. If Starbucks were able to gamify this experience and recognize customers for hitting a streak of using their tumbler, it would further connect these customers to the brand and involve them in different Starbucks channels, e.g., the app. Adding a further dimension to the gamification aspect, Starbucks could showcase the impact the customer has had on the environment by using their tumbler instead of a paper cup. This could provide a connection with the customer that would resonate on a deeper level than just free coffee, and who knows, this education might encourage them to keep using a reusable mug. - Surprise and Delight.
Looking back on my experience and how my purchasing habits at Starbucks have changed, I believe there’s an added opportunity for Starbucks.
I would assume that most people who buy the tumbler are already frequent customers who find a “free” daily free drink to be a cost-saving for them. As a casual Starbucks visitor, I wouldn’t have bought into this promotion on my own accord, but fortunately, I received the tumbler as a gift! If Starbucks could surprise some customers with the tumbler for free, they could be successful in pushing some to convert to habitual Starbucks fans, quickly recouping the cost of the initial “gift.”
Overall, I found the changes in my purchase behavior to be positive for both myself as a customer and for Starbucks as an organization. It was a way for them to turn an infrequent visitor to a daily customer for the cost of a couple of teabags a week. Win-Win!
