Why Should Starbucks Give You A Loyalty Discount? You’re Already Addicted

Six million people have rewards accounts at Starbucks, but it might not be accurate to call them loyalty cards. Yes, Starbucks uses cards and apps to store gift card balances and keep track of what customers buy, but don’t look for them to start handing out more discounts as they collect more data on you. If someone is already coming in five days a week, the goal isn’t to charge them less: it’s to make sure they don’t stop coming.

AdAge had someone on the ground at the Big Data Retail Forum last week, and shared wisdom from a session with Joe LaCugna, Starbucks’ director of analytics and business intelligence. If you use the rewards program, Starbucks has a lot of information about you. They’re using it to learn about current sales trends, and to get customers back in the store with tailored offers. Haven’t stopped by in a while? You might get a special coupon on your mobile device meant to tempt you back into the store. What you won’t get is a discount, beyond a free drink after every twelve that you buy. LaCugna points out that you don’t need loyalty programs to bring regulars back into Starbucks. They keep coming back anyway. “Why would we give them a discount?” he asked. The caffeine-buzzed Gold rewards card holder who sent us this article was slightly annoyed at that quote.

You may remember some recent changes to the Rewards program: loyal customers now earn free drinks sooner, but alternative milks and syrups are no longer free upgrades. Soon, customers will be able to add purchases of Starbucks products like bagged coffee and Keurig cartridges bought at third-party retailers. It’s about building loyalty to the brand, if not necessarily the stores.

At Starbucks, Data Pours In. But What to Do With It? [AdAge]