Value: Starbucks and Loyalty Program Essay

Submitted By NunoPires1
Words: 348
Pages: 2

Estimating Lifetime Value:

See attached .png file.

Starbucks Loyalty Program: When someone purchases a gift card at a Starbucks this opens up the door to bringing in a new customer or maximizing a loyal customer’s value. If this new customer comes into a Starbucks with a $25 gift card at the very worst they will only spend that amount but there is plenty of upside. They could easily become a lifetime customer.

Starbucks decided to combine their existing loyalty program with their gift cards. This made every gift card eligible for their loyalty program. They additionally let their customers to auto reload their cards when they reach a threshold so they are never without money on their cards enabling more spending. For customers who are members of their loyalty program but don’t participate in the auto reload option they often offer promotions enticing them to do so.
The basis of rewards program is the same as any other companies. Reward your most loyal customers because your top 20% will account for 80% of your total business.
Once you use your gift card once you are now enrolled into the loyalty program which entitled you to a free drink on your birthday.
Every visit is considered a “star”
Once you use your card 5 times you are now part of the “Green” tier.
Green Tier entitles the member to the following: * Free Syrup or Soy Milk * Free refills while you are in…