Starbucks is associated with a light atmosphere, fancy beverages, and pretty good coffee. Avid fans also love the Starbucks app and its reward program. The program drives loyalty by giving customers deals and free food for purchases they make. However, Starbucks Rewards had one thing that bothered most of its customers: It only accepted preloaded gift cards as payment.
Customers had to load money onto their cards to buy beverages through the app and collect rewards. The issue with that is that customers couldn’t pay for a transaction directly with a credit or debit card.
This fall, Starbucks is modernizing its approach and allowing customers from the US and Canada to pay however they would like. Customers will be able to link their credit and debit cards or PayPal accounts to pay within the app. If they prefer to pay in person, after ordering from the app, they can also use credit or debit cards, pay with cash, or select mobile wallets. Starbucks introduced the new options for payment in response to customer feedback.
Customers will still be able to collect stars for rewards, however, there’s a small catch here. By using a preloaded card, customers earn two stars for every dollar spent. When using other payment options, they’ll receive just one star per dollar spent. Erin Shane, Starbucks spokeswoman, shared that the difference in rewards acknowledges that customers who preload a Starbucks card take an extra step.
Encouraging customers to use the app comes with some engaging actions afterward. Because they analyze the data about purchases made by its customers, Starbucks is able to identify the most popular beverages in different areas and seasons to drive sales during off-peak hours. They stay in touch with customers and continue their personalized communication with them. Recently, they used the app to send notifications to customers to inform them about “happy hours.” The company hopes that its recent actions will widen its customer base.
Starbucks is not the only company focusing on improving its app and rewards program.
A few days ago, Wendy’s launched the Wendy’s Rewards loyalty program on the company’s app. For every dollar spent, customers receive 10 points that can be redeemed for free food and drinks within one year. Points can be earned via orders made through the app or by scanning a QR code at the register or drive-through.
Wendy’s is the first major burger chain to launch a loyalty program focused on food. While McDonald's McCafe Rewards focuses mostly on drinks, Wendy’s reward program is more similar to Starbucks.
Digital business has been a main focus for restaurants and coffee shops, especially recently. Wendy’s shared that digital customers visit more frequently and buy more food compared to in-store customers. 5.5% of its sales are from online and app orders, which is double the percentage of revenue compared to the same quarter last year.
Apps and loyalty programs have always given businesses leverage. Right now, it’s crucial to have these features available for customers. Investing in flawless apps, analyzing data to identify customers’ needs, and doing the best to meet them is the way to go.