Keep Them Coming Back: Rethinking Customer Loyalty | 🧋 |
A case study on Starbuck Odyssey - A Web3 Loyalty Program
GM. 🫶
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Brand loyalty is dead. ☠️
Or is it?
Starbucks recently launched Starbucks Odyssey, an evolution of its existing (and popular) reward programme that integrates NFTs into the reward experience.
This is the first time a global brand has integrated Web3 technology into an existing loyalty programme. If successful, the ramifications and resulting adoption could be significant.
Read on.
What’s in store today:
Keep them coming back: Rethinking Customer Retention
Customer Retention: A Key to Business Success
The Starbucks Rewards Program: Sip, Earn, Redeem
The Coffee Loyalty Revolution: Starbucks Odyssey
3 Reasons why using Web3 technology makes sense
Let’s go! 🥤
Keep them coming back: Rethinking Customer Retention
What is more important, the acquisition of new clients or the retention of existing ones?
It's a classic sales and marketing question.
For startups and small businesses, customer retention is a segment that is often overlooked, as new customer acquisition is what drives business growth and short-term profitability.
Yet, upselling to an existing customer can sometimes prove more lucrative and be a great driver of customer acquisition through referrals and the case study evidence you can provide to potential clients.
Acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%. (Source: Outbound Engine).
Customer Retention: A Key to Business Success
The following statistics make the point that customer retention is key to business success.
Acquiring a new customer can cost five times more than retaining an existing customer.
Increasing customer retention by 5% can increase profits from 25-95%.
The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
One customer experience agency found loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.
U.S. companies lose $136.8 billion per year due to avoidable consumer switching.
American Express found 33% of customers will consider switching companies after just one instance of poor customer service.
Source: Outbound Engine 2022
The Untapped Power of Brand Loyalty
The holy grail of marketing is brand loyalty.
Brand loyalty occurs when customers always choose one brand over others, even though they have other options. But it's not just about making a purchase; brand loyalty is founded on trust, dependability, and a sense of shared values.
Customers who connect with a brand are more likely to stick with it and recommend it to others.
While the concept of customer loyalty is not new, the digital age has changed the rules. Because customers have so many choices, they are more picky about what they want than ever before. If a brand doesn't offer a great experience at every touchpoint, it could lose customers to competitors.
So, how can businesses build and maintain brand loyalty?
The solution is to create a unified, personalised experience that extends beyond the point of sale.
Some brands do this exceptionally well; Starbucks is one of them.
Enter a Starbucks, and you are greeted with a warm, welcoming atmosphere and personalised service the moment you enter their stores. Starbucks understands the importance of building a strong brand identity.
The Starbucks Rewards Program: Sip, Earn, Redeem
Starbucks Rewards is often regarded as one of the best retail loyalty programs in existence and one of the most engaged.
The rewards programme offers a variety of benefits and features, including:
Earning free add-ons, drinks, or food items
Free refills on brewed coffee and tea
Bonus rewards
Free birthday treats each year
According to a CNN report, by October 2022, there were 28.7 million active Starbucks reward members, giving Starbucks a 16% year-over-year growth in its loyalty programme.
As of the most recent annual report for the company, Starbucks reward members have used their cards to buy more than $2 billion worth of coffee ahead of time. In fact, as of 2022, the rewards programme made up 53% of the company’s revenue.
4 Things Starbucks Rewards Does Exceptionally Well
The early marketing genius of the programme was its ability to create a deeper relationship with its customers.
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