Be imaginative when rewarding loyalty to turn customers into advocates

Brands need to think beyond points in order to win customer loyalty, according to Telefonica’s former head of strategy, planning, innovation and experience Jonathan Earle.

In the opening scene of Trainspotting, Ewan McGregor’s character Mark Renton begins with a powerful monologue: ‘’Choose Life. Choose a job. Choose a career. Choose a family…” and so it goes on, until he closes with the line: “I chose not to choose life. I chose something else. And the reasons? There are no reasons. Who needs reasons when you’ve got heroin?’’

While I am not a drug user, I am a junkie of sorts. I collect My Starbucks Rewards. There I said it. I love the scheme and that’s strange from someone who doesn’t drink coffee but peppermint tea in the morning. Why? I believe there are three reasons I am so enamoured and hooked.

Firstly, it’s simple. It’s simple to set-up, simple to use, simple, simple, simple. In a world where our time is more and more precious, something that has very low customer effort is a real winner in my eyes.

Secondly, I get little treats every now and again. I receive an email at the start of a season saying I can try a new drink before non-rewards customers. In addition, after buying 15 drinks, I get one free. Over Christmas I was also offered a free bakery item that meant I could treat my daughter to a milk chocolate Christmas cookie (delicious). The offers aren’t big and don’t cost much but they are very welcome and make me smile.

Of course, I realise that there is a value exchange here. Let’s face it, Starbucks isn’t doing this out of the goodness of its heart. Customers who use the rewards scheme place money directly onto the app meaning Starbucks doesn’t pay any interchange fees with the banks. In fact, Starbucks reportedly told analysts that almost a third of its revenues come from rewards customers topping up their app or card in the US. Indeed, Starbucks could theoretically become a bank in its own right if it wanted to as it has the liquidity – whether it has the complete trust of its customers is another matter.

Thirdly, the scheme encourages customer interaction with the coffee chain. The app is central to Starbucks’ relationship with me. It continually upgrades the customer experience understanding that time and speed are of the essence – both from a customer perspective but also for its own operating model. I was recently told that I could order my drink ahead of visiting a shop and it will be ready and waiting for me to pick up at the counter – no queuing and certainly no fuss.

For me, that’s a genius proposition and meets the customer, and business, insights bang on. Do I tell people about this – you bet.

If I compare Starbucks’ scheme with the only other rewards initiative I use religiously – British Airway’s Executive Club through which I collect Avios points – I just think, why do I bother? I’m finding it harder and harder to earn points in any meaningful way and even more difficult to redeem them when booking a trip for the whole family.

Despite my misgivings, I still choose BA when given the choice. I need to go cold turkey and get BA out of my system. I believe there are better choices, better experiences, better rewards, and I will do it. I really will. In the words of Mark Renton, “all I need is one final hit to soothe the pain” and then I am clean.