• Paulo Mateus

Does customer loyalty come with a price tag?


Every single brand in the world seeks for the ultimate holy grail: conquer customer harts, or better, their absolute loyalty.


In the real world, loyalty is becoming harder and harder to get. Consumers have easy access to information, diversity and multiple offers for the same need; they keep their own personal radar in their pockets, and its now common to see customers in a brick and mortars shop searching online for alternative prices to a product they like or, the other way around – cater for information online prior to make their decision and go to a store with the decision already taken.

Companies devise [many] years ago several strategies to cope with this challenge, and loyalty programs were just one of them. As a consumer, you are probably actively or passively engaged in some of them: the miles bonus when you fly, the points awarded when you fuel your car, the extra pizza or burger or meal after the 10th purchase in your restaurant.

Points, awards, fidelity cards with discounts and alike have been around for some time, but if you are honest with yourself, most of them hardly shape your decisions anymore.

So the case of Starbucks described in this article from inc. is quite ingenious and reveals how a brand can leverage their customers passion over their products. In a nutshell, they created a mobile wallet in their app that granted rewards if you pre-charge and paid with the wallet. After that, they allowed customers to link the wallet to their debit or credit card and extended the benefits to physical gift cards.

In such a popular brand like Starbucks, the results were astonishing – around 1.200 M€ of unused balances that are effectively a loan/advance payment from their customers at 0% interest. And a part of this balances is never used, and are the equivalent not to a loan, but to a donation (!!!).

This seems to good to be true, but before you jump and try to copycat Starbucks in your business, check first if your starting point is the same: Starbucks is obsessed to deliver an outstanding customer experience to their customers, and that pays. Also, as their staff is paramount in providing this great service, they are always searching for new ways to attract and retain employees – such as providing them subsidized child and adult care. And most of all, they keep expanding their offer - innovating and trying to capture the new wave and new customers, something that some of their fat-and-happy competitors neglect.

To successfully conquer your customer loyalty, do not focus to hard in cashback or awards – differentiate from your competitors and give them wat really matters to them. Find out what it is and excel on that. The real transformation is to focus on your customer experience – unfortunately, costumercentric is most of the times a buzzword that looks nice in your PowerPoint presentations.

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