The non-digital marketing version of a loyalty scheme usually boils down to being a loyalty card on which you can collect stamps. Once it’s been filled, you can either get a free drink or a discount, after which you need to get a new card and start the process over. Research has shown that avid shoppers prefer point collection schemes.

There are several downsides to choosing to conduct your loyalty scheme offline, such as:

• A customer having to spend time looking for their loyalty card in their bag/purse/pocket
• The card being lost/stolen/destroyed
• There being a limit on how many stamps you can get

With an estimated 2.32 billion people having Smartphones in 2017, and an expected rise of another 0.55 billion by 2020 (Statista, 2017), using digital marketing as a platform for your loyalty scheme can prove to be far more successful.

Starbucks has scrapped their paper loyalty card all together and designed an app for its customers. They are able to set up an account which is accessible both via the app and their Website where they can collect points for every drink they purchase. The points are displayed as stars in a cup, and the user is notified when they have collected enough stars (points) to redeem one of an array of prizes/offers.

This way Starbucks can stay connected with its customers and inform them of special offers without needing to spam them with email marketing techniques. They open a constant flowing channel of communication between them and their customers. It still rewards customers with points for purchasing menu items, and continues to utilise promotional incentives (Loyalty Gator, 2016) .

One major issue Starbucks are advised to consider however, is value for money. The Mirror conducted a quick study where they bought coffees from many different coffee shops on the high street, and found that Starbucks had one of the highest spends before a customer would be able to redeem a free drink. Whilst the total spend at Starbucks was £32.25, competitor Cafe Nero had £21.60 and Greggs had £12.60.

The best part about the Starbucks app is that aside from collecting points on it, you can also pay with it. this saves the user the hassle of digging for change and having to remember their loyalty card on top of it. By having everything in one place, a customer is more likely to make use of the loyalty scheme repeatedly. It also contains a feature where you are able to place your order (and pay for it) ahead of time, and receive it by the time you are in store.

Starbucks application features. Source: https://www.starbucks.co.uk/coffeehouse/mobile-apps/mystarbucks

By digitalising your loyalty scheme, you are also conforming to the public’s environmentally conscious wants and needs. It has been proven that since 2013, consumers have increasingly leaned towards buying products with pro-environmental claims.

Along with the download of the app, a customer is also able to register a plastic “Starbucks card” and link it to the account. By providing this option, people without smartphones are still able to benefit from the loyalty scheme and can log onto their account from home to charge the card with monetary value. This pre-paying feature allows a customer to redeem this additional benefit at any Starbucks, Evolution Fresh and Teavana store. The collaboration of this scheme increases its use.

Costa Coffee has recently implemented a similar application, however one this they have done differently to Starbucks is giving their loyal customers a “name”. When you sign up to the Costa Coffee app, you become a part of the Coffee Club. Giving a name to the “society” a loyal customer can join adds an aspect of exclusivity.

An important factor contributing to the benefits of digitalising your loyalty scheme is that online data provides statistics. It’s easier to conduct studies and audits when the information about who purchases which product most often is already online. The terms and conditions of signing up for a loyalty scheme can (and mostly do) include a clause stating that your personal information may be used for marketing purposes. Providing high quality customer insights is also in the consumer’s best interest.

However, we must also consider that unfortunately, a satisfied customer is not always a loyal customer. In today’s fast moving world, it is safe to say that one of the things people lack most is time itself. It is often the case that a customer will switch brands simply due to convenience, which can be a limiting factor. A satisfying customer experience is an important factor which contributes to customer loyalty, but it isn’t always enough.