Experiential Marketing: Starbucks Payment and Loyalty Apps Deliver

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I admit it, I am not a big Starbucks fan. I don’t love their coffee, and I’m too cheap to spend $4.50/day on my caffeine habit. But that doesn’t mean that as a lifelong experiential marketing proponent and former payments company VP, I don’t admire the coffee giant. The payments industry has long been talking about the pending explosive growth of mobile payments, making wild estimates about the billions of dollars of commerce that will be made over smart phones in the coming months and years. But those targets have been largely overstated and most of the more grandiose mobile payments projects have achieved underwhelming acceptance. All except Starbucks, that is.

Today, 14% of Starbucks transactions are completed using their smartphone app, that’s over 5 million per week from the 10 million customers who have downloaded their mobile app. And earlier this year they added more features to simplify the customer experience and make it even more fun. The key to Starbucks success over others that talk about mobile payments but fail to make it happen is that they’ve approached mobile from the customer perspective – intertwining payment and loyalty features and making both remarkably easy to use.

While others in the payment industry concentrated on up and coming technologies not yet embedded in phones or point of sale devices, Starbucks built their application internally based on existing 2D barcode scanning already available. This simple approach required no additional investment at the store level and created no disappointment for customers not yet equipped with the right technology. This past spring, they made the mobile app even better with the addition of digital tipping and “shake-to-pay”, a feature where you simply shake your phone to bring up the barcode needed to scan and accept your mobile payment. They also improved the user dashboard making it more engaging and informative. They added at-a-glance views of your current reward level, awards already available, Starbucks Pick-of-the Week and inspiring messages to share over social media.

In an interview with Forbes Magazine in 2013, Howard Schultz stated, “No single competency is enabling us to elevate the Starbucks brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.”

So what’s next for the coffee maverick turned tech giant? One goal is to enable the mobile app to pre-order so that when customers arrive at a Starbucks location, their beverages are waiting. Another may be to sell the mobile app to other restaurateurs and retailers eager to achieve Starbucks-like loyalty and willing to pay for it.

How to Use this Information

Whether you’re building a mobile app or simply evaluating your current customer experience, the key is to put yourself in your customer’s shoes. Starbucks’ success in mobile payments stems from their experiential marketing approach. They realized that, to drive usage, the app needed to be super simple to use and add value beyond other payment methods, so they relied on existing technology and built in features that enhance existing loyalty apps. Does your business add value above and beyond your competition? Do you deliver a truly unique customer experience that drives word of mouth referral? Webolutions can help. Call us today at 303-300-2640 and we’ll explain our experiential marketing approach and why it works.

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