Starbucks individualizes loyalty offers

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Starbucks individualizes loyalty offers

By Dan Berthiaume - 05/15/2020

A global coffee giant ensures that it keeps the personal touch.

Operating more than 31,000 stores worldwide, Starbucks Corp. sought to deliver highly individualized offers to the almost 19 million members of its My Starbucks Rewards loyalty program. Starbucks intended to grow loyalty revenue by moving beyond traditional personalization.

However, the company’s existing CRM tools were not able to support personal offers or the speed of the end-to-end marketing process its loyalty marketing team desired. To enable the delivery of millions of individualized offers to its loyalty members, Starbucks deployed the artificial intelligence (AI)-based personalized offer platform from Formation.

Leveraging Formation, Starbucks was able to use disparate data sources, including transaction, product, loyalty, and store information, to construct, deliver and manage personal offers. The retailer used the platform’s machine learning capabilities to individualize and optimize offer selection for each rewards member. 

Starbucks gained the ability to individualize each offer in numerous ways, including the number and type of actions; specific categories, sub-categories or products; amount and type of rewards. The Formation system enabled Starbucks to deploy individualized offers across channels by automating offer assembly and management, reward fulfillment, and KPI measurement and tracking, at enterprise scale. 

Starbucks now creates millions of offers each week across multiple offer types. The retailer builds each type of offer to improve certain customer behaviors including frequency, category exploration, cross-sell and upsell. Personal offers are delivered across channels including email, mobile app, and push notifications. Rewards members can see their progress in real-time, with their unique offers and status reflected in the mobile app. 

Furthermore, the Formation solution has automated many facets of Starbucks’ offer process, including development, deployment and measurement leading to faster operations and improved marketing operations efficiency. Specific metrics Starbucks has achieved since implementing the platform include a 10x increase in execution speed for marketing operations, as well as 3x improvements in personalized marketing sales lift and marketing spend efficiency.