Steve Kaplan's Blog

December 6, 2011

Starbucks Continues to Addict Customers

Filed under: News — stevekaplan @ 2:35 pm

I really like Starbucks.  Not just because of their lattes, but because of their business model, branding, customer-understanding, and ability to remain innovated and ahead of the game.

As if Starbucks didn’t addict consumers enough with their beverages and in-store experience, their not-even-a-year-old app that allows mobile payments have been downloaded by millions of consumers, leads me to believe that this institution clearly knows its consumer. And how to addict its customer.

According to Mashable, in less than a year, this app has “hosted 26 million such transactions on iOS, BlackBerry and Android, according to the chain. One in four Starbucks card transactions is now executed via a Starbucks card and a portion of those are done through mobile.”

One in four transactions are done by a Starbucks card. That stat alone is staggering. Think about it. How many cards do you get offered and kindly reject? Is it the loyalty perks that drives people to buy cards? No, I don’t think so. Their loyalty program doesn’t offer such robust rewards. Yet- still- one in four transactions are done by a card.

This company knows its consumer, what it wants, and how to sell to it.

After nine weeks of its release, the app received 3 million transactions. Now, in the past nine weeks, there have been 6 million. According to the SVP and General Manager of Starbucks, Adam Brotman, New York, Seattle, San Francisco, Chicago and San Jose, California, are the top cities by volume for mobile purchases.  Also, 91% of those who downloaded the app actually use it.

Apparently,  $110 million has been reloaded to customers’ Starbucks cards via mobile. $2.4 billion was loaded onto Starbucks cards overall in 2011.

“It’s a faster, easier way to pay,” Bortman said about mobile payments. “We not only developed the feature, but we also rolled out scanners in our locations.”

Starbucks knows their customers, how to convenience their customers, and how to conveniently profit from it all. Big time.

How are you making it easier for your customers to pay you?


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