Jon Michaeli’s Blog


Starbucks and CRM don’t mix

This isn’t the first time I’ve gone on a rant about Starbucks (nor will it be the last I’m sure). Each time I feel slightly guilty, because it’s not uncommon for me to blog from Starbucks. Then again, they get more than a fair share of my wallet, so I’ll get over it by the time I’m midway through this post.

The subject of this rant is the Starbucks Card. First, some background. The card itself offers customers the convenience of electronic currency, though I’m pretty sure baristas get screwed on tips now that fewer customers are dipping into their pockets and receiving loose change. Registering a Starbucks Card means creating an online account where contact details, credit card info, etc. are stored. This gives you access to free Wi-Fi, lets you avoid $0.40 surcharges for soy milk, and enables you to auto-reload your card. This last feature could backfire for certain folks who are super-vigilant of their credit cards transactions (as I am). In fact, ever since I saw how often Starbucks was charging my card 20 bucks, I’ve cut back, perhaps not on my total caffeine consumption, but certainly in downgrades from espresso drinks to house blends and dark roasts.

No, I’m not complaining that Starbucks has made me more financially responsible. As a marketer, I am in disbelief that the company has not better seized the opportunity that registered card holders present. It’s a database marketer’s dream to have access to such a wealth of customer data, including purchase history, buying habits, personal preferences, etc. We’re talking about brand evangelists here, engaged and loyal clientele who are presumably the most receptive to special promotions and offers. Why not a rewards program? A referral incentive? Or dare I say something even more tailored and creative – “Because you like X, we think you’ll like Y, so here’s a one-time coupon.” I have my “regular” drink, but I’m always open to something new.

This is just another example how Starbucks has vastly underutilized the power of CRM. As far as I can tell, aside from an occasional offer to complete a survey and receive a free drink (which may be completely random anyway), I’m not aware of any targeting that Starbucks does to uniquely position its product to the various customer segments it reaches.starbucks-logo-thumb1

This isn’t the first time I’ve gone on a rant about Starbucks (nor will it be the last I’m sure). Each time I feel slightly guilty, because it’s not uncommon for me to blog from Starbucks. Then again, they get more than a fair share of my wallet, so I’ll get over it by the time I’m midway through this post.

The subject of this rant is the Starbucks Card. First, some background. The card itself offers customers the convenience of electronic currency, though I’m pretty sure baristas get screwed on tips now that fewer customers are dipping into their pockets and receiving loose change. Registering a Starbucks card means creating an online account where contact details, credit card info, etc. are stored. This gives you access to free Wi-Fi, lets you avoid $0.40 surcharges for soy milk, and enables you to auto-reload your card. This last feature could backfire for certain folks who are super-vigilant of their credit cards transactions (as I am). In fact, ever since I saw how often Starbucks was charging my card 20 bucks, I’ve cut back, perhaps not on my total caffeine consumption, but certainly in downgrades from espresso drinks to house blends and dark roasts.

No, I’m not complaining that Starbucks has made me more financially responsible. As a marketer, I am in disbelief that the company has not better seized the opportunity that registered card holders present. Think of the wealth of customer data it has collected, including purchase history, buying habits, personal preferences, etc. It’s a database marketer’s dream to have access to such information for segmentation and targeting purposes. We’re talking about brand evangelists here, the most engaged and loyal clientele, presumably those most receptive special promotions and offers. Just another example how Starbucks has vastly underutilized the power of CRM.