Caffeine Loyalty!

Coffee, coffee, everywhere!  A commodity product due to its vast availability, and it appears that North America loves their coffee since you can find it wherever you are.  I am even a slight addict myself.  Now certain companies have discovered this segment that were not traditionally in the coffee market.  The McCafe product line was an extension by McDonalds, which offers more than coffee too, it offers specialty drinks such as mochas and lattes.  With this increase in competition, companies whose revenues are almost solely based on coffee should have lost market share; however, Starbucks has been successful in turning the coffee “commodity” into an experience.

During economic downturn people typically tend to turn away from luxury goods and extravagances.  Do people really need a triple shot Venti Americano?  Not really, but “Starbucks customer loyalty has assisted the company more than any ad campaign could have”.  Sheila Shayon outlines this success by noting the “comfortable atmosphere” that has been established, as well as Starbucks successfully positioning itself as a place to go and chat with friends or study for classes.

 Starbucks Reward Program

This clearly indicates customer and brand loyalty is the best way to retain customers and handle increases in competition.  As other companies have began to offer Starbucks main products for less, the company has focused more on the experience and customer loyalty programs in order to retain the majority of its consumers.  It has transformed coffee in to a lifestyle.  You cannot purchase true customer loyalty, it is developed through how you treat customers and develop your brand over time.  Starbucks has invested heavily, through time and money, in creating a comfortable environment where people want to invest their time and money and take part in loyalty programs.  Consequently, when people think of “coffee shops” Starbucks it one of the first companies that come to mind.

Recent Starbucks Loyalty Initiatives

Sources:

McCafe – http://www.mcdonalds.ca/ca/en/menu/full_menu/mccafe.html

Sheila Shayon Blog – http://www.brandchannel.com/home/post/Starbucks-Customer-Loyalty-030813.aspx