Starbucks missed a golden opportunity to enable mobile payments to increase consumer value

I am a Starbucks loyal customer mostly due to their convenient locations, innovative marketing programs and mobile application.  Yes, as a coffee guy I prefer the flavor of Peet’s, but let’s face it, there are simply more Starbucks locations.  I use the mobile application several times a week, have scheduled auto-reload and have downloaded the free app of the day once in a while.  I also like how Starbucks informed me of The Share Event through the app’s messaging feature.  Well done, Starbucks.  What a great way to keep me connected to you and to increase my lifetime value as a customer.

Given all of this Starbucks love, I was SHOCKED by what happened to me this morning when I bought a small drip (dark roast, by the way) coffee.  I paid using my mobile app and the Starbucks guy handed me this…

starbucks2

“If you buy 5 holiday beverages you get one free.  Carry this with you and collect the stickers…it’s a good deal,” he said.

Wait….what?

Starbucks knows what I buy broken down to the transaction level.  Now I’m required to remember to pull out a wrinkly loyalty card from my wallet after I buy a holiday beverage….even after I paid for this beverage with my mobile app?  In a panic, I opened up my mobile app and checked “Messages” for a note that tells me how to sign up for this program through my phone.  Nothing.  Sigh.

However, this is not the only mobile marketing program fail that occurred this morning. My lovely (and I mean lovely) wife received an email from Starbucks regarding the Holiday Star Dash.  The email requested that she click through the link and enter a 9-digit code on her Starbucks.com account page.  She popped open the mobile app hoping to find an easier way defined in “Messages.”  Nothing. Sigh.

Screen Shot 2013-11-21 at 1.18.18 PM

So why does this upset me so? Well, for one it’s clear that the online marketing and mobile marketing teams are not communicating.  I would imagine that the mobile marketing team is a separate group.  The mobile team should be an integral part of the overall marketing organization to avoid these kinds of consumer experience disconnects.  However, the biggest offense to me is that Starbucks has missed a huge opportunity to demonstrate how mobile can drive engagement and loyalty through incentives.

Several articles have been written about the challenges of driving mobile adoption and engagement…specifically in the mobile payments space.  Imagine if Starbucks focused the “buy 5 holiday beverages” program on the mobile audience by guiding people to pay with their mobile phone?  Or enabled Holiday Star Dash activation through the mobile app?  Engagement and redemption metrics would increase…and the lifetime value of these customers would increase.

By enabling online and mobile app participation, Starbucks will be able to compare the ROI across both channels.  It would not be a stretch of the imagination to guess redemption rates will be higher for mobile and that the life time value of the mobile user would increase with the right incentives. The most interesting metric would be the lifetime value of  users who pay for their Starbucks items using their mobile device. Starbucks has the opportunity to show real leadership in how mobile payments can help drive revenue.

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About ericdunstan

Real Estate, FinTech, E-commerce; Realtor, Innovator, Advisor, Writer, Mentor; Business Development, Marketing, Social Media; Coffee lover, 5th gen CA native. #mdllg View all posts by ericdunstan

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