With increasing competition, eCommerce brands find it hard to retain customers or increase loyalty rates.
Most brands have loyalty or rewards programs on their Shopify stores, a marketing strategy that has high potential to increase engagement, profits, and loyalty.
However, few brands get their loyalty programs right.
One brand that has been running a successful rewards program is Starbucks. Remember the stars you accumulate every time you buy a coffee or a sandwich at Starbucks?
In this blog, we breakdown the Starbucks loyalty strategy, and list down takeaways and tips that you could implement in your rewards programs.
Let’s get started!
What is the Starbucks loyalty program?
Starbucks is an American coffee chain with presence all over the world. The brand has set up a rewards program that is popular amongst its customers. Customers earn reward points everytime they make a purchase online or offline at any of its outlets.
The points collected can be redeemed against future purchases. Apart from points, the rewards program also offers other perks and benefits, such as drinks customization, free gifts on birthdays, free refills, among others.
Starbucks loyalty strategy breakdown and lessons
One of the most popular and talked about, Starbucks loyalty program offers many lessons and tips that eCommerce brands can implement in their rewards programs. In this section, we breakdown the Starbucks loyalty strategy and gather tips and takeaways, which you can apply to Shopify loyalty programs.
1. Starbucks Rewards has two tiers
Starbucks offers two loyalty tiers – Green and Gold. Keeping it minimal and simple, the brand makes the strategy straightforward. Here’s how it works.
Customers have to keep collecting “stars” (reward points) by making purchases, and progress through the levels. Every dollar spent earns customers reward points. When customers reach 450 stars in a year, they progress to the Gold level. The stars are valid for 12 months.
Green level: Once customers join the Starbucks loyalty program, they join from the Green level. In this level, customers earn points on every purchase, get reward points on birthdays, can get free refills on coffee and tea, etc.
Gold level: When customers earn 300 points in the Green level, they progress to the Gold level. In this tier, customers earn more perks and benefits, such as personalized and customized brews. Additionally, they can redeem points towards other perks.
Tips and takeaways:
- Keep the number of tiers or levels to minimum, making it easy for customers to understand the loyalty program. Too many levels could confuse customers and make the experience tedious
- Keep benefits and perks exclusive to each tier so that members can enjoy exclusivity and it encourages them to progress to higher tiers to earn those benefits
- Customize tier names to match your branding, for instance, Starbucks levels are called Green and Gold to match its brand colors
2. Starbucks customer rewards program is free
Both paid and free rewards programs have pros and cons. For instance, when loyalty programs are paid, it may see limited sign-ups. However, only serious customers would sign-up, making it easy to attract only genuine customers.
Conversely, free reward programs attract a large number of customers to join, leading to more popularity. However, this could backfire as brands would spend more on campaigns targeting a larger number of people instead of a concentrated segment.
Benefits of free loyalty programs as a brand loyalty tactic:
- Broader reach and easy sign-ups
- Lower entry barrier leads to more engagement
- Helps create a positive brand perception
- Leads to a broader customer base and potential for word-of-mouth marketing
- Increases repeat purchases, profits and lifetime customer value
Starbucks rewards strategy is to offer the program free. This makes it easy for the brand to attract more customers to the loyalty program. Once signed up, customers climb up tiers when they spend a specific amount in a year.
Tips and takeaways:
- Decide whether you want to keep your loyalty program free or paid based on your product type, industry, and customer preference
- Price your loyalty program in such a way that even if it is a significant amount, customers see value in it in the long run. This will encourage customers to pay and join
- Make the joining and payment process seamless and easy, leading to good customer experience. Remember, first impression is the last impression
3. Easy joining process
Another critical factor in any kind of customer rewards program, subscriptions or membership programs is the joining process. A confusing and lengthy joining process can deter customers from signing up, while an easy, quick sign-up process makes it that much easier to bring customers on board.
Starbucks loyalty strategy considers this factor. The loyalty program is easy to join. All that customers have to do is download the Starbucks app, which is available for iOS and Android users, or sign up via the website.
Starbucks website has a dedicated rewards page, from where customers can join the program by simply clicking on a link. Customers are only required to share their name and contact email to sign up.
Tips and takeaways:
- Ensure the sign-up process is easy and simple
- Provide multiple ways to set up, for example, via website, phone app, etc.
- Make the process short and fast, as a lengthy process can keep customer away
- Assure customers of security and data privacy during the sign-up process
4. It is a well-structured loyalty program
When planning customer rewards programs, brands must take a long-term view. And that’s something that Starbucks loyalty strategy has done. It is well-planned and structured in a way that leads to long-term returns.
In Starbucks rewards program, new members begin with the Green level. When they accumulate 450 stars within 12 months, they automatically progress to the Gold tier, which is the higher level.
This simple and straightforward structure is designed in a way that motivates customers to earn more points until they reach 450 stars so they can enjoy the benefits of the Gold level.
However, the Gold level inclusion is not permanent. To maintain it, customers have to collect 450 stars a year. This encourages them to spend more to earn the required stars. For Starbucks, this ensures continuous revenue and higher customer lifetime value.
When customers continue to spend more and remain members of the Gold level, the brand also increases loyalty rates.
Tips and takeaways:
- Set up an expiration system of points or tiers. This will keep customers spending more to continue being part of the higher tier
- Think long-term when designing and planning your Shopify loyalty program
- Use a Shopify rewards and loyalty app that provides features for long-term success
- Create consistent revenue opportunities via multiple ways to earn rewards
5. Customization possibilities
Customization and personalization features are key to providing good customer experience. This is another effective feature in the Starbucks loyalty strategy. These brand loyalty tactics for Shopify stores can positively impact customers’ perception of brands and increase repeat purchases and revenue for the brand.
Starbucks has incorporated customization features in its customer rewards program. Loyalty members can customize their beverages, food, and merchandise. For instance, customers with 25 stars can customize their beverage; those who collect 100 stars can redeem their points by choosing from brewed hot or iced coffee, hot steeped tea, bakery items like cake pops and cookies, or packaged snacks.
Customers who collect 200 stars can redeem them for any handcrafted beverage from the standard menu, such as lattes, macchiatos, or frappuccino blended beverages. Members can also select hot breakfast items like sandwiches or oatmeal.
300 stars can get customers more substantial food options, allowing members to customize their lunch experience with packaged salads, lunch sandwiches, or protein boxes; while with 400 stars, customers can select merchandise items valued up to $20, including signature cups, drink tumblers, and other branded items.
Tips and takeaways:
- Set up personalization and customization features in your Shopify loyalty program
- Focus on customization as a value proposition
- Provide personalization options based on different tiers
- Create meaningful ways for customers to redeem loyalty points
What food and beverage brands can learn from Starbucks loyalty strategy
If you’re a food and beverage brand that’s looking to improve customer loyalty, you can take inspiration from Starbucks loyalty strategy. Let’s look at some key learnings and inspirational factors:
- Keep your loyalty structure simple, tiered, and with minimal levels. This approach adds clarity. Customers can understand your program easily and know what to do to enjoy the program benefits. Food and beverage brands can set up tier thresholds that encourage repeat purchases, while offering increasingly valuable benefits at higher levels. This creates a clear path of progression, motivating customers to spend more.
- Prioritize transparency in your Shopify loyalty strategy. Food and beverage brands must design a rewards system that is clear, and is transparent about the benefits in each tier. Customers should be able to view their accumulated stars, know how they can earn more points, and how they can redeem points.
- Food and beverage are recurring purchases for customers. By removing the fees to join your program, you can maximize program participation rates and increase repeat purchases. This can lead to higher customer lifetime value. With this approach, you can also capture data from a broader customer base while creating more opportunities for engagement.
- Another important Shopify loyalty tactic that food and beverage brands must consider is to streamline the sign-up process. You could create multiple entry points through mobile apps, websites, or in-store options. Also, ask for minimal information. Frictionless processes can drive more participation.
Also read: Step-by-step on setting up a Shopify loyalty program (2025)
How to launch your Shopify loyalty program for success
The Starbucks loyalty strategy has numerous lessons and tips that you can implement in your Shopify loyalty programs.
Whether you want inspiration for tier-based loyalty structures or the kind of perks and benefits you could create for customers, there’s a lot you can learn from the strategies shared above.
But merely designing a good rewards program is not enough, you have to ensure it is managed well and includes all the features that help attract and engage customers.
To do so, you will require a smart app, such as Appstle Loyalty & Rewards App.
Appstle enables you to set up customized loyalty programs with points, store credits, referrals, rewards, and VIP perks. The app has features that help automate building brand loyalty and customer retention.
With Appstle Loyalty & Rewards App, you can easily gamify and manage your Shopify loyalty programs.
Install Appstle Loyalty & Rewards App on your Shopify store today!
