Designing a Successful Customer Loyalty Program Like Starbucks, Kohl’s, Chick-fil-A in 2020

Want to improve your customer loyalty program? Then you’ve come to the right spot! Previously, we talked about how to create and design a customer loyalty app (and how to choose between two existing types of loyalty apps). But what if you want to add some bells and whistles to your loyalty-building strategy?

We’ll focus on three profitable companies that have long held the position of loyalty leaders. Starbucks, Chick-fil-A, and Kohl’s have taken some steps to develop successful loyalty programs by improving their customer service. 

In this article, we won’t overwhelm you with details of these powerful companies’ loyalty programs, such as how many points customers must earn in order to receive a particular reward. This information is widely available on the web. A better way than giving you such information is to acquaint you with the five things any company should do to create a customer loyalty program:

  1. Listen to your customers.
  2. Provide personalized services and offers.
  3. Let customers control their digital rewards and purchases.
  4. Make customers feel engaged without feeling that their privacy is being invaded.
  5. Provide added value and exceed customers’ expectations.

Let’s see how you can achieve these business goals. 

1. Listen to your customers 

Listening to customers’ feedback informs your understanding of how to optimize your service. Starbucks launched My Starbucks Idea back in 2008. In that year alone, according to Waterloo, the company received more than 70,000 ideas from customers; by 2015, they had received over 190,000. 

The technology used by Starbucks for collecting and analyzing feedback has developed since 2008. Now, the company uses machine learning, which allows their system to make decisions based on customer feedback. 

This ensures a more personalized experience for users of the Starbucks mobile application: Starbucks gets ideas from customers and responds by making constant improvements to the app. 

My Starbucks Idea

Chick-fil-A has been collecting customer insights by means of two key sources: social media and surveys. Currently, the company has 1.1 million followers on Twitter, 1.5 million followers on Instagram, and over eight million followers on Facebook. A scroll through the Chick-fil-A Facebook page shows that the brand is responding to comments and taking customers’ feedback into account. 

Chick-fil-A also conducts focused online surveys. Their questions concentrate on all factors influencing fast-food loyalty, including speed and quality of service.

Read also: Mobile App as a Brand Marketing Channel

2. Provide personalized offers

After you’ve gathered customer data, you’ll be able to provide a personalized approach to all of your customers. Why do that? According to a RedPoint Global survey, 63 percent of consumers expect personalization. These respondents also say they feel recognized by a brand as an individual when they receive personalized offers.

In the past two years, Starbucks, Chick-fil-A, and Kohl’s have added personalization components to their apps.

Customization and special offers for members

Keep in mind that customers should be motivated to spend money on offers, which means those offers have to be relevant. But each person has their own tastes. How can you satisfy them? The answer is customization. 

Starbucks provides users with options such as a free drink on their birthday and personalized suggestions based on previous orders. If a customer often orders dairy-free drinks, for example, the system recognizes this preference and recommends dairy-free products. In addition, the Starbucks app enables users to save their favorite orders and recommends things to add to an order. 

The Chick-fil-A One app allows users to customize items and occasionally offers users their favorites for free. By tapping on a menu item in the app, you can see a list of special ingredients to add, from standard stuffing to less common extras that a cashier might forget to ask about. You can be creative and make your order look and taste exactly as you want. 

Chick-fil-A has also included a nice tool for those who have allergies or are on a diet. The Allergens filter shows you a menu that only includes ingredients you can eat. After you’ve eaten, you can add menu items to your favorites list. You can then customize future orders by dragging and dropping your favorites from the list. 

Location-tailored experience

Making your loyalty app location-aware will add more personalization to your loyalty tactic. Location functionality allows Starbucks customers to set a location to pick up their order. Moreover, they can find the nearest Starbucks and check the available amenities. 

Chick-fil-A One allows users to explore special offers and menu items recommended by local restaurants. The Kohl’s My Store feature helps customers purchase in the app and pick up items in the store of their choice.

3. Put customers in charge of their rewards, orders, and purchases

Providing customers with access to all their points and past purchases can help them track their spending and plan further orders. The ability to order and pay beforehand will save time when it comes to picking up orders. 

Dashboard with a rewards counter and history menu

Starbucks, Chick-fil-A, and Kohl’s ensure that none of your perks will be lost thanks to their clear and informative rewards dashboards. The Starbucks dashboard, for example, displays your star balance, rewards options, and number of points until your next reward/status upgrade. The Starbucks mobile app replaces all paper receipts, so you always have access to your past transactions (in the History menu) but don’t get slips of paper to toss in the trash. 

The Chick-fil-A rewards dashboard

Easy payments

The three chains we explore in this post have done a good job to ensure easy payments, saving their customers’ time. Here are some of their features for simplifying the payment process.

Starbucks e-wallet. The Starbucks digital wallet holds electronic cards to which customers can transfer money from credit and debit cards. This feature enables people who don’t have their own bank cards (for instance, teenagers) to become members of the loyalty program, collect stars, and receive discounts. Once your Starbucks card is active, you can make purchases by scanning the barcode.

QR code mobile payments. To pay via the Chick-fil-A and Kohl’s apps, first link a credit card to the app. When you’re ready to make a purchase, just tap on your card in the app and a QR code will be generated. Scan the code at the counter and you’re all set. 

Auto Reloads. You could also implement Auto Reloads from a user’s main credit card to make the app even more convenient. This is what Starbucks did. You can ask your users to set a reload balance and set the amount of money that will be automatically added to the card when the balance has fallen to that level.

QR code for paying in the Kohl’s app

However, we want to underscore that if you’re thinking of dealing with sensitive client data (such as credit card information) on your own, you need to go through the PCI Compliance verification. Ultimately, you are responsible for storing and protecting your client’s financial data, which in other cases would be the concern of third parties, such as Dwolla, PayPal, Authorize.Net, Stripe, and others.

Ordering and paying ahead of time

Starbucks was one of the pioneers in integrating preorders with their mobile application. Their Mobile Order & Pay service, which has been available nationwide since 2015, is just perfect for those who are in a hurry. You can customize orders, choose a pick-up location, and pay right in the application.

The Chick-fil-A app also allows customers to place orders ahead of time, notify the restaurant of their arrival by tapping “I’m here” in the app, and pick up orders without waiting.

Thanks to such features, customers don’t have to waste time waiting in line but can enjoy their favorite foods and drinks immediately. Moreover, preorders accelerate the checkout process, allowing restaurants to serve more people in less time.

But how might you integrate in-app payments for these orders? Nowadays there are plenty of options: Apple Pay, Google Pay, Visa Checkout, PayPal, and other payment gateway providers are at your service. At any rate, it’s best to let your users choose among several payment methods. Sometimes directly entering their credit card or debit card is the best option.

Read also: Mobile App Payment Gateway Integration

4. Make customers feel engaged 

Constant customer engagement is a must for success. Businesses spend up to 11 times more on attracting new customers than retaining existing ones according to Brand Keys. To retain customers, so-called behavior notifications come in handy. They provide well-timed recommendations based on information on how people use an app. In short, an app can predict a user’s wishes before they even know they want something. 

The Starbucks Happy Hour campaign uses a customer’s location data and time zone to send a push notification guiding them to a nearby Starbucks shop for a free Happy Hour drink. When customers get the invitation, they’re led to a screen in the app that explains the promo, then guides them to the nearest location.

Kohl’s sends customers one-time-only codes for 40, 30, or 20 percent off a purchase. Pushes remind customers to check their email for these discounts. Discover how to create an effective push notification strategy in our article on three essential types of push notifications.

Starbucks Happy Hour push notification

5. Provide added value and exceed customers’ expectations

Delivering features that have proven effective is a great approach. But modern consumers expect some perks. That’s why the leading loyalty program providers look to innovate and stand out among their competitors. Let’s pay attention to some of the unique features Starbucks, Chick-fil-A, and Kohl’s provide. 

Integration with other services. Starbucks cooperates with Spotify to share songs currently playing in Starbucks shops. The Starbucks app enables music lovers to identify songs played in Starbucks shops, download those songs, and save their favorites to a playlist. Both apps benefit from this cooperation.

Adopting wearable technology. Want to untie your user’s hands? Then let them perform some basic actions using wearables, namely Apple Watch and Wear OS. The Starbucks loyalty app has successfully adopted this technology, and now their users can enjoy watching their Starbucks card balance, searching for the nearest store locations, and paying all from their Apple Watch.

Ability to give or donate rewards. When Chick-fil-A loyalty program members achieve Silver or Red status, they can give rewards to their friends or donate food thanks to Chick-fil-A’s partnership with the nonprofit Feeding Children Everywhere. 

Simplified search. Kohl’s provides a useful tool called Snap & Shop. Users can just tap the search bar at the top of the home screen to start their search. Then they can select a picture of something they’re looking for and Kohl’s will search its inventory for similar products.

Access to product information. Starbucks is implementing a feature for its mobile app that gives users information on where its packaged coffee is delivered from, where it was grown, and what the company is doing to support farmers in those locations. With this feature, Starbucks also tells users where and when their coffee was roasted and provides tasting notes.

Before designing a loyalty program and considering promotion strategies, you should perform careful market analysis. To help you out, we’ve prepared this cheat sheet of sorts that you can refer to while planning a reward system for your loyalty or wallet application. The features described here — offered by Starbucks, Chick-fil-A, and Kohl’s — may be successfully applied to your own e-commerce or retail project to boost your in-app purchases. Or maybe these examples will inspire you to come up with a new, innovative ideas to build an outstanding loyalty program.

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