Starbucks records a 12% revenue hike by implementing data-driven loyalty strategies

Data integration and predictive analytics offer personalization and boost retention

About Starbucks:

Starbucks is a leading beverage brand with more than 24,000 outlets and offers some of the finest coffees in the world. Starbucks India is one of the fastest-growing retail chains in India that combines the global expertise of the brand with an aggressive expansion strategy to drive exponential growth.

Challenge
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With a customer base of half a million, Starbucks India’s loyalty strategy is based on micro-segmentation models, targeting potential customers in a very specific, geographically limited area, and a test-and-learn culture. 

But, with a customer base that huge, they needed a data solution that would help them achieve their aim which was to double revenue from the loyalty base, with minimal increase in offer and discount costs.

They were also looking for a data solution that could gather and analyze data from all the customer touchpoints, and deliver insights to initiate corrective actions such as:

  • Increase retention- Discover opportunities for upsell/cross
  • Reduce churn- Take measures to re-engage at-risk customers 

In simple words, a solution to integrate all data sources on a single platform and real-time dashboards for monitoring loyalty metrics.

Solutions Delivered by Voxco Intelligence:
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Voxco Intelligence, with its data and analytics platform ADAPTify, integrated all sources of Starbucks India’s loyalty data (including transactional & non-transactional data, NPS scores, survey feedback, reviews, etc.) on a single platform and created a single source of truth. 

✓  Using this unified data, Voxco Intelligence then created RFMC (Recency-Frequency-Monetary-Continuity) micro-segments to perform marketing analysis. The RFMC tool created by ADPATify helped Starbucks:

  • Identify their best customers based on the nature of their spending habits.
  • Evaluate customers by scoring them in three categories: how recently they’ve made a purchase, how often they buy, and the size of their purchases.
  • Predict which customers are likely to purchase their products again and how much revenue comes from new (versus repeat) customers.

✓  Developed triggers of inactivity to enable proactive retention.

✓  Developed marketing tactics to bring back lost customers and keep them engaged.

✓  Applied the concepts of neuromarketing to identify the right tactics that would be relevant for each micro segment.

Business Impact
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Even though the corner stone of the solution was data-driven intelligent marketing, applying Neuro marketing concepts like the goal gradient hypothesis, pain at the loss of privilege helped Starbucks accelerate the process of identifying the right tactics that could simulate the desired response from a given micro-segment.

 

In just 30 days, from the day of applying ADAPTify solutions- including customer 360° & predictive analytics, Starbucks India was able to identify at-risk customers, create targeted marketing tactics for each customer segment & store, set triggers for inactivity, and apply automated corrective actions. 

 

With the successful implementation of specific data-driven strategies led by predictive insights for each customer segment, ADAPTify helped Starbucks:

 

  • Generate up to 12% higher incremental revenue for targeted campaigns.

  • Reduce inactivity by close to 5% and bring back lost customers.

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