Your $29M Reason to Master Customer Loyalty (through market research insights!)
As you sip your Starbucks this morning, brew on this…
The loyalty program at Starbucks boasts nearly 29 million active members, and over half of Starbucks sales are driven through the program!
Starbucks’ loyalty program has been a key driver of the company’s success. In fact, it’s one of the most lucrative loyalty programs of all time, and it didn’t happen by accident. This loyalty program was a meticulously designed business initiative, fully-based on customer insights gleaned from market research.
How did Starbucks decide to go full-throttle into this initiative?
To get you that answer, let's travel back to 2008—when Starbucks realized their customer traffic was declining, despite massive expansion of stores. They launched (drumroll please) an enormous market research effort to figure out this discrepancy… and identify ways to increase customer loyalty.
Market research data found that customers were becoming increasingly price-sensitive and that the company's focus on rapid expansion had led to a decline in the quality of the in-store experience.
Based on these insights from market research, Starbucks acted fast—
Improving the in-store experience by boosting ambiance, adding comfortable seating, and implementing new music playlists.
Expanding the product line with more affordable options, such as value-priced breakfast sandwiches and $1 tall brewed coffee
and, of course…
Introducting loyalty programs (capitalized becuase this was the big one!): Starbucks introduced a new loyalty program that rewarded customers for their purchases and offered exclusive benefits, such as free refills and birthday rewards.
These changes helped Starbucks completely reverse the decline by increasing customer loyalty.
Starbucks' success underscores the importance of doing your market research and using customer insights of customer needs and preferences to develop strategies that build stronger relationships with customers. By leveraging customer insights to improve the customer experience, brands can increase loyalty and drive business growth.
Over the past decade, Starbucks has called their loyalty program “The single biggest driver driver” of the company's success, as it has generated undeniable ROI and helped the coffee brand build stronger relationships with its customers
What could increase brand loyalty do for you?
Ways to increase brand loyalty with research-based customer insights
There are several ways to strengthen customer loyalty through market research:
Understand customer needs and preferences: Conducting market research can help you gain a deeper understanding of your customers' needs and preferences. By understanding what your customers want and expect from your brand, you can develop products and services that better meet their needs and build stronger relationships with them.
Gather feedback on customer experiences: Market research can also help you gather feedback on your customers' experiences with your brand. By soliciting feedback from your customers, you can identify areas where you can improve and make changes that show your customers you value their opinions and are committed to providing them with the best possible experience.
Identify opportunities for personalization: Market research can also help you identify opportunities for personalization. By understanding your customers' preferences and behaviors, you can personalize your marketing messages and offers to better resonate with them.
Use data to inform decisions: Market research can provide you with valuable data that can inform your decision-making processes. By using data to make informed decisions, you can develop more effective strategies that better meet your customers' needs and build stronger relationships with them.
Communicate with your customers: Market research can help you better understand how your customers prefer to communicate with your brand. By communicating with your customers in their preferred channels and styles, you can build stronger relationships and show them that you value their time and attention.
Market research can provide valuable insights that can help you better understand your customers, improve their experiences with your brand, and build stronger relationships with them. By leveraging market research to strengthen customer loyalty, you can differentiate your brand from competitors, increase customer retention, and drive business growth.
How can a market research agency help your brand improve customer loyalty?
A market research agency can help a brand increase customer loyalty in several ways:
Conducting qualitative and quantitative customer research: A market research agency can conduct in-depth customer research to gain insights into customer needs, preferences, and behaviors. This research can help a brand better understand its customers and develop strategies that meet their needs, leading to increased loyalty.
Mapping a customer’s journey: A market research agency can develop customer journey maps that provide a visual representation of the customer's experience with the brand. By understanding the touchpoints and pain points in the customer journey, a brand can identify opportunities to improve the customer experience and increase loyalty.
Conducting brand health studies: A market research agency can conduct brand health studies to assess the brand's overall health and reputation among customers. These studies can identify areas where the brand can improve its image and increase customer loyalty.
Measuring customer satisfaction: A market research agency can help a brand measure customer satisfaction through surveys, focus groups, and other research methods. By understanding what drives customer satisfaction, a brand can improve its products, services, and customer experiences, leading to increased loyalty.
Developing and testing loyalty programs based on data-driven customer insights: A market research agency can help a brand develop, concept test, and A/B test effective loyalty programs that incentivize customers to remain loyal to the brand. Just as you saw in the Starbucks example, these programs can drastically increase customer engagement and strengthen the relationship between the brand and its customers.
A market research agency like Bixa can provide valuable insights and data that can help a brand better understand its customers, improve the customer experience, and increase loyalty. By leveraging the agency's expertise and research methodologies, a brand can develop effective strategies that build strong relationships with customers and drive business growth.
Book a time with us today to talk about how we can help you understand your customer loyalty, and design a program for success.
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