Starbucks ran a BOGO deal disguised as referral campaign
Instead of the usual buy 1 get one offer, they encouraged people to bring a friend along. I want to discuss the untapped potential of Starbucks' disguised referral program.
Getting a friend means bringing anyone — your boss, parents or even your ex. This gives people more possibilities to invite people.
Instead of running a traditional, boring BOGO scheme, Starbucks turned it into a referral marketing campaign at scale.
There were a few advantages
New user activation
Resurrection of a churned user
Building habit loops for existing users and driving up loyalty
Maximizing reach through influencer partnerships
And Starbucks promoted the offer via influencer marketing, because distribution is everything.
Did Starbucks Miss Out on Retaining New Customers?
But I wasn't sure if they'd retain these newly acquired users. It wasn't clear from their campaign.
So I went to Starbucks on the 7th of May to figure out what they'd do to retain new customers and drive up repeat purchases.
Surprisingly, they were doing nothing. 🤔
We went in. Paid cash. Had the coffee. And we left.
First impressions matter: Starbucks' overcrowding problem
It was so crowded and people had to queue up outside the store in order to be let in. This was clearly not the kind of experience what Starbucks stands for — and why people pay for. So, it'd be harder to retain first-time visitors who have a sub-optimal experience.
Missed opportunities to close the referral loop
On the surface, I couldn't find any initiatives that were meant to close the referral loop. So I went to look more closely and I found some.
1. There were coupons printed out
There was a pamphlet that could be used as a discount code.
There was a time limit to redeem to get people into the habit. It looks like bi-monthly is the natural frequency that Starbucks is aiming to nurture users into.