What SA businesses can learn from Starbucks

Posted by Payment24

Fin24, 5 Nov 2015.

When it comes to doing business in the digital landscape, there’s a lot local companies can learn about adding value to the customer experience and sustaining brand loyalty.

Local businesses have not yet optimised the potential of mobile technology in loyalty programmes and have used it in limited ways. The digital loyalty programme of American coffeehouse, Starbucks, is seen as a global success story with 10.4m active members, says Nolan Daniel, director of Paradigm Group.

“Most companies venturing into the digital arena just launch a free-standing app or engage in digital marketing,” says Daniel. This does not deliver the full extent of the customer experience and relationship building benefits that mobile technology can offer both the company and its customers, he says.

It took several years for Starbucks to perfect the mobile integration into its loyalty programme; there will always be a learning curve in rolling out technologies, says Daniel. The programme now delivers convenience to customers and businesses, bringing traffic to stores, streamlining operations and cutting operational costs.

Starbucks invested heavily in mobile technologies in order to improve their customers’ in-store experience. Complementary features such as mobile ordering and payments were introduced and rewards offered are in line with what customers want, explains Daniel.

From a technical point of view, the Starbucks model can be replicated in South Africa. The Pew Research Centre reveals that nine out of 10 adults in South Africa own a mobile phone, a third of these being smartphones. Given that Starbucks’ customer base is predominantly from the middle to upper class, those who own smartphones would be able to run the mobile application, says Daniel.

Furthermore, research by the South African Loyalty and Rewards Survey 2014, reports the loyalty market has not yet reached a level of saturation in the restaurant and take-away sector. This suggests that the Starbucks loyalty programme can expect a decent customer uptake from South African consumers, says Daniel.

With the world transitioning into a digital environment, businesses should incorporate a digital strategy with their traditional marketing strategies to engage customers holistically. The digital strategy would depend largely on the organisation’s target customers, says Daniel.

Customer centricity is key and factors such as age, location and living standard measure groups must be carefully considered. Another consideration is whether to build and manage the services in-house or whether to outsource to a specialist technology partner. Security and the protection of customer information is vital and the organisation should consider how it will protect and deal with data associated with the automation of services, advises Daniel.

Finally, it is important to ensure that the digital strategy is aligned with the vision and direction of the organisation and that its performance is measurable, he says.

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