21 million members contribute 76% of revenue. Starbucks insists on high customer orders. How can we learn the "membership model"?

This article breaks down Starbucks' "membership model" in detail and analyzes the ingenuity inherent in its model, which can be read by interested netizens.

In recent years, China's coffee market has grown significantly.

Public data shows that Chinese consumers consumed nearly 300,000 tons of coffee in 2022, nearly three times the amount five years ago.

However, with the prosperity of the market, competition in the coffee industry has become increasingly fierce.

Local brands represented by Kudi, Manner and Lucky Coffee have chosen to expand their stores frantically to occupy the sinking market.

Li Ning, China Post and Convenience Bee are cross-border investing in coffee.

Luckin Coffee is even more aggressive, becoming the first coffee brand in China to have more than 10,000 stores, with revenue of 7.2 billion yuan in the third quarter.

At a time when competitors are emerging one after another, Starbucks, which "insists on not lowering prices", has seen its performance increase instead of decrease.

Recently, Starbucks released its fourth-quarter financial report, with revenue of US$9.37 billion, an increase of 11.4% year-on-year.

Even more eye-catching data is that in the fourth quarter, the number of active members of the Star Rewards Club (those who have made purchases in the past 90 days) reached a record high of over 21 million, a year-on-year increase of 22%.

Data shows that Starbucks members consume three times more frequently than ordinary customers and contribute 76% of the store’s revenue.

Various data show that the "membership model" is becoming the new moat of the Starbucks brand.

This article will break down Starbucks’ membership model in detail to see what clever ideas its membership model has and how other brands can learn from it.

01Growth Membership System

Let’s first look at Starbucks’ growing membership system.

Starbucks' growth membership is divided into three levels: Silver Star, Jade Star and Gold Star members.

1. Silver Star (no threshold, free registration), including two types of membership benefits:

1) Purchase the Binding Star Gift Pack to upgrade directly and receive a promotion drink coupon

2) You can participate in various star-rewarding activities

2. Jade Star Level (accumulate four stars or purchase a gift package), including four types of membership benefits:

1) Jade Star promotion drink coupon

2) Birthday drink coupon

3) Venus in the Sky drink coupon

4) Enjoy Jade-level privileges forever

3. Gold level (accumulate 20 stars), including five types of membership benefits:

1) Gold Star promotion drink coupon

2) Birthday drink coupon

3) Anniversary drink coupon

4) Redeem stars for gifts

5) Gold Star exclusive electronic Star Gift Card

From the above content, we can see that compared with the complex membership systems of some companies, Starbucks’ level setting is actually relatively simple.

Silver Star - Jade Star - Gold Star, a simple membership level setting allows customers to choose to drink coffee in his home, how is this done?

Here, Starbucks used a trick: visualization of points.

According to calculations, it costs 250 yuan for users to upgrade from silver star level to jade star level, and 1,250 yuan from jade star level to gold star level, which seems to be a not-too-small expense.

If we use numbers directly for promotion, it is likely to dissuade a group of Silver Star members who are in the wait-and-see stage.

In order to reduce the perceived difficulty for customers and make the upgrade process more interesting, Starbucks introduced the concept of "level stars".

Level stars are a form of point display, with stars replacing consumption amounts.

Specifically, the system will accumulate a small star for every 50 yuan spent by the user.

Users can log in to the Starbucks mini program or app to check how many stars they have accumulated.

The visual upgrade progress and the stepped level benefits are similar to leveling up by killing monsters in a game, which encourages you to shop at Starbucks more frequently.

When a user collects the corresponding number of stars, it means that you can unlock the privileges of the next level.

From the above picture, we can see that the description of Starbucks' membership level benefits is clear and easy to understand. Through the display of visual graphics, customers can grasp all valuable information in a timely manner.

In terms of consumption scenarios, Starbucks has achieved full-scenario integration.

Whether you pick up your food in-store, take-out, order through the app or the official Tmall flagship store, you can accumulate stars for any purchase you make.

Freeing from platform restrictions and following account binding, digital integration has greatly improved the consumption experience of members. This is a major advantage that distinguishes Starbucks from most companies.

However, it should be noted that Starbucks’ points redemption rights are currently only open to Gold Star members.

This reflects another major significance of Starbucks' membership system, which is to efficiently screen high-quality users.

Although different companies have different definitions of "super users", for Starbucks, Gold Star members are the most loyal "super users" of the brand.

Through user segmentation, brands can focus their operations on this group of gold-star members, including but not limited to preferential treatment in terms of rights and interests. This group of “super users” can also bring more repeat purchases and value to the brand, forming a positive cycle.

02Paid Membership System

After talking about growth members, let’s take a look at Starbucks’ “paid membership system”.

As the leader in the coffee industry, Starbucks is very outstanding in the design of "paid membership".

Like the star levels, Starbucks’ paid memberships are uniformly named “Star Gift Cards”.

From the setting of Starbucks gift cards, we can see that Starbucks knows its customer base very well and has made detailed stratification of its core customer base.

It is specifically divided into four categories: office workers, freelancers, white-collar workers with high demands on quality of life, and business people who need to discuss matters.

According to user stratification, Starbucks has designed four types of rights and interests products, namely: Working Star Card, Play Star Card, Treasure Star Card, and Coffee Newbie Card.

Now, let me break them down for you one by one.

1. Treasure Star Card (for people with high quality of life)

Price: 68 yuan

Validity period: 90 days

This product is targeted at loyal customers who drink Starbucks all year round, and they can get their money back immediately upon purchase.

First, there are a lot of coupons, 5 half-price coupons, which is enough to save money;

Secondly, there are many scenarios, including in-store, delivery, and in-store pickup, which saves members time and effort;

2. Worker Star Card (targeted at office workers)

Price: 49 yuan

Validity period: 30 days

The product is targeted at office workers, so it can only be used on weekdays (30% off on designated drinks).

The number of coupons has also been carefully designed. Based on an average of 20 working days per month, one cup per day is just enough to cover all the expenses.

In addition, young workers generally get up late and do not have time to eat breakfast, so the card also thoughtfully gives away 4 coupons for 30% off designated foods, which can be used to buy desserts for breakfast.

3. Playing Star Cards (Anchoring Freelancers)

Price: 38 yuan

Validity period: 30 days

For customers who are used to ordering takeout while staying at home, Starbucks has launched the Starbucks Card.

As many as 30 takeout orders worth 20 yuan or more were offered a 9 yuan discount on delivery fees, helping this group achieve "takeout freedom".

Order one cup every day and it will be finished in just one month.

Just like the Working Star Card, it comes with 4 30% off coupons for designated foods, just in case.

4. Coffee Star Card (for business people)

Price: 49 yuan

Validity period: 30 days

This product is mainly aimed at business people who have business needs for face-to-face interviews, as well as couples and close friends traveling together.

Buy one get one free coupon for designated drinks, and get your money back on your investment in one order at the fastest.

Half-price coupons for designated drinks and 8 yuan off for 3 drinks over 50 yuan are effective supplements to help users save more money. In general, the more you spend, the more you save.

03Starbucks does not sell coffee but does “people business” through coffee

Through the membership system, we continue to dig deeper into Starbucks' "secret to success". You will find that, in essence, Starbucks does not sell coffee, but uses coffee as a medium to provide consumers with a "perfect experience".

Here, we can briefly give a few examples.

The first generation of Starbucks cups, although beautiful in appearance, will cause coffee to splash out of the small hole in the lid if you are not careful. If the deliveryman is not stable when riding his bike, it is likely that 1/3 of the cup will be missing when the delivery arrives.

In response to customers' suggestion to "block the small hole in the lid", Starbucks invested in the development of a reusable "splash-proof stick" to solve this problem.

Similarly, faced with the increasingly fast pace of urban life and tight parking spaces, many people find it difficult to stop their cars and leisurely go to a store to buy a cup of coffee when commuting to and from work.

Starbucks has insight into users' needs and concerns and launched the "Street Pickup" service.

Relying on Starbucks' advantage in the number of stores and combining it with Amap's technical strength in route planning and positioning, we provide customers with a park-and-pick-up service without having to get out of the car.

By having its store clerks take an extra step and wait a little longer, Starbucks has solved the problem of the "last ten miles" of consumption and further strengthened user loyalty.

In addition, in order to better understand the opinions and ideas of its members, Starbucks has also established a corporate website.

Chris Bruzzo, Starbucks' technology director, said the move is "aimed at opening a window for dialogue with customers and integrating it into our corporate fabric to improve service quality."

On the website, customers can make suggestions, participate in voting and discussions. Customer feedback will become an important reference for Starbucks' subsequent product development and service improvement. This is also a proof that Starbucks attaches great importance to "membership operations".

Final Thoughts

To sum up, the reason why Starbucks’ membership system is so successful is that it understands and values ​​its customer base well enough.

Whether it is the "Starbucks Rewards Card" or the "Street Pickup", every step Starbucks takes in innovation insists on being "user-centric", which is also the embodiment of its brand long-termism.

However, it should be noted that the design of the membership system is not static, but needs to be adjusted and improved based on market feedback and its own situation.

Author: Yan Tao; WeChat public account: Yan Tao Sanshou