Growing Through Loyalty: How Starbucks’ App and Loyalty Program Evolved into Customer Journey Companions

Loyalty programs (LPs) and branded apps (BAs) are relationship building tools that have evolved with time and technological advancements to play a crucial role in consumers’ journeys. In innovative loyalty strategies they intertwine and provide a wide array of valuable services to customers, from personalized offers to digital payment, that elevate customer experience and enhance firm performance. However, they require continuous investment and raise questions on the long-term impact on profitability, especially because little is known yet on how such service-enhanced LPs and BAs affect user behaviour. Based on analysis of company annual reports, transcripts of earning calls and shareholders’ meetings, and other secondary sources – this case aims to address the above questions by tracing how Starbucks’ loyalty strategy evolved over twenty years from LP to BA, turning into a journey companion for customers with innovative services like remote order and digital wallet, opening several new revenue and profit streams along the way. The findings provide valuable insight for loyalty managers who want their LP and BA to function like a helpful travel companion on customer journeys.