Starbucks recently announced a partnership with The New York Times where, beginning in 2016, Starbuck’s loyalty program members will be able to read select daily news articles from the paper for free in the Starbucks mobile app. This is another content-based reward similar to their iTunes Pick of the Week Song.
We sat down with Joe Pino, Director of Client Success, who works with an array of leading brands to design and execute customer loyalty strategies to get his perspective on the Starbucks / New York Times loyalty partnership.
Q: What are overall thoughts on Starbucks delivering New York Times content as a loyalty perk?
JP: In a lot of ways this partnership makes a lot of sense; not because they’re two major brands, but also because of the synergy it delivers. Our team is always advising our clients to deliver relevant experiences to customers beyond mere discounts or specials. The news and coffee go together like bacon and eggs. Given the general nature of a Starbucks loyalty member grabbing a coffee it provides relevant value to deliver free access to the New York Times, gives the paper added exposure for upsell opportunities and provides Starbucks with the additional value-add for their loyalty program. It also will presumably widely engage the mobile channel for consumers, which has been at the core of Starbuck‘s strategy. The challenge for both brands is to consistently deliver relevant content for a large swath of consumers across 15 free articles per day while not diminishing the overall value of the Times. In other words, give them just enough, not too much, not too little. This is another dimension of content for their app which extends beyond the Apple iTunes relationship which provides free preselected music and app downloads.
Q: What lessons can other retailers and loyalty programs learn from this announcement?
A key takeaway for other brands is to look beyond discounts and specials to motivate customers and deliver value. Beyond this, look for synergies that align with your product and brand’s overall goal. The challenge is to find a win-win in the sort of partnerships that delivers value to both parties and the end user. Where brands can go beyond Starbucks is to deliver experiences and benefits that are personalized to the individual customer to truly enhance relevancy and motivate them towards the brand’s end-goals.
Q: How does this partnership demonstrate that consumer loyalty is no longer just about discounts and freebies?
While this is certainly a value-added move for Starbucks and a indicator of the market moving towards aligning value and experience within the market, a vast majority of companies – even those who state they want to avoid being seen as discount brand – are still fully embracing coupons, discounts, sales and blowouts to drive traffic and transactions. This not only discounts the brand and forces it into hand-to-hand pricing combat, but also often diminishes the perceived value and loyalty of customers given that these tactics tend to attract individuals loyal to price over brand.
