CASE STUDY

Starbucks® Rewards saw 3X revenue lift from offers using Dynamic Offer Optimization

The #1 coffeehouse chain delivered 1:1 individualized offers to 18.9M members 10X faster with Formation’s Offer Optimization Platform



THE GOAL

Become the most personalized brand in the world to 18.9M+ loyalty members

Starbucks Corporation – the largest coffeehouse chain with more than 31,000 stores around the globe – had an ambitious goal: to become the most personalized brand in the world.

To achieve this goal, the loyalty marketing team sought to deliver individualized offers to more than 18.9 million active members of the Starbucks® Rewards loyalty program.

The Business Challenge

Scale loyalty offers beyond traditional segmentation

Starbucks wanted to grow revenue from its loyalty program through individualized offers. Their aspiration was to move beyond traditional segmentation all the way to individualized targeting.

However, the company’s existing tools and systems were not able to support 1:1 individualized offers at scale or the speed of the end-to-end marketing process.

The Solution

Transformed offer optimization: from insight activation to 1:1 reward fulfillment

To achieve their goals, Starbucks used the Formation Offer Optimization Platform to power millions of individualized offers to members of My Starbucks® Rewards.

The platform enabled Starbucks to combine their disparate data sources to construct, deliver and manage individual offers, resulting in significant sales lift for the company’s personalized marketing campaigns.

The coffeehouse chain optimized offers for each My Starbucks® Rewards member in numerous ways using dynamic actions and dynamic rewards; by specific categories, sub-categories or products; and by the amount and type of rewards.

Transformed offer optimization: from insight activation to 1:1 reward fulfillment

RESULTS

100,000X


Increase in the number of offer variations

3x


Increase in personalized marketing sales lift

10x


Reduction in the time it takes to develop and launch offers

The Outcomes

3X more revenue lift per offer than the segmented approach

After integrating Formation’s Offer Optimization Platform with the company’s data sources and marketing channels, Starbucks was able to:

  • Create individualized offers at enterprise scale
  • Continuous learning and optimization over time
  • Synchronize cross-channel experiences
  • Improve the customer experience
  • Dramatically increase execution speed and reduce manual work
  • Conduct Advanced Experiments
  • Measure impact

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