CASE STUDY

Leveraging the Power of Personal Offers for Growth

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

THE OPPORTUNITY

Starbucks + Formation

Starbucks wanted to grow revenue from its loyalty program through personal offers. Their aspiration was to move beyond traditional personalization all the way to individualization.

However, the company’s existing tools were not able to support personal offers or the speed of the end-to-end marketing process the loyalty marketing team desired.

THE SOLUTION

Powerful Offer Automation System

To achieve its goals, Starbucks used Formation’s powerful offer automation system, which enabled the brand to deliver millions of individualized offers to members of Starbucks Rewards.

With Formation, Starbucks was able to use disparate data sources – including transaction, product, loyalty, and store information – to construct, deliver and manage impactful personal offers.

Machine learning was used to individualize and optimize offer selection for each Starbucks Rewards member. Each offer was individualized in numerous ways, including the number and type of actions; specific categories, sub-categories or products; amount and type of rewards.

The Formation offer automation system made it easy for Starbucks to deploy individualized offers across channels by automating offer assembly, offer management, reward fulfillment, and KPI measurement and tracking.

THE DETAILS

How Formation Helped Starbucks

Create personal offers at enterprise scale: Starbucks was able to create millions of offers each week across multiple offer types. Each type of offer was constructed to improve certain customer behaviors including frequency, category exploration, cross-sell and upsell.

Individualize offers and improve over time: Machine learning was applied to Starbucks’s customer data and the customer’s interaction patterns (or lack thereof) to optimize offer individualization and offer selection.

Synchronize cross-channel experiences: Personal offers were delivered across channels including email, the mobile app, and push notifications.

Improve the customer experience: Starbucks Rewards members could see their progress in real-time, with their unique offers and status reflected in the mobile app.

Dramatically increase execution speed and reduce manual work: The Formation solution automated many facets of the offer process including development, deployment, and measurement leading to dramatically faster operations and improved marketing operations efficiency.

Conduct Advanced Experiments: Safely, incrementally and reliably tested initiatives in the market using Formation's end-to-end experimentation feature.

Measure impact: Formation tracked and measured offer results in order to provide detailed attribution reporting against key performance indicators (KPIs).

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

SAMPLE OFFERS

RESULTS

10x


Increase in marketing operations execution speed

3x


Increase in personalized marketing sales lift

+20%


U.S. Rewards Member Spend

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