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CRM in an Era of Habit Disruption

Posted on May 7, 2020May 7, 2020

The Covid-19 pandemic has disrupted people’s daily routines. Want to grab that favorite cup of coffee down the street? Sorry, the coffee shop is closed. Spaghetti and meatball night? Too bad, the local store ran out of ground beef. Client meeting at the office? Nope, Zoom meeting with surprise appearance of adorable kids or pets is the way to go now.

In these and many other areas of life, the well-rehearsed habits people had from the “old” days are suddenly thrust into the spotlight of their consciousness. As a result, old habits are breaking, and in their place new habits sprout. These transformations in habits have significant consequences for business. Some brands are being left behind from broken old habits, while others are discovering opportunities among the new habits. Overall, businesses that understand this habit transformation process about their customers will be better prepared to transition through the pandemic and beyond.

This article looks into psychology research to shed light on the habit transformation process and discusses how customer relationship management should respond to such disruptions.

Key Trends in Marketing Gamification

Posted on May 15, 2019May 15, 2019

From entertaining Super Bowl commercials to wildly viral video campaigns, marketing has always had a flair for the playful. It is no surprise then that the concept of gamification is readily integrated into many aspects of marketing. Well-known examples include Starbucks’ creative use of gamification in its reward program and McDonald’s adaptation of the Monopoly Game. In this article, I’d like to outline several key trends I observe in the application of gamification in marketing.

Gamification and Branding

Good gamification and good branding share one thing in common: a good story. In a world of social media and user-generated content, a brand has to shift from hard sell to telling good stories about the brand to attract consumers. The new generations of consumers appreciate a brand that is authentic and relatable. Gamification will play an important role in brand storytelling by integrating bits and pieces of brand stories into gamified experiences. It can bring the brand story alive and let the fun experiences translate into memorable brand moments for users. Coca-Cola’s huggable vending machine is a good example of such experiences.

Using Gamification to Increase Customer Engagement

Games are engaging, and customer engagement is a valuable asset in today’s marketing. One brand adept at leveraging board game concepts is Starbucks. The Starbucks Hopscotch game that ran this spring challenged users to make specific purchases (e.g., buying lunch, mobile ordering) in order to hopscotch their way to 400 bonus stars. Compared to an old boring promotion, gamification keeps users on their toes and offers them the gratification of winning challenges and rewards. The result? An audience who won’t easily get comfortable or bored with a brand and who will want to be part of the exciting experiences that the brand has to offer.

A Closer Look at Starbucks Rewards Program Redesign

Posted on April 3, 2019April 3, 2019

Changes are coming to Starbucks Rewards. On April 16, Starbucks Rewards will be expanding its reward structure to five levels. A few other changes will be made to the program too. Will these changes make this leading loyalty program even better? What might be motivating these changes? How will the changes affect the program and its members? In this post, I attempt to dissect these changes and offer my assessment of the new Starbucks Rewards program design.

What Changes Exactly?

The biggest change to the program is the addition of more reward thresholds. Instead of a single reward threshold of 125 stars, it will feature five levels of rewards ranging from 25 to 400 stars. The new program will also erase the current difference between a Gold member and a base member, allowing both to enjoy the same set of benefits. The table below compares the current vs. the new program structure.

	Current	From April 16, 2019
*Earning Stars*	2 stars per $ spent	2 stars per $ spent (unchanged)
*Reward Levels*	A single level, at 125 stars	Five levels, at 25, 50, 150, 200, and 400 stars
*Reward Items*	A free food or drink item, excluding alcoholic beverages and multi-serve food and beverage items	25 stars: free drink customization (e.g., extra shot, flavor, etc.); 50 stars: a free hot brewed coffee or tea, or a free bakery item; 150 stars: a free handcrafted drink, hot breakfast, or parfait; 200 stars: a free lunch sandwich, protein box, or salad; 400 stars: a free select merchandise (e.g., gift) or at-home coffee.
*Membership Tier Structure*	Green and gold. Gold is qualified by earning 300 stars in a 12-month period.	Single tier
*Base Tier Benefits*	A birthday reward Free in-store refills of hot or iced brewed coffee and tea Early or extended access to some promotions and offers Personalized offers and coupons Can NOT redeem stars for free rewards until after reaching Gold level	Same as before, but now everyone has the same ability to redeem their earned stars for rewards. All members now also receive a monthly double-star day that used to be reserved for Gold members.
Gold Tier Benefits	All Green benefits The ability to redeem every 125 stars earned for a free reward A double-star day as selected by Starbucks A personalized gold card	Not applicable, as there will no longer be a premium tier. Gold members do not lose any benefits. They just have to share them with everyone else.
*Star Expiration*	6 months after the star is earned	6 months after the star is earned (unchanged)

More Complex Reward Thresholds

The new design significantly expands the reward structure of the program from one to five levels. What could be driving this change?