For the past few years, Starbucks has been running its famous birthday drink offer, giving you a free drink on your special day.
But why do they care about your birthday?
And more importantly: why are they nicer to me on my birthday than most of my friends… ?
1. What Is the Norm of Reciprocity?
2. What Drives Immediate and Ongoing Word of Mouth?
3. My Starbucks Rewards Loyalty Program Membership Jumps Nearly 30%
4. Personalized Marketing Drives Buyer Readiness and Sales
5. The Principle of Reciprocity and Influence Marketing
6. What Your Starbucks Habit Really Costs You
7. Average American Worker Spends Nearly $1,100/Year On Coffee
We all know that the success of the Starbucks brand has never been about their coffee. It has always been about their image.
I’m sure it’s not controversial to say so, but Starbucks doesn’t come anywhere near close to providing the best coffee. There are plenty of ways to get hold of something elsewhere that tastes a lot better and costs way less (sorry, guys).
The theory is that a free cup of coffee customers feel that they are valued, and this makes Starbucks seem like a respectable brand to be associated with.
Though the gesture may seem simple it creates a strong bond between the customer and the brand, and keeps them coming back for more. The key word (ok, two words) here is brand loyalty.
The Rule of Reciprocity
The cost of producing a cup of coffee is so little in comparison to the potential benefits of boosting their customer base. In fact, it’s almost nothing.
Assuming a pound of coffee beans costs close to $14, a cup of coffee would cost something in the vicinity of $0.35 to produce. So as far as Starbucks is concerned, a free cup of coffee is a negligible investment to pull in new customers or to step up spending habits of their existing customers.
When you get your free cup of brew from Starbucks on your birthday, you feel like somehow you owe something to them.
It’s called the Rule of Reciprocity, and it’s very effective.
Starbucks has done something nice for you (given you free coffee to help celebrate your birthday) and now you will be more likely to do something nice for Starbucks, such as:
- give them your continued business
- mention this on the internet
- tell a friend about how awesome it was that Starbucks gave you free coffee
- bulk buy enough coffee to feed a boy scout network
So in essence, they make a slender investment and stand to gain hundreds of dollars from a customer over the period of a year.
The Power of Freebies
As we said, the free cup of coffee is a tiny investment to make towards extending their customer base.
And this free birthday gift is not different from what any company uses to build a new market – Freebies.
The truth is, if a company offers something great and attaches a cost to it, it will be tough to find takers for it. But once they offer anything for free, it will ALWAYS be in demand.
The objective is to get the product in your hand and create a positive image of it in your head. And as a bonus, it’s passed as a gift on your birthday.
When you start your day with something positive, you are going to talk about it, which is exactly what Starbucks wants.
When you tell your friend you got your free cup of coffee from Starbucks, you relay that positive experience to that person. As a bonus, the brand builds on its positive image at no extra cost.
Research, Research, Research
OK, so there is one little catch for claiming your birthday drink.
You can get the coffee of your choice on your birthday for free, however you will need to sign up for the My Starbucks Rewards program.
But why would they want you to do that?
This helps to build a giant database of their customers. Their researchers can then go all kung-fu on your spending habits, preferences, and more. Not only does this boost their email database numbers (which is worth a lot to companies), but it also gives them a database that reflects preferences of customers and what product is in demand in a given demographic.
It’s unlikely that you’ll be coming into one of their stores to collect your drink by yourself. Instead, it’s possible that you’ll be flanked by an army of friends who, of course, have to pay for their coffee.
While there’s probably a lot to be said for the positive impact the free birthday reward has on your friend’s viewing the chain, it at the very least ensures that Starbucks are in profit right off the bat by simply having one person pay full price for a drink.
The power of personalisation in marketing is huge, and this includes the potential of using your birthday as a way of connecting with you.
Starbucks makes sure that they make you feel that they acknowledge your special day. You always prefer to stick around and come back to a place where you are recognized as a person.
On average, Starbucks customers visit their local store at least six times a month. This is just the median. The loyalty thickens with another layer of caffeine-fuelled superfans who (somehow) visit the store 16 to 20 times a month.
When you get your free cup of coffee on your birthday, this quotient of personalization is just stepped up and you are prone to spending more.
With an already obsessed audience then likely to bump up their spend exponentially, the potential profits to Starbucks are huge.
Making a coffee-captivated customer base even more obsessed. That’s the idea that the Starbucks free birthday drink is built upon.