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Need to learn from the Mermaid.

 
 
 
 

I get the Wall Street Journal everyday and have the opportunity to give it a quick read and saw something interesting in it yesterday talking about of Starbucks. It seems like they have had a lot of articles about the company since I first started getting it a few weeks ago, but that's besides the point. The article was talking about how the reloadable Starbucks card is now accounting for something in the nature of 25% of their sales in US stores.

What I find signifcant with this relevation is that it is creating a group of people that are really focused on those little cards. Basically the person with a Starbucks card and twenty bucks on it when out with the choice between the Mermaid and another shop is almost always going to pick the store they have money at. This really gives Starbucks the upper hand when it comes to competing.



Edit: Their link to embed their video isn't working right so here is a link instead.

It's rather ingenius really, people use the gift card and get some rewards like a free drink on their birthday or a free extra pump of syrup in their coffee. Also, I am sure people really want to get to that Gold Card status. I know I was well on my way to getting one not too long ago, it's rather addicting trying to get those stupid 30 stars.

My real point is that I think specialty coffee needs to do more to encourage repeat business. I think a site like Roaste is probably the best example of what I think small roasters can do. Obviously it's hard to compete with the mermaid just because of their size, I mean I can use a Starbucks card in SF or NY or Kansas City, it doesn't matter and I doubt there are any other shops that are in so many places. But banding together makes it easier to compete.

It would be interesting to see if there could be something more akin to a disloyalty card that has been introduced in a few cities to encourage people to go to various shops. Maybe even something that if you could get a few different coffee shops to agree to do in a big city like a New York or Portland where they could have a gift card that worked at any of the stores and perhaps even had some of the same rewards. Obviously its hard to have competing business work together, but it does seem like its more of a community than other industries.

Please do note some of the benefits of buying from small roasters here; $19.00 for six months unlimited shipping, 2 dollar credit for reviewing purchases, 2% back on all purchases, and 10% off coffee subscriptions that can be canceled at anytime.

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REVIEWS & COMMENTS

  • @WAKENOT

    intrepid510 | Fri, 02/10/2012 - 15:25

    I would love to see some sort of rewards program that is done through a variety of shops, besides a disloyalty card, although having a more permenant one would at least be a start.

  • LOYALTY CARDS

    Wakeknot | Wed, 02/01/2012 - 22:06

    drive me crazy. there is an amazing percentage of gift cards that never get used so you can imagine why stores love them. now a disloyalty card I could get behind!

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  • @KARRDE

    intrepid510 | Sat, 01/21/2012 - 14:57

    I have to say tho that for the most part if you are only use to watery coffee Starbucks is something different that you may find you like especially with a dash of milk and sugar.

  • I'M CONVINCED THE ONLY

    Karrde | Sat, 01/21/2012 - 00:45

    I'm convinced the only reason for Starbuck's popularity is general ignorance of the ways of making good coffee at home. You save money, time and get a much better product by making it at home.

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  • @ERIC

    intrepid510 | Fri, 01/20/2012 - 22:44

    Agreed they give a little bit to people and they are willing to drink it up, so I think it might make it harder for small shops to do battle if the cash is only good with the mermaid.

  • MER-MADE

    EricBNC | Fri, 01/20/2012 - 18:31


    The marketing forces at work are impressive - herd mentality and the effort spent to establish status and success even in the mermaid's false economy is a tribute to the power of that brand.

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  • @HOONCHUL

    intrepid510 | Thu, 01/19/2012 - 15:27

    I think some of it is a lot more to do with what Gman was saying that they market themselves really well as almost a status symbol to a lot of people and it really does drive people to go there.

  • @JBVIAU

    intrepid510 | Thu, 01/19/2012 - 15:26

    If you get them regisitered to you they give you some benefits that I wish were offered elsewhere for frequent customers.

  • @GMAN

    intrepid510 | Thu, 01/19/2012 - 15:25

    Well for a time when where I lived had no good options for coffee and I did frequent the Starbucks, I would use my card a lot and reload it. Mainly because of the benefits of free refills on drip in store and the free syrup pumps into your coffee you could make any regular latte or frap into a flavored one just without the carmel or mocha drizzle.

  • @SON TON

    intrepid510 | Thu, 01/19/2012 - 15:24

    I have been thinking about how small roasters could do this. Besides the benefits that frequent buying gets you here, but for actual coffee shops I think a shared loyalty card would be interesting. It would be nice if the shop by your house that XXX Roasters and that shop by your work YYY Roasters would give you credit for buying at their shops.

  • @EYAL

    intrepid510 | Thu, 01/19/2012 - 15:22

    Thanks for doing that, it's still not working for me but it's hard to say if its because of the filters or the site, yeah 25% is crazy beans.

  • STARBUCKS MUST BE DOING

    hoonchul | Thu, 01/19/2012 - 12:52

    Starbucks must be doing something right if people are pay for their overpriced coffee. Even I will visit them once in a while just because of the convenience factor.

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  • CONFIRMED

    jbviau | Thu, 01/19/2012 - 11:48

    Those cards *are* very convenient to use. I've received them as gifts in the past and appreciated little things like how they sped up the transaction and how your receipt showed the balance remaining on the card, etc.

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  • THIS BRINGS ME TO WONDER, IS

    GmanJenks | Thu, 01/19/2012 - 10:20

    This brings me to wonder, is Starbucks a coffee company or a marketing company that happens to sell coffee? I no longer believe that coffee if their first priority but marketing and image are foremost in any planning they do. I do find 25% uptake on the cards a little hard to believe. I wonder if that is a spike as a result of people receiving gift cards for Christmas? I would like to hear usage numbers in April or May and see if people have continued to reload and use their cards or not. In the past I have received these cards as gifts and it did influence my buying decision, but never reloaded the card for extended use.

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  • *BUCKS!

    Son Ton | Thu, 01/19/2012 - 10:15

    Yeah, starbucks have the power of marketing to help them reach more people and with idea such as gift card, they are encouraging more people to come to their store. It would be great for specialty coffee shops to somehow do the same.

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  • VIDEO ADDED

    Eyal Rosen | Thu, 01/19/2012 - 06:21

    Embedded the video for you. It seems to be okay once I plugged in the embed code into the HTML pop-up window.

    On a different note, 25% using the loyalty card, wow!

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  • @YEAHYEAH

    intrepid510 | Wed, 01/18/2012 - 17:50

    Funny I already saw that a while ago! It would be interesting if a few shops could band together and maybe try sharing a frequent customer card or something of that nature that would not require a user to purchase from every shop if its out of their way.

  • DISLOYALTY

    yeahyeah | Thu, 01/19/2012 - 06:16

    I'm a big fan of the disloyalty concept as well. Here is one example of a local cafe encouraging consumers to frequent other local cafes and roasters: http://broadacrecoffee.com/2012/01/09/second-saturday-coffee-bike-tour/
    It is basically a cafe crawl that hits some of the best cafes in Sacramento.

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