Starbucks and Spotify partnership highlights link between mobile loyalty, content
Starbucks’ partnership with streaming service Spotify points to the untapped potential of combining food and beverage marketers’ mobile loyalty programs with music, as younger demographics put smartphones at the center of their content consumption and may be swayed to join programs with cross-partnership perks.
Spotify’s streaming will now be integrated with the beverage brand’s popular mobile loyalty program, My Starbucks Rewards, which boasts 10 million users, and will enable customers to curate playlists for Starbucks stores. Although ride-sharing application Uber also maintains a Spotify partnership, the Starbucks announcement suggests the wide potential for other food and beverage brands to leverage music-based cross-partnerships to offer consumers more incentives to be active loyalty program members.
“From Uber to now Starbucks, you can see brands embracing technology to improve upon user experience,” said Ben Hordell, partner at digital advertising agency DXagency, Edgewater, NJ. “Because music is universally loved, it is a powerful medium to try to harness on your behalf.
“If the fit makes sense to add music, i.e., to improve your Uber ride or your time in a coffee shop, it makes a lot of sense.”
The Starbucks and Spotify partnership will encourage active participation among members of My Starbucks Rewards, who will be able to create their own in-store playlists for Starbucks stores and continue listening to them even after they have left the premises.
The playlists will be available through both the Starbucks and Spotify apps. Customers who purchase Spotify’s streaming packages will also be eligible to earn more rewards points, which can be redeemed for free beverages. This feature will mark the first time that Starbucks has enabled its points to be available outside of its stores.
“Loyalty programs and music platforms are likely to be more intertwined,” said Djamel Agaoua, CEO of MobPartner, San Francisco, CA. “Through its partnership with Spotify, Starbucks has given its customers a way to engage with its brand even when customers are not drinking their favorite cup of specialty joe.
“And Spotify has a new pool of 10 million potential subscribers to target. This kind of partnership would be very attractive to brand marketers.”
Each Starbucks bricks-and-mortar location has its own local playlist, which consumers will be no doubt excited to influence with their own musical tastes. As Spotify currently maintains a customer base of 60 million users, Starbucks is likely thrilled at the prospect of attracting more members to its mobile-heavy rewards program.
“It ratchets up the personalization of the program,” Mr. Hordell said. “From a free drink just for you on your birthday to baristas that know your name, a Starbucks experience can become quite personal.
“Now you will be encourage to stay and listen to music you love in a further customized experience.”
The partnership, which is expected to span several years, will come into effect this summer at Starbucks locations in the United States before the rollout continues to Canada and Britain. Starbucks employees at the brand’s 7,000 national locations will all be given a Spotify account to select the music played.
Consumers will be able to suggest songs, which may enhance their loyalty with the beverage marketer, already a favorite among many coffee enthusiasts.
Other food and beverage marketers with strong customer bases for their mobile apps, such as Taco Bell and Dunkin’ Donuts, may want to follow in Starbucks’ footsteps and tap a fellow streaming service or major platform for a cross-partnership opportunity.
Brands are hard at work to seamlessly integrate offline to online experiences,” Mr. Agaoua said. “Starbucks and Spotify is a partnership that makes sense—coffee houses and cool music go hand in hand.
“Spotify’s partnership with Uber, which enables you to remotely control the music that plays through your Uber’s speakers is another example of a successful brand collaboration. Brands should look for partnerships that will enhance their customer’s experience, not confuse them.”
Customers generally prefer a certain type of ambience when dining out or visiting their favorite café, and offering this type of control to the most loyal brand consumers displays Starbucks’ commitment to cultivating long-lasting consumer relationships.
As Starbucks has always been relatively musically inclined, with free song download cards available in-store alongside featured albums, the Spotify partnership will likely ensure that more customers pay for the streaming service and become receptive to promotions for its premium level.
Starbucks, or another food and beverage brand, could also conceivably extend the cross-partnership effort to include access to other types of easily consumable content, such as mobile news, movies and other videos. This would open up a plethora of possibilities for marketing efforts.
Ultimately, the incentives apparent for both brands, as well as the customers, prove that cross-partnerships are a valuable strategy for other food and beverage marketers to consider when it comes to their mobile loyalty platforms. It may be even more beneficial for those who seek to drive up the amount of members.
“Marketers should never chase a tactic simply because others are doing it, however if there is a fit, absolutely,” DXagency’s Mr. Hordell said. “This is a good opportunity for quick-serve restaurants and any other places where encouraging a consumer to stay longer may lead to increased revenue.
“Hearing your favorite song puts you in a good mood and if you can relate that passion to your brand, it’s a win.”
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York