Starbucks (SBUX) pioneered the digital loyalty program, but at its heart the program was basically a punch card.
If customers bought enough items at the coffee chain, they earned stars, which could be redeemed for free coffee and food and even for items like mugs (if you saved up enough stars).
It was a simple and understandable program that enabled the company build its digital presence. The chain leveraged its app to increase mobile order and pay, increasing efficiency at its stores. Customers order through the app, their orders print in stores, and baristas make whatever was ordered.
Ostensibly, the system is better than taking orders at a counter, where human error becomes a much bigger factor.
Starbucks has a very good thing going but it has perennially tried to change the program, including a recent plan to add nonfungible tokens
That seemed like a reach, a classic case of a business giving customers something they didn't want. Now, however, Starbucks has fixed that by making a deal with Delta Airlines (DAL) that its members should absolutely embrace.
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Coffee and Air Travel Team Up Again
Starbucks is present in nearly every major U.S. airport and many worldwide. Now, the chain has formed a direct link with an airline that will benefit its members.
As of Oct. 12, U.S. members of Delta SkyMiles and Starbucks rewards can link their accounts by visiting either deltastarbucks.com or starbucksdelta.com.
"Once the accounts are linked, members will earn one mile per $1 spent on eligible purchases at Starbucks, and on days when enrolled members have a scheduled flight with Delta, they will earn double stars on eligible purchases at participating Starbucks stores," Delta said in a news release.
Current members and new members of both companies' loyalty plans are eligible for the program. In addition, customers who link their accounts between Oct. 12 and Dec. 31, 2022, will earn an additional 500 miles and, once they make a qualifying purchase, 150 stars.
“We’re continuing to evolve Delta’s SkyMiles program to give our customers valuable, premium experiences not just on the days they travel but in their everyday lives as well,” Delta Loyalty Vice President Prashant Sharma said.
A Smart Deal for Delta, Starbucks, Members
Airline loyalty programs have a problem when it comes to casual flyers. It takes quite a few flights to earn free flights or upgrades, so for people who fly only a few times a year, these programs can seem meaningless.
Partnering with Starbucks enables Delta to give its more casual program members a tangible benefit for joining the SkyMiles Program.
And while Delta is Starbucks's first partner in its expanded loyalty program, the airline has already added partnerships with Instacart, Lyft (LYFT), and the rental-car-sharing app Turo.
Starbucks has entered a new three-year redevelopment program under Chief Executive Laxman Narasimhan, who is taking over from interim CEO Howard Schultz. The program has a number of pillars but expanding the chain's digital footprint will be key.
"Today’s customers are increasingly prioritizing the effortless, experiential convenience and personalization enabled by Starbucks Rewards, Mobile Order & Pay, and Starbucks Delivers," the company said.
"To make it even easier for customers to get Starbucks when and where they want, Starbucks is growing its Starbucks Delivers program in the U.S. with a new partnership with DoorDash (DASH), which will expand to a national scale alongside UberEats (UBER) in fiscal 2023."
The Delta deal builds on that and should provide members with a meaningful increase in benefits if they fly on the airline.
