Does Starbucks’ new free Wi-Fi offer really raise the loyalty bar?

Posted by Sharon Goldman on June 15, 2010

2 comments | 1815 reads

No one who loves Starbucks doesn’t love the fact that they’re now offering free Wi-Fi in its over 6500 locations, right? My question is: How much will this move truly move the Seattle-based needle when it comes to customer loyalty?

After all, one of the reasons Starbucks is suddenly going the free Wi-Fi route (instead of getting Wi-Fi through a loyalty card) is that they’re in a stiff coffee competition with other chains such as McDonald’s, which has been offering Starbucks-like lattes for some time and already has free Wi-Fi in its locations.

So, Starbucks is really just evening the playing field. In addition, they’re adding a proprietary content network called the Starbucks Digital Network, through a partnership with Yahoo. They say it’ll offer unique local content not available anywhere else — but users must log in with a unique identifier, so the company will be gathering new data — possibly a good omen for a new data-driven understanding of customers? Free Wi-Fi is essential, of course, for this new model to work.

Still, overall, this move mostly seems like a simple must-have on Starbucks’ part — after all, more and more people expect free Wi-Fi wherever they go and if the competition’s already offering it, they have to stay in the game.

To my mind, this doesn’t seem like it will be a true loyalty game-changer…but hey, I don’t really drink much coffee, so what do I know? Let me know what *you* think about Starbucks latest customer offering. Does it take loyalty from tall to grande?

Sharon Goldman

Sharon Goldman is Senior Editor for COLLOQUY, published by LoyaltyOne.

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David Mangen

June 15, 2010

Kano Model

In Kano methodology terms, this feature is a Must-Be as opposed to a One-Dimensional or Attractive. It is IMHO very much a reactive defensive strategy.

David J. Mangen

Graham Hill

June 15, 2010

What Business is Starbucks In?

Hi Sharon

As David suggests, this looks like a defensive move.

Starbucks when it was founded was novel, fresh and brought the great taste of Italian coffee to the masses. Now there is plenty of competition, much of it providing vastly better coffee than Starbucks' tired shops. And in much nicer surroundings. I have defected from Starbucks in Germany to McCafe for everyday coffee (cheaper, better tasting, more convenient) and Segafredo Zanetti for special coffee (more expensive, vastly better tasting and authentic Italian service).

With WiFi available almost everywhere for free these days, who needs to suffer Starbucks' coffee for the sake of reading emails or surfing the web.

It rather begs the question. Does Starbucks really know what business it is in anymore?

Graham Hill
Customer-centric Innovator
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