Managing The Customer Life Cycle Marketing Essay

The main customer life cycle management processes are the customer acquisition, customer development and customer retention processes. These three processes determine how companies identify and acquire new customers, increase their value to the business and retain them for the long period of time (Buttle, 2009). We also review the key metrics or key performance indicators (KPIs) which companies can use to assess their customer life cycle performance (Buttle, 2009).

Customer acquisition is the process of acquiring new customers for business or converting existing expectation into new customers (Management Study Guide). The importance of customer acquisition varies according to the specific business situation of an organization (Management Study Guide). This process is specifically concerned with issues like acquiring customers at less cost, acquiring many customers, acquiring customers who are business oriented, acquiring customers who utilize newer business channels etc. (Management Study Guide).

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Starbucks offers the high quality coffee to attract and acquire new customers and retain their current customers around the world. They plated the coffee beans in different places in order to be able to provide great-tasting coffee for their customers. It is because every region has the different climates, soils and cultivation methods, thus, the coffees have different taste by producing in different places.

Furthermore, Starbucks not merely provide the best coffee. They also provide the fresh food for the customers in the morning even in the afternoon. Therefore, customers can choose Starbucks to enjoy a breakfast or lunch. Customers also can enjoy delicious desserts at the tea time such as pastries, sandwiches, cakes, muffins, ice-creams, and so on. Thus, customers can enjoy the fragrant coffee and delicious foods at the same time. Moreover, Starbucks also launched new promotional food to acquire customers. For example, their current new promotional food is low fat mandarin cranberry muffin which is a fruity and healthy muffin, thus, it can attract more customers who are emphasize healthy lifestyles.

Besides that, Starbucks emphasize healthy lifestyle, so they adopt great and fresh-tasting ingredients to prepare their foods and beverages. Customers can go their web sites to check the nutritional content of foods. It can ensure that the customers will intake of a balanced diet and will not be excessive intake of calories especially who are to lose weight. In addition, Starbucks also provide food service to the customers such as celebrations, meetings, gatherings, and so on. Customers can choose the places to organize their event, either at customer’s office or Starbucks’s outlet.

In addition, Starbucks will not fall behind in this rapidly changing technological era. They are installed the high speed wireless network almost in every branch. Therefore, customers can enjoy food and beverage simultaneously as well as be able get the updated information to access on the Internet. Moreover, customers are able to carry a laptop while handling their business task and enjoy a coffee with this Wi-Fi service. This Wi-Fi service will acquire many customers for Starbucks.

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Apart from this, the store design is one of the important reasons to acquire more customers to patronize at Starbucks. It is because store design will make an impression to customers. Starbucks put a lot of effort in the store design. They mainly adopted sustainable design and build methodologies. They are considering a coffeehouse should be a place to find connection. Starbucks are using four design concepts for build their store such as heritage, artisan, regional modern, and concept. Furthermore, Starbucks also provide a good environment for customers. Hence, customers are preferred gathering with friends, discuss the business with business partners or enjoy a tea time at Starbucks.

Customer Retention

Customer retention is the maintenance of continuous trading relationships with customers over the long term (Buttle, 2009). Customer retention is the mirror image of customer defection or churn. High retention is equivalent to low defection (Buttle, 2009).

First of all, Starbucks are using loyalty program for retention their customers. A loyalty program is a scheme that offers delayed or immediate incremental rewards to customers for their cumulative patronage (Buttle, 2009). Starbucks offers Starbucks Card to make the convenient when the customers purchasing or consuming with the ease of one quick swipe. The Malaysia Starbucks Cards is a stored value card. Customer can activate a Starbucks Card with just only pay RM20 at any Starbucks store in Malaysia. The Starbucks Card can be used to consume anything in their store without using monetary. Customers can reload their Card with cash, debit or credit card at any Starbucks store in Malaysia or simply reload it online. The Starbucks Card in Malaysia is only valid for use in all stores in Malaysia.

Besides the ease of convenience, customers can enjoy the variety of benefits when paying the purchases with a Starbucks Card at any store in Malaysia. For example, customers can get one complimentary Grande size handcrafted beverage of choice when purchased ten handcrafted beverages, a tumbler of any size and a whole cake. When the customers purchased any 8 packets of 250 grams whole bean coffee or 12-pack VIA® Ready Brew, or any coffee press that can get a complimentary 250 gram whole bean coffee or 12-pack VIA® Ready Brew. During the customer’s birthday month can get one complimentary slice of cake with a purchase of any handcrafted beverage.

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Apart from this, Starbucks also offer “My Starbucks Rewards” to earn free food and drinks. Customers can earn 1 Star every time you pay with your registered Starbucks Card or the Starbucks mobile app at a participating store or at StarbucksStore.com. As customers collect Stars, they move up to bigger benefits. There are three reward levels that have welcome, green, and gold. The welcome level, customers can get a little extra birthday love with a free drink or food reward on their big day. Starbucks will send you an email a few days before customer’s birthday reminding you of their reward. Thus, customers can just go to a participating store, tell the barista you have a free reward, then swipe their Card or scan their mobile app for proving. At the green level, customers need to collect five Stars in their “My Starbucks Rewards”, so they can enjoy the free refills during their visit at a participating store. If the customers collected 30 Stars within 12 months, they will reach the gold level. At the gold level, customers can get all benefits of welcome level and green level as well as free drinks or food reward every 12 Stars.

Besides that, customers able send an eGift to someone far away through the Starbucks Cards. Customers can straightly go to Starbucks’s web sites that choose a card design, add the recipient’s name and add some special message to send an eGift for your friends or relatives far away. However, this service requires payment with debit, credit or Starbucks Card.

Whereas loyalty program are relatively durable, sales promotions offer only temporary enhancements to customer value (Buttle, 2009). Retention-oriented sales promotions encourage the customer to repeat purchase, so the form they take is different (Buttle, 2009). Starbucks offer many promotions to customers especially on the opening day.

Starbucks offer a “buy-1-free-1” voucher to all the drive-thru customers when had started first Klang Valley Starbucks Coffee drive-thru at Persiaran Setia Impian, Setia Alam, Selangor. Furthermore, Starbucks also offers one free donut per purchase at Starbucks Drive Thru window when they started operate the store at Cyberjaya. Starbucks also offers a “buy-1-free-1” through the drive-thru window on the opening day at Tanjung Tokong, Penang. Another day, Starbucks also offers “buy a Hojicha Frappuccino® and get another free Hojicha Frappuccino®” for their customers at the drive-thru window. Besides that, Starbucks also offers half-price Frappuccino® blended beverages on happy hours from 5.00p.m. to 7.00p.m.. However, they limited on Wednesday for customers have Starbucks Cards and on Friday for everyone.

Customer Development

Customer development is the process of increasing the value of retained customers. Companies usually try to cross-sell and up-sell products into the customer base while still having regard for the satisfaction of the customer. Cross-selling is selling additional products and services to a current customer. Up-selling is selling higher priced or higher margin products and services to a current customer. (Buttle, 2009)

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Starbucks are used the cross-selling to fulfill additional products and services for their customers. Starbucks are selling coffee in packs, tea, coffee press, coffee brewer, unique mug, tumbler, and etc. For example, customers can be used the coffee brewer to brewed coffee at home. Customers also can buy the recycled tumbler to take away a coffee and can encourage eco-friendly. Furthermore, customers can buy unique mug or tumbler to gift their friend and family when a special day.

Starbucks also adopted customer relationship management technologies for customer development purposes. Starbucks used data mining in the customer development. Data mining is transactional histories record what customers have already bought (Buttle, 2009). Data mining can tell you the probability of a customer buying any other products (propensity to buy), based on their transactional history or demographic or psychographic profile (Buttle, 2009).

Starbucks are using the data mining to track the transnational histories record for determine customer preferences that have already purchase coffee. Therefore, Starbucks can base on demographic or psychographic profile or transactional history to know the customers well. Based on this information, Starbucks can easily segment their market and target to single customer. In addition, Starbucks also can easily predict their sales volume and number of materials used for brewed coffee. Thus, Starbucks will not easily encounter budget shortfalls and shortage of materials.

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