I was pleasantly surprised with a promotion from Starbucks, the Starbucks Treat Receipt. If you buy any beverage before 2:00 pm, you can use the receipt to get any grande iced beverage for $2.00! Now, I’m a pretty avid Starbucks fan, so discounts are always appreciated. Of course, encountering any promotion always makes me wonder about redemption rates and the increase in sales. With a survey of one (me), I decided to do a little analysis on this Treat Receipt.
Normally, my husband and I stop in at Starbucks on Sunday mornings. Let’s take a look at how the Treat Receipt has affected our behavior:
Before Treat Receipt: $8 spent in the morning
We each purchase a beverage and one or two pastries, making our average ticket about $8.00. We normally make this trip one time on Sunday, so our daily total remains at $8.00.
First Treat Receipt: $8 purchase in the morning + $2 purchase in the afternoon = $10
We received our first Treat Receipt with our normal morning purchase. We were excited to use the receipt, so we made an additional trip on Sunday afternoon, increasing our daily total by $2.00.
Second Treat Receipt: $5 purchase in the morning + $2 purchase in the afternoon = $7
However, after learning about the Treat Receipt, we changed our behavior. Instead of purchasing two separate beverages, we shared a single large beverage, thus decreasing our normal morning total by $3.00. We then utilized the promotion in the afternoon, which decreased our daily total by $1.00.
I wonder how often people change their morning purchase based on their plans to take advantage of the promotion? I also wonder how many people already frequent Starbucks more than once a day and thus decrease their daily totals by utilizing the promotion? I’m sure the marketing gurus at headquarters have numbers to answer these questions. Average ticket amounts and cannibalization are important factors to consider when offering promotions to core customers. Clearly, the second scenario described above is the goal of the promotion. As I said, I only have a single data point, so my conclusions may be way off-base.
On the other hand, what if the goal isn’t to increase the average ticket over the summer? There are many other qualitative goals that may yield future value. For example, I might not be willing to spend $5 on a beverage I’ve never tried. The Treat Receipt is a low-risk way for me to sample a drink that may become my favorite. The promotion could result in me increasing my average ticket in the future by getting me hooked on something new (and more expensive). The promotion goal may be to increase brand loyalty through more touch points. Each time I visit the store, Starbucks gains more face time, which builds trust and credibility. The more experiences I have, the more likely I am to have a good experience.
With no numbers to back me up, I guess I’ll be content to ponder… with my grande Java Chip frappucino, of course!