Hooked Model for Starbucks



Overview

Could anything be better than writing a case study about your favourite product?! Definitely not. I am a big Java junkie. Starbucks plays a significant role not only in my life but in other people's lives also. It's a go-to destination for quality coffee and a comfortable gathering place.

Before diving into the how Starbucks is implementing the Hooked Model, Let's know a little bit about it's history and over the years progress.


History

Starbucks was founded in Seattle, Washington in 1971 by three partners - Jerry Baldwin, Zev Siegl, and Gordon Bowker. The three were inspired to start a coffee business after learning about the high-quality coffee beans being produced in the city of Peet's Coffee in Berkeley, California.

The partners purchased coffee beans from Peet's Coffee and began roasting and selling them in a small store in Seattle's Pike Place Market. They named their business "Starbucks," after the first mate in Herman Melville's novel Moby-Dick.

At first, Starbucks sold only whole bean coffee and did not brew coffee to drink in the store. However, the popularity of their high-quality coffee beans quickly grew, and in 1982, the company opened its first cafe in downtown Seattle. The cafe offered a variety of coffee drinks and pastries, and it quickly became a popular gathering place for locals.

Over the years, Starbucks continued to expand its menu and opened new locations throughout the United States and eventually globally. Today, Starbucks is one of the largest coffee chains in the world, with more than 32,000 stores in 83 countries.


21st Century

The Starbucks of the 21st century is quite different from the Starbucks of the 1990s in several ways. Overall, while the core of the Starbucks brand remains the same - high-quality coffee and a comfortable gathering place - the company has evolved to meet the changing needs and preferences of its customers in the 21st century. Here are a few key differences:

  • Store Design: In the 90s, Starbucks stores had a rustic, coffeehouse vibe, with lots of natural wood and subdued lighting. Today, Starbucks stores are more modern and sleek, with bright lighting, digital menu boards, and comfortable seating areas designed for socializing and working.
  • Menu Offerings: In the 90s, Starbucks offered a limited menu of coffee beverages and pastries. Today, the menu has expanded to include a wide variety of drinks, food items, and merchandise, including seasonal specials and limited-time offerings.
  • Digital Presence: In the 90s, Starbucks had a basic website and no social media presence. Today, Starbucks has a robust online and social media presence, with a mobile app that allows customers to order and pay for their drinks ahead of time, earn rewards, and access exclusive offers and promotions.
  • Sustainability: In the 21st century, Starbucks has made a commitment to sustainability, with initiatives such as using ethically sourced coffee beans, reducing waste through recycling and composting, and investing in renewable energy.

Aforementioned changes came with time but the significant change was it's app. The Starbucks app was first launched in January 2011 for iPhone users in the United States. The initial version of the app allowed customers to manage their Starbucks Rewards account, pay with their mobile device, and locate nearby stores.

Since then, the Starbucks app has gone through several updates and enhancements, adding new features such as the ability to order ahead for pickup, track rewards and offers, and send gift cards to friends and family. The app has also expanded to other platforms, including Android and web browsers, and has been launched in various countries around the world.

The launch of the Starbucks app was a significant step for the company in embracing digital technology and leveraging it to enhance the customer experience. The app has since become a key part of the Starbucks ecosystem, driving customer engagement and loyalty while also providing valuable data insights to the company.


Implementation

The Starbucks app is an excellent example of how a company can use the Hooked Model to create a habit-forming experience for its users. Here's how the app uses the four steps of the Hooked Model:

  1. Trigger: The trigger can be divided for two types of users. New user and an existing user. Here, we will be talking about existing users. There are several external triggers that can encourage existing users of the Starbucks app to continue using it. Some of these triggers include:
    • Push Notifications: Starbucks can send push notifications to users with personalized offers, rewards, or reminders to order ahead.
    • Seasonal Promotions: Starbucks runs seasonal promotions, such as holiday drinks or food items, that can encourage users to visit more often and use the app.
    • Social Media Advertising: Starbucks advertises promotions and offers on social media, which can reach existing app users and encourage them to continue using the app.
    • Email Campaigns: Starbucks can send targeted email campaigns to users with personalized offers or updates on new products or features within the app.
    • Location-Based Advertising: Starbucks can target users with location-based advertising, such as ads that appear on their mobile devices when they are near a Starbucks store, to remind them to use the app for mobile ordering or payment.
  2. Action: Once the user is triggered, they can take various actions within the app, such as ordering ahead, paying with their Starbucks Rewards card, or finding a nearby store.
  3. Reward: The Starbucks app uses several variable rewards to encourage users to engage with the app and the Starbucks brand. Some examples of variable rewards in the Starbucks app include:
    • Stars and Rewards: Users earn stars for every purchase made through the app, and stars can be redeemed for rewards such as free drinks or food items. The number of stars required to earn a reward varies, creating a sense of anticipation and surprise.
    • Personalized Offers: The app provides personalized offers and promotions based on users' previous orders and preferences. These offers may include discounts, bonus stars, or special promotions, creating a sense of exclusivity and reward for using the app.
    • Order Ahead Convenience: The ability to order ahead for pickup through the app saves users time and effort, creating a feeling of convenience and reward for using the app.
    • Gamification: The app sometimes includes games or challenges that users can participate in to earn bonus stars or rewards, creating a sense of fun and engagement.
  4. Investment: The user invests in the app by providing feedback, rating their experience, personalising their orders, or adding money to their Starbucks Rewards card to earn points towards future purchases.
    By investing in the Starbucks app and participating in the rewards program, users can enjoy a more convenient, personalized, and rewarding experience when ordering from Starbucks.