More Than Just a Latte: How Starbucks increases their Average Order Value

More Than Just a Latte: How Starbucks increases their Average Order Value
Arun Patel

Arun Patel

May 4 2023

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You won't believe how Sharon became a regular at Starbucks! She started exploring the menu and tried out new drinks. Soon, she found herself enjoying the loyalty program, which increases average order value (AOV).

I loved hearing my friend Sharon's story, and I thought I'd share it with you. She's a real coffee lover, and every single morning on her way to work, she makes a pit stop at the Starbucks near her office to grab a delicious latte and a pastry. Who could blame her, right?

Over time, she became more and more interested in trying new drinks and exploring the Starbucks menu. She was intrigued by the wide range of specialty drinks and food items on offer, and she found herself spending more money at Starbucks each week.

One day, a friendly seller at Starbucks told Sharon about the company's loyalty program. She was super excited to find out that she could earn free drinks and food items simply by using her Starbucks card to make purchases. Without hesitation, Sharon signed up for the program and began using it every time she visited Starbucks.

As Sharon kept exploring the menu and sampling new drinks, she began to realize that she was spending a bit more money at Starbucks than she used to. However, she didn't really mind - she was really enjoying the high-quality products and the personalized service, and it made her feel like a truly valued customer.

Over time, Sharon became a regular at her local Starbucks. She would often stop by for a mid-afternoon pick-me-up or a weekend treat, and she always made sure to use her loyalty card to earn points and rewards.

Sharon not only treated herself to delicious drinks and treats but also earned more rewards points and moved up the loyalty program tiers, making her a valuable customer. Now during each visit, she found herself adding more items to her order. As a result, her average order value began to increase.

VIP pricing and customer-based pricing can increase the average order value (AOV) of your Shopify store in a few ways. This can help increase your profit margins in the following ways:

  1. Incentivizing larger purchases: It reminds me of Sharon's experience, which was amazing. One way we can encourage larger purchases is by offering VIP pricing and loyalty programs. That way, customers who spend more money can get discounts or rewards and take advantage of the benefits. I think it's worth exploring Rewarding your loyal customers with custom-based pricing for your customers.
  2. Offering exclusive products or services: If you want to encourage your loyal customers to spend more money, a great way to do it is by offering exclusive products or services from your online store that are not available to everyone. This way, your VIP customers will feel special and valued, which can encourage them to spend more to gain access to these special offerings.
  3. Providing personalized recommendations: Customer loyalty programs can actually collect data on a customer's past purchases and then use that information to provide personalized recommendations for products or services that I think you might like. We're pretty sure that this could lead to increased spending on the things that you're actually interested in.
  4. Building trust and brand loyalty: I believe that it is great when businesses offer benefits to loyal customers. This not only helps build trust but also increases brand loyalty. When customers feel valued and appreciated, they are more likely to make additional purchases and share their positive experiences with friends and family, just like Sharon.
Arun Patel

Author

Arun Patel

Arun Patel previously an e-commerce merchandiser, is passionate about increasing Average Order Value and spends time researching and writing about profitable tactics to increase AOV.