Customer behavioral analytics improves Starbird’s loyalty program performance
+15%
New customer segmentation and personalization strategies produced a 15% higher email open rate for Starbird compared to prior campaigns.
+14%
In the first year after implementation, Starbird achieved a 14% increase in loyalty transactions.
-24%
Loyalty transactions using a reward decreased 24% in the same time period, delivering better results while lowering program costs.
“Grant Thornton’s loyalty team uncovered insights that transformed our understanding of our loyalty program levers. Their recommendations were a key to accelerate our sales growth and improve customer engagement.”
At a glance
Client
Starbird
Industry
Restaurant
Our role
Improving loyalty program performance
Our solution
Understanding customer behavioral insights
Understanding loyalty program patterns keys clear win
Scenario
The loyalty program of Starbird, an emerging B2C fast-casual restaurant brand, was not meeting its goals. Costs were increasing but not achieving incremental results.
Approach
Applying our proprietary approach to customer and loyalty analytics provided insights into behaviors that led to a new segmentation method and personalization strategy.
Result
These strategies resulted in increased sales and customer engagement while reducing reward costs — a win for both brand growth and the marketing budget.
Scenario
Loyalty program adding costs, not customers
Starbird, a California-headquartered B2C fast-casual restaurant brand, had implemented a loyalty program to capture new customers and increase frequency and brand affinity as the brand grew. However, the loyalty program was not performing, and loyalty transactions were flat and starting to decline.
Loyalty-related costs were also increasing but not realizing incremental results, which is a challenge shared by many loyalty programs across consumer-based industries, including retail and hospitality. Starbird needed to understand the root causes of underperformance and how they could improve the results as they opened new locations.
Approach
Data dive leads to better customer insights
First, Grant Thornton’s loyalty strategy team, led by a former restaurant and retail CMO, conducted a deep dive into two years of Starbird’s loyalty transaction data to identify customer purchase patterns and trends within the loyalty program. The analysis revealed key challenges:
The vast majority of loyalty members (72%) had low-frequency patterns.
The top customers had high frequency variability, and the customers in the top 20% were regularly turning over.
Nearly 75% of rewards were not being redeemed.
Customer segmentations based on current frequency were not predictive of future purchase behavior.
Partnering with Starbird, the Grant Thornton team helped build a clear narrative to highlight customer insights and enable a transparent and shared understanding within the executive team of customer behavioral patterns and the key strategic opportunities to improve loyalty performance. This was key to building confidence and executive leadership buy-in for new strategies.
Finally, Grant Thornton provided a series of tailored recommendations to help Starbird move to a more customer-centric approach to the brand’s loyalty strategy, including a new customer segmentation approach and personalization strategies.
Result
Customer engagement, sales exceed expectations
Grant Thornton’s customer analytics team offered tailored customer analytics and recommendations that provided unexpected and invaluable insights into customer behaviors and buying propensities. Each of these spotlighted new opportunities for growth.
Acting on Grant Thornton’s customer insights and recommendations, Starbird’s marketing team made dramatic changes to the loyalty marketing strategies and approach. Email marketing using new customer segmentation and personalization strategies produced a 15% higher open rate than prior general campaigns and even performed significantly better than promotional offer emails.
More importantly, the solutions increased both customer engagement and sales while reducing the reward costs. These results were clear wins for both brand growth and the marketing budget, delivering greater loyalty program ROI. In the year following the implementation, the client achieved a 14% increase in loyalty transactions while reducing transactions with a reward by 24%.
- 14% increase in loyalty transactions
- 24% reduction in transactions with a reward
Content disclaimer
This Grant Thornton Advisors LLC content provides information and comments on current issues and developments. It is not a comprehensive analysis of the subject matter covered. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this content.
Grant Thornton Advisors LLC and its subsidiary entities are not licensed CPA firms.
For additional information on topics covered in this content, contact a Grant Thornton Advisors LLC professional.
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