It’s mid-morning, and I have a steaming, delicious Yeti thermos near-full of homebrewed Walla Walla Roastery Brazil Condado Estate in my hot little hand. It’s my second caffeinated beverage of the day, so why am I craving a Cold Foam Cascara Cold Brew from Starbucks right now?

This email, that’s why:

The subject line? Congrats, you earned a free Reward.

The email? Beautiful in its simplicity, telling me why my next treat was on the house and how to go about redeeming it in store or when ordering ahead.

I went back in my Starbucks app history and counted 6 redeemed rewards so far this year. To earn a reward, I have to spend $62.50 (2 stars = $1 spent). That means that in half of a year, Starbucks has given me roughly $30 worth of free drinks or treats, and in exchange I have spent an eye-popping $375, give or take.

Starbucks isn’t a trailblazer in the customer loyalty space, nor are they necessarily the best at executing their rewards program. I remember my parents forking over a phone number to Safeway for rewards back before email was even a thing, and to this day I plug in our old home phone number when buying groceries for the extra $2 savings or the 10¢ per gallon discount on fuel. Airlines and credit card companies became besties when launching mileage programs, turning even anti-debt advocates like myself into “put it on the card” (and then pay it off fully every month) enthusiasts who use the purchases they make every day to fund adventures around the world. Clothing companies like Nordstrom and White House Black Market have implemented loyalty programs with tiered benefits based on how much you spend, making me that much more likely to splurge on those new boots or that summer-perfect sundress. I can even earn free Shutterfly prints for buying my kids diapers and wipes.

In many instances, I am being rewarded for purchases I would already make, but in some cases, I’m actually being influenced to purchase from one company over another solely on the rewards program they offer.

In exchange, I’m given varying degrees of extra love by businesses of all shapes and sizes. And these companies are slowly, quasi-secretly amassing a veritable mountain of data about me, what I buy, when I buy it, and how much of it I’m willing to buy. They’re then using that data to influence my purchases in the future.

With my Starbucks Rewards, I receive “double star days”. Those double star days are rarely on a weekend, but rather are designed to get me in the doors on a Tuesday or Wednesday when my prevailingly frugal self might prevail over my “treat myself on the weekend” or “I deserve a pick me up on the first workday of the week” mentality. I get bonus stars if I buy certain combinations of items, making me more prone to trying a featured pastry or a new beverage on the menu. I even earn bonus stars if I rack up a streak of visiting three, five, or seven days in a row, which I take as a badge of honor more than an indictment of my at-home brewing skills. Not only is Starbucks keeping track of what I buy and when, they can help me spend just that much more, that much more frequently. They are creating a very personalized and targeted path for me to become significantly more valuable to them as a customer, and yet I feel like I’m the winner.

Starbucks has turned my morning latte into much more than a coffee stop: they’ve made it into a game.

Rewards programs are terrific for the customer AND for the business. Not only do rewards programs increase customer loyalty, the truly great rewards programs also increase the business’s ability to communicate with and market effectively to those customers. A well-structured rewards program can escort customers along their journey with a business in a more direct and tangible way for all parties involved, and along the way, empower the business with valuable data to increase their ability to understand and effectively communicate with customers through all touch points. WIN!

Considering a rewards program for your business? Ask yourself the following:

What is my goal?
Do you want to simply retain the customers you already have by rewarding them for their loyalty? Do you want to increase your overall customer value? Are you looking for additional data on your customers that a rewards program can help you capture? Starting with the goal in mind is imperative, or you might find yourself simply rewarding customers for behavior they already exhibit, and not getting much in the way of tangible return.

What would motivate and delight my customers?
This could be as simple as price incentives or a free bonus after a certain number of visits. You could also reward customers with access to members-only perks and experiences. Start by polling some of your best customers (formally or informally) to see what they already find special about you, and build your rewards around the things that set you apart from the competition.

What do I need to implement this program?
You might need to invest in a new technology, or spend some time and energy learning how to use a tool within a software you already pay for. Small-business tools like Square offer integrated rewards programs for a monthly fee, while businesses like Hatch Loyalty integrate to any systems you’re already using. Take a look within the tools you’re already using to see if there is hidden opportunity, before you start researching add-on services.

You’ll also want to consider how this will be rolled out to your staff and customers. Do you want to start with a small pilot of top customers first, or implement to your entire customer base off the bat?

Asking these practical questions in advance will ensure that you hit the ground running and minimize both your customers’ and your employees’ confusion*.
*Confusion, I’ve found, is not synonymous with customer or employee delight.

How will I know if this is working?
Identifying a key metric (or two, or three) for measuring success is also imperative! Knowing whether your loyalty rewards program is actually driving the metrics you’ve identified as indicators of success will help you optimize and improve the program, pivot if necessary, and ensure that the investment is paying off. Set benchmarks, ensure you have systems in place for tracking, and keep score to see if you’re winning! If your goal is repeat visits, you could track average visit per customer over time. If your goal is increased customer value, you could track rewards value against all other customers to see what the difference is. As you start to see the programs working, you’ll be motivated to increase the emphasis on the program even more (thereby game-ifying the very gamification you’ve implemented for your customers… hello, full circle!).

At the end of the day, even the most innovative and well-designed rewards program will only be as good as a business’s ability to regularly over deliver on customer expectations.

After all, the $375 I have spent at Starbucks in just under half of a year could fund both my husband and my daily at-home brewed coffee for that same amount of time.

If the coffee was garbage, or the customer service was lousy, if the ambience at my local Starbucks or the speed of service in the just-off-the-highway drive thru was anything less than exceptional, I probably would say that I was throwing money away. But I have a great experience 99% of the time when I visit a Starbucks. I get a staycation-style morning stop with my hubby and kids, 2 hours of “free” office space and WiFi to bang out that blog post, a “coffee date” with my four-year-old son on the way to the grocery store… plus I’m caffeinated, and that’s not a bad thing. From time to time, that visit is motivated by the additional incentive of a “streak” I might be wanting to complete, or double stars, or a new beverage to try, making my coffee-buying experience that much more fun. Best of all, I receive information from Starbucks about experiences or products that I want to try, and never feel like I’m being interrupted by their marketing because it is relevant to me.

What rewards programs are you a part of? What do you find most rewarding about them? What could be better? Now, look at your own business. Do you already have a rewards program, or are you considering one? What are a few elements of your “secret sauce” that might make a good foundation for a customer loyalty program? How could you gamify the purchase of your product or service with your customers?

I’d love to hear from you, either in the comments below or via email, if you’re shy about an open dialogue!