Why Starbucks is keen on expanding its loyalty partnership with TD

The QSR aims to bring "millions" of potential new members into its Rewards program.

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Starbucks and TD Bank are enhancing their loyalty partnership.

Millions of TD cardholders in Canada can now earn earn 50% more Stars (the points earned through the Starbucks app), TD Rewards or Aeroplan points with purchases made through the Starbucks app when they link it to a TD debit or credit card. TD clients also have the option of converting TD Rewards points into an equivalent amount of Stars.

The move builds on a partnership first announced in 2020, which offered rewards only to TD Aeroplan credit card holders. Starbucks is also building on other recently expanded loyalty initiatives, like with Air Canada’s Aeroplan program.

Peter Furnish, VP of marketing and digital experience at Starbucks Canada, says what it is launching with TD is an evolution of the mechanism that was already in place. The first step was linking two accounts together and giving members shared benefits from both programs.

This next step is allowing even more customers, namely those without a credit card, to earn Stars and TD Points, as well as offering the points conversion ability in real time.

“We’re the first Starbucks market that’s doing this globally,” Furnish says. “We have a lot of customers who are also TD Members, but there are a lot of TD credit and debit card holders we want to invite into Starbucks Rewards.”

Discussions with TD began three years ago, and it took a while to get the infrastructure together.

“We are hoping to continue to expand the program,” he says, and it helps deepen the customer relationship.

Starbucks is getting the word out through its membership ecosystem and through in-store signage. On the TD side, there is significant in-branch and online marketing. Both parties are “stepping up,” Furnish says, describing the promotion strategy as a “marathon and not a sprint,” and will likely included future paid digital components. Starbucks’ internal Studio will be leveraged for promotion, as well as agencies Public Office and Spark.

The QSR cites a Loyalty Trends report revealing that 47% of consumers believe reward incentives are more important now than they were pre-pandemic, with Gen Z and young millennials valuing loyalty programs the most, particularly when it comes to more options for how they pay, earn and redeem.

Starbucks has been seeing its own positive signs in the loyalty space, and Furnish says its user acquisition approach has been “turbo charged.” Coming out of the pandemic, Furnish says Starbucks has been seeing more rewards customers coming into stores. Younger customers have higher usage frequency, he says, but there’s a wide swath of points earners demographically.