Why is the use of loyalty cards and surveys by Starbucks a good example of customer relationship management (CRM)?

Stephen Gillett, Starbucks CIO, argues that his most crucial duty is to enhance Starbucks' ability to mine its customer data to help "reignite our passion with our customers." Starbucks used loyalty cards (Starbucks' Reward cards) and surveys to track its customers' purchases and build profiles of their customers, as mentioned in the opening chapter vignette.

Starbucks uses its loyalty cards and surveys to understand customers and their behaviors, which is an example of effective Customer Relationship Management. This information helps Starbucks enhance customer relationships and improve sales.

Explanation:

This is a good example of Customer Relationship Management (CRM) because Stephen Gillett, the CIO of Starbucks, makes use of customer data to better understand and serve Starbucks' customers. Specifically, Starbucks utilises loyalty cards and surveys to track customer purchases, thereby building detailed profiles of their customer base. This information is instrumental in their ability to enhance customer relationships, improve customer retention, and increase sales and profitability. In essence, the use of data to understand customers, identify their preferences, and predict their future behavior is at the heart of CRM strategies.

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