Starbucks hires DraftFCB for CRM task as it battles to build loyalty

LONDON - Starbucks has hired DraftFCB in the US for direct marketing and CRM work on its loyalty cards as the coffee chain battles to retain market share against cheaper providers such as McDonald's.

It is not known whether Starbucks will extend the assignment to DraftFCB's sister agency in the UK.

The move comes as Starbucks announced plans to close 300 stores worldwide -- 200 in the United States -- and cut about 6,000 store jobs. The cutbacks come as people substitute frappuccinos for cheaper coffee at outlets such as McDonald's, who have successfully copied elements of the Starbucks experience.

With profits dropping 69 per cent in its fiscal first quarter to $64.3 million, Starbucks is focusing on customer retention. DraftFCB's brief is said to include Starbucks' main loyalty card, and cards that promote new product launches as well as the company's rewards, gold and Red cards.

The coffee giant unveiled a revised CRM programme last March, with boosted benefits such as a free beverage with purchases of coffee beans.

It is understood that DraftFCB suggested direct marketing ideas as part of a wider marketing review by the Seattle-based coffee chain. The agency's New York office will handle the business.

Starbucks plans to eliminate about 700 corporate jobs, including about 350 at its corporate headquarters in Seattle.

It is also considering branching into ‘value' breakfast deals that bundle drinks and food at a discounted price, in a similar vein to McDonald's and other food retailers.  

In another move to boost revenue, the US coffee shop giant announced in November that its 700 outlets in the UK and Ireland will only use Fairtrade coffee beans.

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