The Power of Data: Understanding Starbucks’ Customer Demographics to Drive Business Decisions
As a data analyst for Starbucks London, I was tasked with analyzing a survey dataset to understand the customer base demographics, enhance customer retention, and acquisition efforts to generate more revenue. Based on my analysis, I derived insightful information that can help Starbucks make more informed decisions and boost revenue.
Firstly, I found that customers in their 20s (Gen-Zs) make up the majority of Starbucks’ income, with male customers earning more than female customers. To encourage them to buy more products, Starbucks could create a conducive ambiance for date hangouts, run ads that promote Starbucks as a place for catching up with friends or discussing business ideas. This age group mostly buys coffee, with male customers being the most significant consumers. Therefore, Starbucks could focus on ads that emphasize how coffee boosts work productivity and inevitably leads to career growth.
Secondly, cold drinks are another popular product mostly purchased by female students. The majority of them prefer to do a takeaway than to eat in. Starbucks can leverage this information by targeting female students in their ads and promotions.
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Thirdly, the female gender in their 20s is Starbucks’ most loyal ambassadors, with most of them indicating that they are most likely to tell their friends about Starbucks. Starbucks can capitalize on this by offering discounts to female customers when they visit, giving them discount codes to get their favorite drinks when they bring a friend or running ads that promote female hangouts and dates at their stores.
Moreover, On the Customer Acquisition bit of the analyses; in order to improve customer acquisition, Starbucks could consider targeting potential customers who are not currently within their customer base. From the analysis, I found that customers above the age of 40 are significantly underrepresented in Starbucks’ customer base. This presents an opportunity for Starbucks to expand its reach to this demographic by creating targeted marketing campaigns and offering loyalty programs or discounts for this age group.
Additionally, it was discovered that the majority of customers in their 30s and 40s are employed and spend more than 30 minutes at the store. Starbucks could tailor its marketing efforts to these individuals by highlighting the benefits of a coffee break during a workday or offering promotions that cater to longer stays.
Customer Retention:
On the Customer Retention bit of the analysis, Starbucks can leverage the insights we obtained on customer demographics and preferences. For example, I found that female customers in their 20s are the most loyal ambassadors and are most likely to bring their friends to Starbucks. This presents an opportunity to create referral programs that incentivize these customers to bring more customers to Starbucks.
It was also discovered that the most popular product is coffee, and customers in their 20s make up the majority of coffee purchases. To retain these customers, Starbucks could offer promotions that cater specifically to coffee purchases or launch new coffee flavors that appeal to this demographic.
The analysis further revealed that the social media platform is the most effective in reaching customers, particularly employed males in their 20s who prefer takeaway orders. Starbucks could allocate more resources towards social media marketing to reach this target audience and create ads that promote takeaway orders or highlight the convenience of ordering through their mobile app.
Furthermore, to improve customer retention, Starbucks London can enhance its ambiance, especially for those who voted it as ‘Just There’. The analysis showed that this group is mostly composed of females in their 20s. To make the ambiance more attractive to Gen-Zs, Starbucks can focus on making it more appealing to this age group.
In conclusion, based on my analysis, Starbucks London can tap into its customer demographics to make more informed decisions and generate more revenue. By leveraging this data, Starbucks can tailor its marketing campaigns, and product offerings, and enhance customer retention and acquisition efforts, leading to a more profitable business.