How Starbucks successfully reinvented their loyalty program

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As a frequent Starbucks customer, I was one many who noticed the new rewards system that the brand launched in February. The only reason I noticed was because I saw it on the news, and not because it affected my copious and frequent consumption of the variety of Starbucks beverages.

I was interested in what the public had to say about the change so I checked out online to get a snapshot of the public opinion about the new loyalty program, as well as its performance. Did Starbucks customers defect in droves, or did they accept it?

Although plenty of people expressed outraged with the change, according to Yahoo Finance, “about 900,000 (16% increase) customers joined the company’s rewards program in the second quarter.”

It appears that by redesigning and re-tuning their existing rewards program, Starbucks is now able to be more selective in their customers, while giving more incentive to for a larger ring at the register.

Before the update, Starbucks rewards were based on frequency of purchase, meaning if someone bought four drinks and one sandwich from Starbucks, that only counted as one point. Now, Starbucks rewards are based on monetary value. It now costs roughly $300 to become a “gold member” and 125 stars after that to get a free drink or food item.

This translates to around $63 spent before getting a reward. Customers who visit Starbucks on a weekly basis, and order more than the Grande Dark Roast coffee, are not seeing much of a change in the program.

Starbucks happens to be my go-to coffee shop. The rewards are a great incentive, but I would still get my lattes from Starbucks regardless of if I got a free drink every few visits. In a consumer landscape driven by brand loyalty, I fully understand why Starbucks created a rewards program in the first place—and why they changed the program this year.

Customers like me flock to Starbucks, not because of a reward system, but because we are loyal to the brand. And now, Starbucks gives us an incentive to spend even more by rewarding us in an even more targeted fashion.

Starbucks is the front runner of coffee shops due to convenience, customer engagement, and, of course, great coffee. And, with a consumer-friendly app that allows customers to seamlessly add money to their accounts, pre-purchase their food and drink, and receive relevant information, Starbucks has once again reinvented the way people see the coffee break.

 

Rita Shapiro-Das
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Rita Shapiro-Das

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