Usually, customer loyalty programs provide the best redemption offers for the biggest spenders. Starbucks, however, is taking a different tack. This contrasts with airlines, hotels, and others, that lavish their highest revenue generating customers with an almost endless array of freebies, preferential status, and more personalized recognition. Starbucks states that its recently revised rewards system is framed to pull in less frequent customers. The program is now designed to offer lower level rewards such as a bakery item or espresso shot for less points than before. Whereas, handcrafted beverages and sandwiches now require more points than previously. So will this convert casual customers to become Starbucks regulars? Time will tell. For sure, Starbucks will be scrutinizing the buying patterns and spending trends to see how well this new rewards program percolates with customers.
A Business Insider article discusses more on this topic which is excerpted below.
- Starbucksfaced backlash when it launched its new rewards program earlier in April, with some of its most loyal customers complaining about changes.
- Roz Brewer, the president of Starbucks’ US business, said that that the changes aim to make the rewards program more accessible, as Starbucks tries to win over less frequent customers.
- Brewer also said that the volume of calls Starbucks has received regarding the changes is lower than the company expected.
Starbucks’ new rewards program has been controversial among some of the chain’s biggest fans.
In mid-April, Starbucks debuted a new program in which members no longer had to reach a certain benchmark to become a “gold” member, eligible to earn rewards. Under the new tiered rewards system, customers can get rewards more quickly, with the option to make minor customizations for free in exchange for 25 stars.
Overview by Raymond Pucci, Director, Merchant Service at Mercator Advisory Group
