Will dollar-based rewards boost Starbucks’ loyalty program numbers?
Starbucks is making a change to how it doles out rewards for its loyalty program. Instead of issuing a star for every visit, the coffee giant will now reward its card members with two stars for every dollar spent at locations in the U.S., Canada and Puerto Rico.
The new program, which will begin in April, will provide a free drink or food reward for Gold members who earn 125 stars. (It will now take 300 stars to earn Gold status versus 30 visits before.)
Because the average customer spends a little over $5 when they visit Starbucks, they would need to make about 12-and-a-half trips to earn a freebie. It could turn out to be fewer trips if they visit a Starbucks on new monthly double-star days.
While “My Starbucks Rewards” has been credited with helping to grow the chain’s business, the goal of the new program, which will be simply called “Starbucks Rewards,” is to increase the number of members.
According to The Seattle Times, the 11 million members of “My Starbucks Rewards” currently spend about three times more with the chain than non-members. Fewer than one-in-six visitors to its shops in the U.S. are members of the Starbucks program.
In a company blog post, Aimee Johnson, senior vice president, customer relationship management at Starbucks, wrote that the change to dollar-based rewards was the number one request the company received from its customers.
Ms. Johnson promised that the announced changes to Starbucks’ loyalty program are “just the beginning” and the company would share “updates and ideas on how we plan to make our rewards program even more rewarding for all members in the near future.”
- Starbucks loyalty program will now be based on dollars spent – USA Today
- Starbucks shifts rewards program to count dollars, not visits – The Seattle Times (tiered sub.)
- Coming Soon: More Stars Through Starbucks Rewards – Starbucks
- Your #1 Request Will Soon Be a Reality – Starbucks
DISCUSSION QUESTIONS: Will the changes in how Starbucks rewards its customers lead to an increase in its loyalty program membership numbers? What do you see as the pros and cons of the “Starbucks Rewards” program?