Starbucks’ Revamped Loyalty Program Leaves Some Customers Seeing Stars

When it comes to building brand loyalty, Starbucks has been nothing short of inspirational, especially among retailers eager to capitalize on consumers’ adoption of mobile technology. As we explored in The Perfect Brew: the Mobile Starbucks Experience, the coffee company has hit on a winning formula for engaging customers—but will upcoming changes to their loyalty program take that engagement to the next level?

My Starbucks Rewards®: Today and Tomorrow

In a nutshell, customers enrolled in the their loyalty program earn “Stars” toward free drink or food rewards each time they visit a Starbucks or Teavana store or purchase select items at the grocery store. Members can also opt-in to receive My Starbucks Rewards emails and take advantage of custom offers, like early access to new products. And, of course, they enjoy easy payment with the mobile app.

According to Starbucks.com here’s how the My Starbucks Rewards of today stacks up next to the restructured program:

The biggest change is that come April, rewards will be based on dollars spent rather than on number of transactions.

Following Customer Demand?

It’s often said that “the customer is always right,” and in this case, Starbucks is counting on it. According the coffee company, customers themselves have requested this change via its “My Starbucks Idea” program—in fact, it’s the most requested update to the rewards program to date.

Yet, some vocal customers have had negative reactions. They say that the new program benefits customers who spend more, not those who favor simpler menu items; ultimately, customers have to spend more in order to earn a free drink.

In Starbucks’ defense, the new program structure is expected to boost efficiency in the stores. The company presently contends with customers who are asking for multiple transactions to boost their points—and it’s slowing down traffic at the register. Starbucks estimates these represent about 1% of all transactions.

Increasing Loyalty and Sales

Starbucks’ goal is to drive engagement with their My Starbucks Rewards program—to get more people to sign up and spend their dollars at Starbucks. At the end of the day, the company wants to drive store sales and profit. They hope the new program will motivate people to purchase food with their drink, for example, in order to earn more stars. They’re hoping to achieve a win-win.

USA Today reports that while Starbucks has close to 11 million people enrolled in their loyalty program, fewer than one in six of the coffee company’s more than 75 million monthly visitors are loyalty members. And since loyalty program members spend up to three times as much as nonmembers and visit more frequently, Starbucks has significant potential to attract more customers to the program.

Starbucks’ mobile solution has expertly combined brand-boosting loyalty program and payment functionality. By changing-up the way their loyalty program works—aiming to attract more consumers to the register, app-in-hand—the company will take their winning “formula” to a new level. Time will tell if that’s up, down, or sideways; regardless of the outcome, the industry is watching to see what happens after the new program launches in April.