Friday, April 12, 2024

Starbucks Revamps Loyalty Program To Count Dollars Spent, Not Number Of Visits

Starbucks

The new Starbucks Rewards program will count the dollars that customers spend instead of the number of transactions in giving out stars that can be collected for a free food item or drink. Low spenders are not welcoming the change, which will highly benefit customers that spend more.

Starbucks is revamping its loyalty program to make it easier for big spenders to gain rewards, as the new program will now be counting the dollars spent by customers as opposed to the number of times they have visited.

In the current My Starbucks Rewards program, customers earn stars for every transaction they make in Starbucks, regardless of the amount they spent. After accumulating 12 stars, customers are entitled to a free drink or food item of their choice.

Beginning April, Starbucks will be awarding stars to customers based on how much they spend in the store. In the renamed Starbucks Rewards program, every dollar that they spend will net the customer two stars, and a free drink or food item can be cashed in after collecting 125 stars. This would mean that, under the new program, customers will have to spend $62.50 to get their reward.

Customers who are low spenders, such as those who usually only purchase the $2 regular drip coffee, are getting the short end of the stick in the new program. They will now need to make more than 30 visits to Starbucks before they get their free drink or food item, as opposed to the current program that allows them to get their reward after only spending $24 over 12 visits.

On the other hand, customers who regularly purchase drinks and food items for their families or for team meetings, for example, will be able to accumulate enough stars for rewards faster and more often.

According to Starbucks, there are 11 million members of the company's loyalty program, with each member spending three times as much on average compared to non-members. The number of members is less than one out of every six Starbucks customers though, which is a rate that is lower compared to other companies with similar programs in other industries.

Starbucks chief strategy officer Matthew Ryan said that the change in the program is the most requested one, and is being depended upon to entice more customers to join Starbucks Rewards.

With all that said, the company is still facing some backlash on social media due to the new program. Understandably, loyal Starbucks customers that are not big spenders are unhappy about the change.

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