Starbucks‘ new rewards program has the potential to turn their coffees and customers cold. The popular My Starbucks Rewards program in the US, which counts nearly 11.1 million members, is undergoing a drastic change with the rebranded “Starbucks Rewards”. The earlier program rewarded Starbucks’ customers with one star for each store visit, irrespective of how much the customers spend during the visit. The new rewards program goes completely against the previous version by awarding stars based on the amount spent during each visit.
Spend More To Earn Stars
Starbucks has maintained that the drastic change in the rewards program was based on customer feedback and that the current program allows its customers to receive the perks that is associated with the rewards program much quicker. But according to the responses in social media regarding this change, many customers complained that it takes a lot more money to receive the rewards from having a membership in the program. According to a few responses, a customer who used to spend $24 in 12 trips to the outlet to receive a free drink, will have to spend nearly $62 to get a free item from the menu.
Countering The Response
Starbucks countered this argument by noting that customers will attain rewards “stars” much quicker since there are other ways to get rewards apart from purchasing products from the outlets. In the new program, customers can receive these stars at the Starbucks and Teavana outlets, grocery stores selling Starbucks products, special offers through email subscription and also by referring a friend. Speaking about the change in its rewards program, Matthew Ryan, Starbucks Global Chief Strategy Officer, said that “the change was not a way to weaken Starbucks’ rewards program. The vast majority of Starbucks customers will earns rewards at the same pace they do today and the total percentage of revenue that Starbucks will provide as rewards will remain constant.”
Rewarding The Indian Customers
Although the rewards program will undergo a dramatic change from April in the US, the Starbucks rewards program in India is quite similar to the new one rolling out in all US outlets. The current rewards program in India awards 1 star for every INR 300 that the customer spends at the outlets with their Starbucks card. Earning 5 stars will put the customers in the Green category, which offers free drink on birthdays, beverage customisation, free “tall” drink on the purchase of 250 grams of whole bean coffee and a free size upgrade on featured drinks during the initial 2 weeks of the launch. Similarly, earning 25 stars within a period of 12 months will put the customer in the gold category and allow its customers to receive all the aforementioned benefits, and a personalised gold card, a free drink for every 10 stars and exclusive offers.
Although the rewards program in India is quite popular, the launch of the new rewards program in the US could affect the current system in India as well. Since the current program is quite similar, we are hoping there aren’t too many dramatic changes to the already perfectly functional program.