The new Starbucks loyalty program is likely to be met with mixed reviews.
Loyalty programs are a key driver of repeat business for a number of businesses, and Starbucks has recently made some big changes in its loyalty program.
A new report from Forbes has indicated that Starbucks came to the decision to make changes to its popular loyalty program in response to the evolving needs of customers, but it seems impossible for the company to appease all of its customers. Now, the Starbucks loyalty program bases its reward system on dollars spent rather than number of purchases.
Logically this move should benefit the company in the long run, but the change has produced some disgruntled customers. Previously, customers would receive one star per purchase, regardless of the dollar amount of number of beverages, but with the new program, those who spend more will reap a greater reward.
The new program is good news for those purchasing multiple drinks for office parties or treating friends to a cup of joe, but the new system makes it a bit more difficult for customers who are only buying for themselves to earn their free items.
Forbes reported that instead of earning 12 stars and receiving a free item, customers now need to earn 125 stars to earn a reward. Through the new system, every dollar spent now earns each customer two stars.
The new program, which will be beneficial to the big spenders will have a negative impact on those who do not spend much per visit. It will now take those who only spend a few dollars per visit more than double the number of visits to reach gold status and earn their free items.
Overall, the program should help drive higher spending and make the big spenders happy, and those who feel slighted by the change will likely be forgiving. Also, the new program may encourage big spenders to make more purchases, which will counter any loss of disgruntled customers.