At least 75 million customers visit a Starbucks location every month, and 11 million people in the U.S. take advantage of Starbucks's rewards program. Today, the Seattle-based coffee chain announced sweeping changes to its longstanding program. Instead of earning a Starbucks "star" or point for each each purchase regardless of purchase amount, customers will earn two stars per dollar spent. The changes will go into full effect this April.
Additionally, Starbucks is looking into adding partners to its rewards program, which it first introduced in 2009. Though it is not ready to announce any official partnerships at this time, company reps mentioned that its current in-app partnerships with Lyft, Spotify, and the New York Times could be folded into its rewards program at a later date, meaning, perhaps, that a monthly subscription to the Times could lead to freebies from Starbucks.
Customers who have been using Starbucks's rewards program for the past few years have been able to earn a freebie after 12 visits, regardless of what they purchased each time. The system therefore slightly benefited those who purchased a small/tall coffee and opted for a fancier free drink on the 13th visit. Anyone that was spending $5 (or less) per visit will no longer benefit from the new system, as the AP notes. Now, people will have to spend a minimum of $62.50 — or earn 125 stars — before getting their first free item.
Patrons who have been ordering drinks that cost less than $3 a piece (lemonade, tea, drip coffee, hot chocolate) would currently earn a freebie after spending $36 or less over 12 visits. They now have to spend about double that amount before they're entitled to a free drink.
One change that Starbucks says will streamline its ordering process is that customers won't be asking their baristas to ring up items separately in an effort to rack up rewards more quickly. (The new way to game the system is to pay for your friends' drinks and have them pay you back in cash or via Venmo.)
Starbucks has also made it easier for loyal customers to earn Gold Status, and to maintain it. Once users spend $150 they'll maintain Gold Status for a year. On a call this morning, execs said they believed the system would be beneficial to customers overall and that it was consumers' "number 1 most requested change to the rewards program."
The changes are indeed expected to benefit some consumers and, over time increase same store sales. If consumers don't pay attention to the dollars — and there's plenty of reason to believe they don't — and instead look for the stars, the incentive to rack up stars will increase store sales. According to Starbucks's Chief Strategy Officer Matthew Ryan, the company crunched the numbers and believes only "a small minority" of rewards customers will earn freebies at a slower rate, and said, "We are not using this reconfiguration to reduce rewards. The vast majority of our customers will earn rewards just as fast or faster than they do today." Still, it's clear that Starbucks's big new announcement favors those who like their drinks frothy and grande.
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