Starbucks built its coffee flavored empire by doing things differently to most coffee shops. Now it's changing its rewards program to look more like what everyone else offers. Is it a smart move or will it alienate small spenders?
The new rewards program, known as Starbucks Rewards, will replace My Starbucks Rewards in April. Starbucks customers can look forward to 2 stars per $1 spend and monthly double-star days. That means the more you spend, the more stars you can accumulate.
Today, you get 1 Star every time you make a purchase at Starbucks, no matter how little or how much you spend. With nearly everything at Starbucks costing well over a dollar, you will probably earn a lot more Stars for your sips. But it isn't all good news.
Right now, you can achieve the Gold customer status, which entitles you to a lot of special offers, by collecting just 30 Stars per year. After the switch, you'll have to collect 300 Stars to get the same benefit.
If you as a Gold member go to a Starbucks before the new program takes effect, you can redeem just 12 Stars for a free reward. In other words, every 12 visits to a Starbucks gets you a free drink. After My Starbucks Rewards is trimmed down to Starbucks Rewards, you'll have to bring in a proud 125 Stars to get that free reward.
What does this mean for you? If you are the type of customer that visits Starbuck on a Saturday afternoon and goes all out, you'll likely leave with a full stomach and a lot of Stars. In my opinion, most Starbucks customers will come out with a lot more Stars, if not actual freebies.
But there are also the other type of Starbucks customers: students, bookworms, freelancers, special interest groups and retired people for whom Starbucks provides a low-cost venue for social meet-ups, reading, working or chilled studies. And this type of customer, which typically orders a coffee or two during their visit, will have to wait a lot longer for that free reward or Gold status. The days of collecting two freebies per month on a daily coffee budget are drawing to a close.
The end of the 1 Star per purchase era marks a move away from Starbucks somewhat radical approach to earning rewards (based on visits) and puts the Starbucks rewards program in the same playing field as those offered by most other merchants that give you rewards based on actual spending.
While some may consider this a natural shift coinciding with Starbucks' upgrade from a student hangout to a mainstream global restaurant chain, the new rewards program is likely to leave a large portion of Starbucks customers unimpressed.
Only time will tell if the no-pressure atmosphere that set Starbucks aside from its competitors and allowed someone like me to order a pumpkin spice latte and sit down to work will also go the way of freebies.
All we know for now is that Starbucks is looking to get more value out of its customers, and luckily for us, they're using rewards to entice that cash out of our wallets rather than bringing in the pesky servers found at other eateries to bully us into buying more.