Starbucks has now had its rewards program since 2009, though the coffeehouse chain has retooled it numerous times over the years.
Super-loyal customers who use Starbucks’ membership program account for about 40% of sales at the company’s US stores. Now Starbucks is taking steps it believes will make the program more attractive.
Starting on April 16, the coffee company’s rewards members in the United States and Canada will start earning rewards sooner and have more options when redeeming points. For customers who use a Starbucks rewards credit or debit card, points won’t expire. (They still expire after about six months for other members.)
Digital rewards programs are a way for companies such as Starbucks to increase loyalty and learn more about their customers. The update is designed to bring even more people into the program by offering more choice.
The current rewards program works like this: Customers get two points, or stars, for every dollar they spend. Customers need to hit 300 stars within one year in order to start qualifying for rewards. Once they qualify, they can get a free drink or free food for every 125 stars. If they hold on to the points until they reach, say, 250, they can redeem the points for two free drinks, two food items or one of each.
The new system lets people get different rewards for different amounts of stars, and starts at a lower tier. Members can cash in 25 stars for an extra espresso shot, dairy substitute or another flavor pump. For 50, they get coffee or tea or a bakery item, and so on.
More flexibility can serve more types of customer behaviors, Matthew Ryan, the company’s chief marketing officer, told CNN Business.
“There are people who like to spend at very low levels, and there are people who like to hoard a lot of points,” Ryan said. “Right now, we have just the middle point of the range.”
Other companies are getting creative with their own loyalty programs.
Chipotle, which announced its first national rewards program last week, gave out cash on Venmo to share the news. And Burger King announced a $5 per month subscription service that gives members a free cup of small hot brewed coffee a day.
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Article Courtesy of CNN and WEWS News 5 Cleveland
First Picture Courtesy of Alex Wong
Second Picture Courtesy of Andrew Francis Wallace/Toronto Star and Getty Images