Shifts in Loyalty Programs

Starbucks makes a switch to its loyalty program, which franchisors should pay attention to

SPONSOREDUpdated 9:09AM • 02/26/16

According to a recent story by the Associated Press, Starbucks is going to make changes to its loyalty program, which is causing ripples among its customers and across the industry. Essentially, Starbucks customers currently earn a star for each transaction, regardless of how much they spend. That’s about to change. In April, the iconic coffee house will switch to a loyalty program based on how much customers spend.

If you’re a doppio espresso drinker like me, that might be bad news. As one of the least expensive coffee drinks on the menu, ordering my usual will not earn me as many points as drinking a latte or other specialty beverages. According to the AP report, guest will now have to earn 125 stars for a free item, with each dollar spent being worth two stars – meaning you’ll need to spend $62.50 to earn a free item. I’m going to have to drink a lot of doppio espressos to reach that mark.

While some customers are upset and taking their complaints to Twitter and other social media platforms, Starbucks, and many fast casual restaurant and franchise brands for that matter, have made this switch to their loyalty programs to reward both frequency and total purchase.

Starbucks and other brands see the old system as flawed because it can lead to customers buying multiple things via separate transactions just to rack up points.

How is your franchise system set up for customer loyalty? Starbucks’ shift to their new model gives us a lot to think about.

To view the original story, click here.