This image below compares the current reward program and the new one that will begin in April. One notable change is that certain days throughout the month will provide double-stars.
Some My Starbucks Rewards members have criticized the current program because those customers that spend more and purchase 3 products are being just as rewarded as others that just buy one product. There are also flaws in the current system where some people buy three items and break it up into three transactions to get three stars. Starbucks noted that this was creating delays at the checkout.
Not only is this new program going to be more beneficial for the loyal customers but it will also allow the business to operate more efficiently.
When the Starbuck's reward program was launched it 2009, it was one of the most successful loyalty programs that has more than 11 million active members. The company says it increased the number of member by more than 50% over the last two years, and those 11 million members spend three times as much as nonmembers.
Starbucks believes that this new program will defiantly drive up sales because customers will spend more if they earn more.
http://www.nbcnews.com/business/business-news/starbucks-revamps-its-rewards-program-gives-stars-cash-not-visits-n523656
I think that as long as they don't increase the amount of stars needed to earn rewards, everyone will be very happy about the new changes. Since Starbucks is rather expensive, a simple cup of coffee will not generate 2-3 stars instead of only 1 star. This effect will be even greater for the die hard star bucks fans that spend close to $10 every time the go there. Now they'll earn 10 stars instead of 1. This is a fan friendly change, and it is the perfect example of why Starbucks has become so popular among fans in the last decade.
ReplyDeleteI agree with Samuel that people will continue to be happy with this as long as they do not increase the amount of stars needed to receive rewards. However, I do think the amount of time customers may spend in the checkout line with multiple products may serve to be an issue and frustration for customers. While I think this system will prove to be better for consumers in the long run, I think there are also some problems that will need to be ironed out before the program can be set in stone and run as efficiently as possible.
ReplyDeleteI think these rewards programs can be worse for consumers in the long run. Often these rewards programs can soften price competition. Starbucks can have more liberty to raise prices with consumers doing little to switch to a cheaper alternative, because they have "rewards" so they think ultimately they're getting a better deal by sticking with Starbucks. My assumption is that businesses don't run rewards programs because they want to benefit the customer, it's because it makes their business more profitable.
ReplyDeleteI am part of this Starbucks rewards program, and looking at the details it really seems like Starbucks is really doing itself a favor by doing this while claiming that it's based on the feedback of the consumers. For the majority of Starbucks customers, this new program will make it so that it takes much longer for them to receive any rewards, and only for a very small percentage of customers will this help them achieve rewards faster.
ReplyDeleteI think this is a smart move for Starbucks. Their new reward system focuses on how much money is spent, whereas the old reward system was focused on getting customers to visit more. This will possibly entice people to buy higher priced options as they will reach their Gold level much quicker. In an article posted on Bloomberg, they said that Starbucks Rewards members spend around three times as much as non member, but fewer than 1 in 6 customers that walk in belong to the program. Personally, I am not affected by this change as I am not a member of the rewards program or a regular customer, but it will be interesting to see how these changes work out for the company in the long run.
ReplyDeleteThis is a very good idea for increasing customers and increasing wealth. I don't know if they sell anything that is just around 1 dollar, but if there was something more than 50 cents, I would feel like I might as well buy something else just to spend a dollar to get those stars, so this will definitely help them increase sales.
ReplyDeleteBecause people make decisions based off incentives, it is important that businesses provides reward programs like Starbucks'. A business having a reward program makes it more likely that customers will give the store their business rather than another that doesn't have a reward program.
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