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I admit I don’t read my Starbucks e-mail, so I rudely became aware of how the coffee house behemoth changed, or downgraded, its rewards program. As a gold card member, I used to get a free “reward” drink or item for every 12 stars earned. A gold star plopped into your app cup every time you bought one item, whether a coffee or a cake pop, regardless of price.
Now, the rewards are based on money spent, with two points for every dollar. Earn 125 points, and you get your reward. That means you pay $62.50 for every freebie. For those of us who spent anywhere from $1.75 to $5.75 on our qualifying 12 coffees, that’s a bad deal. Theoretically, you could buy 12 “tall” drip coffees at $1.75 each, for a total of $21, and then get a venti quad latte worth $5.75 for free.
What’s more, my gold card status now expires next month, instead of May 2017 based on all the stars I had earned under the old reward system.
Again, these are First World problems, but I e-mailed Starbucks, “outraged.” I got a nice form letter in response, detailing the rewards program, stating, “The new Starbucks Rewards is designed to give equal value to all of our members. The new program will reward your frequency AND the products you buy. We understand it may now take some customers longer to earn a Reward.”
Did they really say that? Translation: “We gave you a privilege for years of high frequency loyalty and spending, but now we’re taking a lot if it back, including one year’s worth of gold status.”
It’s pointless to argue with Starbucks. The corporate giant works out all of its P&Ls and market projection data to the finest degree, so I’m sure they see additional profit, or fewer lost revenues. I’m not surprised a downscaled Rewards program comes from a company that now tries to sell mediocre wines at $9 to $11 per glass, and that's just for the less mediocre brands. The finer mediocre brands cost more.
Does Starbucks not realize you can likely find a better per-glass deal at multiple restaurants and bars within a three-mile radius in any urban or suburban area? Who would anyone buy a glass of wine at a Starbucks? Two-Buck Chuck smuggled in a used Starbucks cup would be a better deal. I’ve never even seen a glass being consumed at a local one that offers a wine menu. I can’t picture a group of five co-workers enjoying a post 5 p.m. happy hour of wine at $45 to $55 per round. (My God, that’s 90 to 110 stars!)
While Starbucks sees revenue growth, here’s what I saw one day after this discovery: Diagonally across the street from a Starbucks I regularly visit in Los Angeles on weekends, a new Dunkin' Donuts has opened. I look forward to switching from Starbucks brew to the smoother Dunkin’ one and swapping out my cake pops for donuts. Look! Watch me promote their website: DUNKIN' DONUTS
The point here is if you offer your clients rewards, discounts, privileges, benefits, extra amenities and/or perks as part of a continuing arrangement, don’t cheap out and dilute it. At least, clearly state at the beginning it’s a “limited time offer,” with a specific end date. Better yet, keep rewards membership constant.
So if you can’t maintain satisfaction in a long-term customer relationship, then you shouldn’t be pursuing one in the first place. You owe your clients respect, honesty and consistency. Competing providers once dismissed can start looking real good, real fast. Customers get mad when they realize you're just not that into them, and sure as hell won’t want to take your product anymore.
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