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What We’d Like to See in a Starbucks Loyalty Program
Amid all of the hubbub out of Starbucks recently – Howard Schultz’s now famous memo on the “commoditization” of the coffee giant and his return as CEO – one fact has gone little noticed: Starbucks appears to be getting ready to start a loyalty program.
In an interview with Fortune Magazine’s Andy Serwer last month, Howie admitted that the company has become “less passionate about customer relationships” in recent years and promised that “we will do more things to better reward our most loyal and best customers.”
For the caffeine-addicted among us who carry tons of little cards around in our wallet trying to earn freebies, this is amazing news. It’s enough to make anyone forgot about the latte factor.
So what should Starbucks do for its very best customers? I have a bunch of ideas – and hope you’ll toss yours at the bottom of the post too.
1) Wake up to the fact that the Starbucks card is not a loyalty program. The Starbucks card – basically a pre-loadable (and re-loadable) gift card that customers can use at the chain each day – is an incredible phenomenon. About 15% of the chain’s transactions happen via the card. Any retailer that can convince people to pay in advance for its products is clearly doing something right.
But customers don’t get something extra in exchange for using the Starbucks card. Even its Duetto Visa card – which doubles as an in-store Starbucks card while also allowing holders to use it anywhere as a credit card – offers rewards that are merely average.
2) Give people financial incentive to come to Starbucks all the time. Starbucks didn’t need to do this years ago. But having raised everyone’s coffee consciousness, folks are now that much more aware of the improved offerings at, say, McDonald’s. They’re also more likely to sample even higher-end stuff at various regional specialists.
That’s why Starbucks ought to be discouraging the patronization of other coffee shops by tracking monthly spending at Starbucks via its cards. Then, it should reward those who, say, spend more than $50 or $100 in a given month. Maybe the first drink under $5 is free each month after someone has spent $100 in the previous month. Or maybe the chain should give more freebies to folks who buy more profitable beverages.
Even better, give store managers the power to get at the data and surprise their customers with even better free stuff when a new competitor opens down the street or in the month of a favorite customer’s birthday, or whatever.
3) Create an elite status. Airlines have it. Why not Starbucks?
First off, don’t make me wait in a long line first thing in the morning or during the afternoon rush. If I spend a lot there, I want to be able to use a special, shorter line. If other customers are jealous, that’s tough; let them spend their way into the short line.
Also, how about reserving seats next to the electrical outlets for folks who spend the most money at the chain, rather than letting total randoms hog the powered tables for the price of a small drip coffee? And let’s throw some free wireless in once in a while to boot.
Finally, the reason I don’t camp out in Starbucks like so many other people do is because I have a bad back and don’t like its chairs. Starbucks should have some Aeron chairs in each outpost and save them for its elite customers.
4) Throw a members-only party when new products come out. I have an unnatural (and unhealthy) fascination with new food products, so I always try to sample new items in fast-food chains and grocery stores alike. Why doesn’t Starbucks invite me to a preview night every time a big, new product comes down the pike?
I never did get to taste those Starbucks breakfast sandwiches, for instance, and now the chain is banishing them thanks to their offending odor.
What do you want Starbucks to do to reward you for your patronage? Please comment below.
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(47) Comments
Wow, buddy.
You’re full of it.
Get over yourself, and your elite status you seem to think you have.
Thanks Samantha!
But full of what, exactly? The simple fact is, if I spend more, I should get more. Plenty of Starbucks’ competitors agree (and serve better coffee too).
Elite status is an unfortunate term, but I didn’t make it up.
How would you justify the cutoff point for “elite” status? If I spent $49 in February, does that mean I’m off the “elite” list for the month? Or the year? What if the reason I spent less was because I was ill, or in an accident, or had a death in the family?
Don’t laugh — the Starbucks snobs will absolutely contest the lost of their “elite” status if they underspend one month. Same thing if they suddenly can’t sit in the “special” chairs.
I think you should have to earn it each month, or maybe each quarter. This doesn’t seem like the sort of thing that you should get to keep for a year, the way you do with airline loyalty programs, given that we’re talking about a daily activity here.
Another idea: Anyone spending more than $50,000 a year or $4,000 per month on the Duetto card should get elite status comped for some period of time, no matter how much or little they spend in the store.
You all should go get coffee TIM HORTONS its half the price and alot better quality also have a full menu of great food!!!!
Ah, sainted Timmy’s. If only we had more of them south of the 49th…
So, big spenders at McDonalds should also get invited to parties to launch the release of every new McSandwich, right?
Come on, dude. It’s just coffee.
Hey, you don’t have to come Areku. More breakfast sandwiches for me!
Seriously, some people chase new food, some chase new bands, some go to NBA games. We all have our hobbies and mini-obsessions.
Am I the only one who has to try a new Ben and Jerry’s flavor upon seeing it in a store?
Having a Caribou Coffee card on my keychain and a Starbucks card in the purse, I would like to see Starbucks have a promotion like Caribou runs from time to time. For every 10 purchases over a $2.50 made within a set period of time (ex March 15-May 1), Caribou will give you a four dollar credit on your card. You have to register your card on their website the first time, but I have my SBux card registered so I can check my balance. It’s not a lot and I usually don’t get to Caribou as often as I’d like to get my 10 purchases, but it gives me something to strive for and that keeps me happy. It’s the little things…. 
c’mon Ron…..
this is senseless….
look around you….. watch the News (tv)……
90% of population are hungry…. in fact, there’s war!!!
you think of something better than your coffee, right?
shame……… : (
Thanks for the reality check Coms. We’ve actually addressed hunger here:
http://blog.filife.com/freerice-use-your-sat-words-to-feed-the-hungry/
But this is a site about you and your money, not about war or the world’s great social problems. Still, a successful Starbucks means more jobs — and Starbucks jobs come with health care for part-time U.S. employees (if they can afford the premiums).
So I’d like to think that everyone wins here — customers get more freebies, Starbucks gets more revenue, the company hires more workers, and there’s ultimately fewer poor people in the world.
It’s not much, but it’s something, right?
Customers are looking for a place where they belong– not a place where you could possibly get kicked out of a chair, or not able to plug in your laptop… Seriously. You need rewards, but you need to make it seamless so the average customer still has a sense of belonging.
You’re right Rames. I didn’t mean to imply that people should be kicked out of chairs — though I might argue that folks without advanced status shouldn’t be allowed to sit in the special seats in the first place.
This creates challenges for employees, vis a vis enforcement, and potential resentment if there are no other seats. Perhaps if all other seats are filled, folks lacking status can sit in the special seats with permission?
It’s imperfect, I know, but the better seats would mean something to people and would be something to shoot for through more spending.
Loyalty programs at other retail outlets offer me discounts and freebies, which makes me a happy repeat customer. it doesn’t have to be anything major! A free drink once a month, $1 off every 10th latte, or a pastry on one’s birthday - as Atiajohn noted, it’s the little things that make a good impression.
Using the Sbux card is convenient, so I wouldn’t abandon it (or Sbux) if they don’t institute some sort of rewards program. Still, we have branches of Caribou Coffee around here and now that I know they have an active rewards program…
Hi completely agree with addressing the lack of free internet. As a student, once my apartment was overly distracting, I would head to the local coffee houses. I always chose Second Cup over Starbucks because Second Cup offered free internet. The money I saved on the internet was usually used to purchase a larger coffee or a cookie for a friend etc. (So paying the internet bill for me was definitely recouped.
Some of the ideas would be simpler to implement than others. I would appreciate if the baristas were able to focus on the coffee experience (recommending roasts, making coffee, etc.) rather than patrolling chairs or lines. Happy baristas make for a better experience. Just a thought.
I’m in Seattle and do much of my work out of coffee shops. I carry 15 prepaid cards in my briefcase for coffee shops all around the city, but not one for Starbucks, since there’s no incentive. Does this cost Starbucks sales? Not necessarily, because I can easily swipe my credit card with no sig required.
The reason I don’t go to Starbucks to work, besides the fact that many independents brew a tastier cup, is that WiFi is not free. But in my neighborhood, near a major university, tables are already scarce, so not sure they need my type hanging out for a couple hours.
Free WiFi would be a great perk for the loyalty program, if the stores had spare seating.
PS. My wife and I love the breakfast sandwiches…I’d guess more than half our trips to Starbucks are BECAUSE of that sandwich. Best $3 breakfast in town. Sorry to see it go.
You do that when you register your starbucks card you get money loaded on it from time to time. It has happened to me a few times. I have also gotten some free things in the mail. I think that this whole elite status thing is ridiculous. It is a coffee house. I go in everyday and get a grande coffee. I am not going to spend as much in a month as some people, but that does not make me less important of a customer! I should be able to sit and read in whatever seating I choose. Someone who only comes in once in a while is also not any less important. That does not follow Howard’s vision for Starbucks. It is the “third place” for everyone, regardless of how much you spend in a month. Also, the free wifi is coming with extra incentives for people with registered Starbucks cards.
Regarding this “Elite” status. I think that something should be done for regular customers, but the ideas of reserving tables and chairs and shorter lines are not the way to go.
Do I have the answer, No. But I know from working for Starbucks for many years that kicking people out of tables and chairs and having people have “special” lines doesn’t benefit everyone.
Some Starbucks are near schools and universities and are gathering places, so if we made special exceptions for “Elite” customers we’d might lose the other customers and than what would be the use of the short line.
Just my two cents.
the problem with starbucks are the knowledge of baristas. i go sometimes and they charge me 3.30 for a venti caramel frappuchino other times its 4.55 i protest and they are like you want whipped creme. or i’ll ask to have it in two cups and they are like no i charge extra and then they give me the cups here you split it.so were they charging for the cup or what? starbucks needs better training. customers are going disappointed. i myself dont go there that much, the baristas are all very unpolite
As a barista (not at Starbucks) I can tell you that Ron is probably the worst sort of customer. The kind that comes in everyday, orders a medium coffee or tea and expects VIP service. I go out of my way to treat every customer as though they were “elite” or VIP, it’s just annoying when someone expects it, when someone stands in line and huffs and puffs because they feel they’re too good to be standing in line and get mad when their drink takes longer than a minute to make, regardless of how many people where there before them.
The major problem I see with Ron’s plan, besides barista annoyance, would be that there are probably too many regular customers at Starbucks for there to be an “elite” status. Odds are even if they did get special elite chairs there would already be an elite customer in them before Ron could get to them. Ugh, this whole idea just makes me feel sorry for the poor Starbucks baristas.
ps If you really want “elite” status, tip your baristas well, never underestimate the power of reciprocity…
I don’t mind a loyalty reward,but no Aeron chairs. In fact, I wish fewer people hung out–they should make the chairs more uncomfortable. Or do like the Italians–coffee at the counter is one price, more if you want to sit down. In my local, CalTech students sit all day.
Regular customers should be able to use the bathrooms whenever they please, even when they do not purchase a drink. Starbucks restrooms are generally cleaner/less disgusting than other available bathrooms in NYC and are a must when out-and-about. It is so annoying when a sign is posted that reads something like “for customers only.” Well I buy a coffee every morning–I don’t always use the bathroom–so I should be allowed to use my bathroom pass later in the afternoon without having to read be annoyed by a sign.
wow. ordering expensive coffee in faux Italian isn’t elitist enough for you?
dude. airlines have first class because people pay 4x the price of ‘economy’ class. therefore you should pay 12 bucks for your ‘venti’ latte to get such privilege….
You know what would be a really great reward?
If the company started serving coffee that didn’t taste like pan-seared poo.
Aside from that, a sixth (or tenth) purchase and the next one’s free should be good enough.
And any upscale coffee place that doesn’t have free wifi for everyone just is not trying, and does not deserve any form of loyalty
An additional item they’ll need to add for the Elite customers will be an armed security guard to pistol whip the regular customers that keep calling the elites” sitting in their elite section “asshole”.
Entry into the program should be limited to those will to get the Starbucks logo tattooed onto their forehead.
You’re entitled to something when you spend more, all right: you’re entitled to more “coffee”. And that is all. Samantha had it right in comment #1.
snobbish: Arguing for “elite” status at a coffee shop. Special chairs?
crazy freaky obsessive snobbish: Answering every comment with a comment of your own.
As a college student I sometimes spend time in a Starbucks working on group projects with others. This often means we have at least one computer with us. What you are not so politely suggesting is that since I can’t spend hundreds of dollars on coffee a year (because I’m paying tuition instead) I might not be able to use a computer and the already free Wifi (its free by the college) while “elite” chairs will go empty and outlets unused. Really buddy don’t be such an ass. I should have the same rights to use an outlet or a chair as the next guy. If Starbucks were to implement such tasteless and terrible polices as “elite chairs” I’d stop drinking Starbuck. I think you’re being nothing more than a spoiled brat.
Snobby? Elitist??
Here is some educated fool who has nothing more to do with his time that to bitch and moan about having to wait in line for overpriced flavored coffee! Man you are more than an elitist.. you, my friend, are a complete jackass!!
Why don’t you spend more of your time running around with that styrofoam “status” symbol in your hand and do something worthwhile. There are plenty of needy people out there who need our help. In times when people in other countries barely can buy enough rice for one meal a day for their families, you sit and peck out nonsense on your computer and then ignorantly publish it.
Thank goodness I never failed for all they empty hype that Starbucks is. Thank goodness I do not run with your self-absorbed minions.
Wake up, Mr. Clueless and become a total productive member of society and do what you can for your fellow man. You should be ashamed of yourself, however, I am sure that you will just read and scoff and try to make your moot point again!
What a snob.
I have never been to a Starbuck’s and I have done just fine w/o their hight priced coffee. There is life w/o a Starbuck’s. America has become a country of “educated snobs” or “trailor trash” and all of us in the middle are being squeezed out.
The idea of rewarding frequent purchases (buy 10, get 1 free, etc.) as many have mentioned is a great idea, and could all be done on Starbucks gift cards (as I’m sure a hole punch would drive baristas and other customers insane). Giving free WiFi via the cards or an email program or something; also a good idea.
What you’ve not taken into account, Ron, is that in the vast majority of Starbucks stores, there is NO EXTRA ROOM FOR AN EXTRA LINE! Are you on crack? Whether it’s a good idea or not (it’s not, in case you’re wondering), it’s not actually feasible. To even suggest it tells me that a. you frequent a monstrously large Starbucks in someplace like Kentucky (I assume there’s lots of free retail space there), and/or b. you’ve never been to any other Starbucks/you aren’t really the frequent customer you say you are.
In one of your additional comments to a comment, you allude to the fact the ONLY the elite customers could use those fancy chairs (again, are you on crack?). That’s your solution to not making the baristas force people out of them, right? Just never let the “peasants” sit in them in the first place? Again with the crack-induced ideas. What if there are no other seats? A paying customer who doesn’t happen to have elite status but wants to sit to drink their beverage can’t?! You’re on drugs, dude. And not even good ones.
I do like your idea of a little “pre-release” party for upcoming products. They could invite you and your “I expect everything” friends to that and no one else would care.
i understand your idea that “those who spend more should get more,” but i also recall the oft-used phrase that a mother repeats to a small child when he/she complains about inequity: “life’s not fair.” i repeat this phrase to you now. i believe that an “elite” section (replete with cushy chairs, exclusive wi-fi, etc.)in starbucks is a silly idea. why? because i believe that the right of a “total random” to sit and “hog” your powered table is not any less as important as your right to do the same. after all, their money spends just the same as yours or anyone else’s. i’m for equality, not exclusivity. i prefer fewer dividing lines between people instead of more.
While I would support some sort of discount for frequent coffee purchases, I think having “VIP sections”, special lines and elevated status is ridiculous. If Starbucks really wants new customers, they shouldn’t play “favorites” in that way. People go to Starbucks to get coffee, not to be put down and made to feel inferior. That’s the great thing about a free-market economy; if people don’t like a store, they’re not obligated to buy there. If Mr. Lieber wants particularly special treatment, he should start his own coffee shop.
By the way, fuzzymuffins (06/09/08 @ 12:07 am), has a very good point. If the VIP wannabes want special seats, etc. like the airlines, they should have to pay an equivalent price (4x the regular price for a latte sounds good).
Not trying to say I don’t enjoy a nice Starbucks cup o’ joe from time to time, but if you’re spending $4000 a month there you should have your head examined. More power to you if you have $50,000 a year to throw away frivolously, but you should consider buying a good coffee maker and brewing at home. My wife and I drink Trader Joe’s Cafe Pajaro (certified free trade/organic), which tastes FAR better than any bold Starbucks blends. Take the extra $45,000/year you’ll save and donate to some charities. Though I know my comment won’t change your mind about buying Starbucks, I think the idea of “elite status” for high-spending customers is ridiculous. My vote is for one free tall latte for every 10 drink purchases. Doesn’t need to be more elite than that IMHO.
Let me guess: he’s going to vote for Barak Obama…
First, bring back the breakfast sandwiches. For trying them again for people who loved them, a free coupon for the next brakfast sandwich could be give out. When a product doesn’t seem to be popular with some of the people, give people like me a chance to come back in and support the breakfast sandwich. Truely, a delicious breakfast item with snob appeal:)
I’d say your on crack but that drug is for more sophisticated people who wouldn’t allow you in their club….lmao
Aeron chairs will not be happening. I always heard McDonald’s seating was designed to be comfortable for a limited amount of time only — get ‘em in, get ‘em fed, get ‘em out. (Besides, they’re expensive. How long do you think it’ll take before they get wheeled out the door and sold for $100 a pop out on the street?)
I’ve been pestering Sbux for years for free Internet, but now that it’s here (via the loyalty program), I wonder how they’re going to enforce it. Two hours is plenty, by the way: They’re a coffee shop, not an office space provider. I’m sure profits go down as lingering goes up, beyond a certain point. (Perhaps that point happens to be two hours.)
Finally, one reason the loyalty card is popular never gets mentioned: It eliminates the need to handle money. Money is dirty, and food should be clean. (Baristas probably hate the thing: No change means no tips.)
It IS just coffee when you get right down to it. No matter how good it tastes or how cutesy the whipped milk looks on top. That’s why Starbucks is losing business and that’s also why Ron has a point.
To lure me into buying the exact same product (in altered form) that I can get in the company cafeteria every day for free, I want to be treated WELL. That means shorter waits for me and better service than I would get at just any old place.
It’s JUST coffee, but it is freaking EXPENSIVE, and as a daily customer who spends 80$ a month, I don’t want my time wasted on top of it.
If I don’t get this, or perks that translate directly into monetary benefit for me, I pull up my business and go to the company cafeteria.
Made that decision 3 weeks ago.
Sir,
Your elitist mentality is dangerous. This economic elitism that you are crying for could really damage our nation if it actually happen. Instead of dividing people between black and white like we did in our tragic past, we’ll just make an even stronger divide between the rich and the poor.
Some people who go to Starbucks and sit in a nice comfy chair go there to reward themselves after a month of hard work. THEY DESERVE TO SIT ON THAT CHAIR JUST AS MUCH AS YOU DO.
This kind of elitist status is disgusting. What would a guy like you do if one day America fell and there was no Starbucks, let alone a “Starbucks Preferred Customer” section.
Get a life!
God, I admire you so much Ron. Don’t let these naysayers keep you from your dream.
No matter what they say, you, sir, are a BIG SHOT. Don’t let anyone tell you otherwise! You’re the head honcho of Starbucks’ elite. You stand proudly at the vanguard, a certified Venti VIP who will NOT be treated with the callow disregard reserved for hoi polloi who spend a FRACTION of what you spend on coffee!
KEEP THE FIGHT ALIVE, MY GOOD FELLOW!!
If I walk into a coffee house that has any kind of “elite status”, I won’t be returning. They can keep their comfy little chairs and wall sockets.
With all that’s going on in this great, wide, wonderful world of ours….this is what you agonize over?
…Really?
Well, good luck with that.
Those of us who opt to buy coffee from places with individuality, character, and pride-of-ownership will wave to you as we pass by on our way to Things That Actually Matter. It’s a nice place - you should visit.
I get the feeling that more people would agree with David than you might suspect, and that the loss of business from people turned off by the VIP Experience might be greater than the gain from people trying to obtain and/or maintain “elite status”. There are plenty of choices for caffeine these days and forcing baristas to play Big Brother on top of, you know, making coffee doesn’t seem conducive to a welcoming atmosphere. It might even be seen as becoming “less passionate about customer relationships”.
Now, if you buy a whole lot of coffee I can see how it would make sense to give you a discount, like anything that you buy in bulk. But you need to fly 25,000 miles or so to qualify for gold status on airlines, and the coffee equivalent might be not so healthy for your heart. Or nervous system. Or ability to function as a human being.
If your ever in Germany, Munich specifically, check out McDonald’s McCafe. They kick Starbucks ass into infinity and beyond. Germans because of the Italian influence (more Italian restaurants than German ones) drink loads of Cappucinos (something I sorry miss since moving to Spain) and McDonalds does the best bar none.
If your in the UK skip Starbucks and go straight to Costa Coffee! 10X better than starbucks (and just as pricey)
