Let’s talk about MyStarbucksRewards. It’s the loyalty program that Starbucks first adopted in 2008, and it is still around today. The program has certainly gone through a number of changes since 2008, and as I understand it, is still going through some modifications and changes.
Prerequisites: In order to earn any rewards, there are a few basic prerequisites to the program. It’s pretty simple. You have to have a Starbucks card. This really can be any card that strikes your fancy, whether that’s a city card, the new braille card, the “Twilight” First and Battery Starbucks card, or any other card. Don’t let anyone tell you that you have to use some specific card. You must register the card at http://www.starbucks.com/card, and you must use the card to pay for your purchases.
MyStarbucksRewards is set up with three different levels of benefits. My understanding is that Canada will be getting the same version of rewards as the U.S. program. The three levels of rewards are as follows:
(1) Welcome Level – (One Star) At the “Welcome” level of perks, you can earn a free drink coupon for a birthday beverage. The drink coupon is mailed out a few weeks before your birthday. My understanding is that you have to have an “active” account to get the free drink perk. What I mean by that is that your card has to have been used at least once in the past 12 months.
(2) Green Level – (Five Stars) The Green level includes perks such as no additional charge if you want soy or breve milk in your beverage. Standard syrups are free. You can get ANY free tall beverage with the purchase of one pound of beans. And similarly, you can get any tall beverage when buying one half pound of Starbucks Reserve coffee. At the Green level, a customer can get free “refills” too. A refill price is only available for customers staying in the store. Regardless of original beverage purchased, a customer can get Pike Place Roast (or whatever happens to readily available on the brewers), iced coffee or iced tea as a “refill.”
(3) Gold Level – (Thirty Stars) – At the Gold level of benefits a card holder receives all the perks available under the Welcome and Green levels. The Customer also gets a shiny gold card with his or her name on it. And when at the Gold level, the customer will earn free drink coupons for every 15 stars, and other promotional coupons. The customer must opt into additional postal mailings on his or her profile in order to receive the special extra coupons such as a free Frappuccino, free petite treat, free holiday pastry, and many more.
The above is a really short summary of the card perks. Unfortunately, there are some challenges with the program, and the pitfalls haven’t changed much over the years:
Pitfalls:
(1) Customers are confused about what is a “sauce” and what is a “syrup.” The typical customer knows almost nothing of the business of Starbucks, and has never pumped any sauce or syrup into a cup. He or she might be only vaguely aware that there are some jars, and some pumps, and the barista uses that to put flavor into a cup. So for many customers, they think that “Mocha” should be free under the card rewards. If all the sauces were a free perk the problem would be that nearly every single person would only be buying a ‘latte’ as an espresso beverage, and there would never be a charge for a ‘mocha.’ Starbucks never intended to stop charging for mochas, and it probably is not a good business idea to charge mochas as a latte. Syrups are a little thinner than sauces, and a little cheaper for the business, so it makes sense that they can be offered as a freebie.
(2) Many partners do not realize that a customer can receive ANY tall beverage when buying a pound of beans, and will be free. The register will automatically deduct the tall beverage with the one pound whole bean purchase. (There is the same perk if a customer is purchasing a half pound of the Reserve coffee offerings.) I’ve seen many experienced partners get tripped up about this. It’s a Green level benefit. I’ve watched partners think that you have to be using your gold card to get this perk: That is simply untrue. A customer only has to be at the Green level, and can use any registered card, and can receive this benefit, even if he or she wants a tall mocha Frappuccino with an additional espresso shot, when buying a pound of Pike Place Roast.
(3) The refill policy creates a lot of confusion: Customers erroneously think you can leave the store and still get a refill. Partners often do not realize that a refill for in-store guests can be given regardless of original beverage purchased. Here are some refill guidelines:
i. There is never a “refill” price for drive-thru customers.
ii. Refills are designed to encourage people to linger in the stores on the theory that they will buy additional food or merchandise. There is never a “refill” price for customers who leave the store.
iii. Refills do not have an arbitrary one hour or two hour time limit on them. However, this is an area of ambiguity, but no customer-facing material that I can find describes that you can only stay two hours in the store and still receive “refills.” I recall in 2008, when Howard announced these perks, he clearly said, “Stay as long as you like …” and that is always how I have interpreted this.
iv. Refills do not have to be exactly the same beverage that you started with. If a customer orders a tall mocha, and then walks up to the register and asks for a tall Pike Place Roast in his or her cup, under Starbucks standards, that is a refill.
v. The only beverages which can ever be charged under the “refill” price are Pike Place Roast (or whatever coffee happens to be brewing at the moment), iced coffee, and iced tea. If the customer wants an iced tea lemonade, that is always full price.
(4) The shiny gold card with the customer’s name on it creates confusion. There is NO requirement to actually use this card to get any benefits. This is SUCH a problem that so many people think you must switch cards to get perks! No no no no. Use ANY card registered to your Starbucks.com account which is at the Gold Level, and you will earn all your perks.
(5) Stars are earned per purchase, and do not have any relationship to the dollar amount of the receipt. Most major retailers create reward programs that offer increased perks with increased spending. At Starbucks, if a customer is buying a tall brewed coffee, and then decided to grab a CD at the register with the purchase, that is still “one star” unless the CD is rung up separately. This set up is so very different from what so many retailers do that many customers will feel disappointed, as if there is no reason to ‘add on’ items at the register.
(6) The card rewards are hard to explain in a short soundbite. Overall, this rewards program is a generous program. It is especially rewarding to customers who order espresso drinks with syrups and soy or breve milk. However, again, remember that the typical customer does not know about the business of Starbucks, and is not an expert in these rewards. It is hard to appreciate what you don’t understand: These rewards can ‘feel’ like they’re lacking if the customer never orders refills, milk changes, and syrups in drinks, and doesn’t buy whole bean coffee.
One day recently, I was sitting at Menchies with a friend who asked me, “What benefit is there to having a registered card?” I inquired about what she likes to drink at Starbucks. I didn’t realize that pretty much the only thing she orders is green tea. The one time she was buying a pound of whole bean coffee (as a gift, as it turns out), she said she asked about a free drink and was told that it had to be ‘coffee.’ (This was recently and she’s definitely at the Green level!). She tried to explain to the barista that she only likes iced tea, and says she was told that iced tea is not a free benefit. This story is a good example of the typical problems with the rewards program: Many baristas don’t understand it well, and customers often understand it even less.
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Problems with the MyStarbucksRewards website:
I have to be honest that I don’t entirely trust the MyStarbucksRewards website. If you dig for information about the rewards, there is still a section on that website that describes the old (and no longer available) 10% off rewards program. The only thing that is going to do is confuse customers. And the description of the rewards misses some key points, such as a free tall beverage with the purchase of a half pound of Reserve coffee. It’s not a terrible website, but I think it could be a bit more clear and thorough.
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Conclusion:
There is a part of me that is exhausted by the rewards. It takes a lot of work to explain them.
Once Starbucks opened up Pandora’s Box of rewards, it became difficult to close it again. Occasionally, I think we were better off before there were any rewards at all. It was a much more simpler time! I sometimes think that Starbucks should wipe out all the rewards. For those who are interested, I’ve heard that Starbucks is doing a test of free additional shots in beverages. However, it appears that the only to receive the perk is to order a “quad” beverage, or at least two more shots than what the drink recipe normally comes with. Please don’t take this as gospel! I’m not totally clear if this is a test, or a permanent change on the way.
It’s probably an expensive program too. For a billion dollar corporation, they are not offering anything that they can’t afford to do, but overall they probably spend millions and millions every year to operate and manage the rewards program.
One other thing is that in any business, it is generally thought that not all customers are the same. The super frequent customers, even if buying a cheaper beverage, will ultimately spend more in one year than the customer who takes 9 months to get to Gold, and come in just for a treat of a Frappuccino. It is kind of the idea that maybe 20% of customers drive 80% of sales: There is an opportunity for partners to use the gold card to create customer loyalty. The barista can learn names, and can immediately recognize that the gold card holder probably is in that more frequent category of super-regular customers. For sake of numbers (and I’m not totally sure how accurate these numbers are!), I have heard that Starbucks has about 60 million customers a week cycling through their doors. In contrast to that, there are probably less than 3 million Gold Card customers. The Gold Card program provides a real opportunity to identify, nurture, and reward the customers who are super-regular and probably spend more in one year than any other group. One lost Gold Card customer over a bad experience probably takes two or three ‘treat seekers’ to make up in sales. From that perspective, suddenly the thought of a free tall Frappuccino with a pound of Pike Place Roast no longer seems so expensive.
Today is the day that Canada gets these rewards, so I felt it was time for a recap. In many ways, I’m disappointed that Starbucks simply relaunched the same program that the United States has rather than improving upon it or fixing the flaws. There are, as I understand it, some international markets that have completely different versions of the MyStarbucksRewards.
I want to make it clear that I appreciate these rewards, yet there are opportunities for improvements, and I’d like to see Starbucks make some minor changes.
Feel free to talk about anything Rewards related! Are you happy with MyStarbucksRewards? If you could change one thing about it, what would it be?
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I got a postcard last week for the free Bagel. I never order anything but coffee so not sure how they select who gets what. Maybe they targeted non-breakfast customers to try and corrupt us?
They either flip a coin or say “Eeny, meany, miny, moe” to decide who gets what freebie. I didn’t get the bagle one. When I was in the assisted living place and had computer access I kept hearing reports of people getting free frappuccino post cards and thought it would be a nice home coming treat to get one and thought one would come in the mail. I never got one of those either.
When I was at work last night, I deliberately checked when someone ordered a Cinnamon Dolce Latte with a gold card to see the answer to the free syrup question.
The register DID discount the price of the syrup. This is a register using Symphony. I’m not sure about the old system, but I do remember the old system had a shortcut button for Vanilla Latte and I seem to remember it not taking the syrup off in that case… but please don’t take my word for it.
Bottom line – if the store uses Symphony, the register is smart enough to do any automatic discounts for you (tall drink with 1lb purchase, syrup additions, shots, breve, soy, etc.). We still have to enter coupons (Sweet 15, Birthday, empty bags from grocery stores…).
Mark, it is a classic marketing technique to send out coupons for new products, and to try to get loyal customers who typically buy only one or two things to try something new. I can’t tell you how many drip customers tried frappuccinos just because they got a coupon for a free tall one… so they pretty much are trying to get you to try something new.
@Mark and Steve – I didn’t get the free bagel coupon either. I usually do get them. They must just spin a wheel and see who gets a free bagel. @Jo – I’ve heard that you can use a US card in the UK, and vice versa. But I’ve heard that there is a seperate problem trying to register the card. I suppose you could try transferring the money from the UK card on to a US card, and registering that …?
I like Melody’s spin a wheel explanaion Mark but I like my flip a coin or “Eeny, meany, miny, moe” explanations better!
@kitenarie: I asked at another store yesterday re: the cdolce syrup and was told: yes, it DOES come off (symphony) but that for quite a while it was NOT one of the reward syrups. ???
I know I was not getting it off for most of the last 2 yrs….I will have to notice when it gets cool enough again here for my cdolce (winter) drink.
thanx for your input.
I feel like if WE have Symphony at our store, then most stores should, because we tend to get everything last. I don’t remember last year when we had the old system all that well. I’m really not sure about whether or not it used to be excluded… I feel like if it was excluded while I was employed, I was too new to really understand or notice the difference.
I think the reason CD wasn’t originally included in the rewards program is because it was initially launched as a promotional beverage and those are never discounted as they usually have sauces in them. The fact that it never went away should have yielded a change in it’s classification, but I guess they figured the whip cream and topping still made it worth the extra money???
Having said all of this, it was before my time at Starbucks, so I really don’t know. It’s just what I’ve been told.
I sometimes add SF CD to my Americano, but always when it’s a partner beverage, so I haven’t noticed about the syrup coming off due to the registered card. I’m happy to hear that it does though!
One thing I’m curious about is that in the information they told partners that we’d automatically start at the Green level, but the email I received told me that I’d been enrolled at the Welcome level. I need to figure out who to contact about that.
Dark Cherry was also a syrup that did not come off with rewards. I used to put it in my oatmeal (thanks to Melody’s suggestion) and it never came off – if I added a different syrup, (vanilla, etc.) those would be removed by the register.
I do think this is one of those shady/funny areas in Starbucks pricing schema. A peppermint mocha is available year round as a mocha add peppermint. Under the reward structure, the peppermint should be free, but during the holidays (and if it’s rung as a peppermint mocha) it is a higher price.
Again, you could add vanilla or another syrup and not be charged extra. But the peppermint, because it’s in the promotional holiday lineup, you pay extra. And I *think* it’s even more than just a mocha add syrup – I *think* it has an even higher “promotional” beverage price (probably justified by the latest sprinkles or whatever is put on top – which ironically, are often in short supply and not put on the beverage, especially toward the end of the promotion).
I wish Starbucks would be more straightforward with their pricing, promotions and rewards.
With all this continued discussion about the rewards program at SB I guess there is one simple question that needs to be answered and perhaps SB has not fully thought it out even to this day-
What do you want to give to your customers by way of the rewards program and as a result how should customers feel?
And I guess perhaps another point is what do you SB get or want to get as a result of offering a rewards program to your customers?
Let me try to answer your question from an ordinary customer’s point of view. First part you say “What do you want to give to your customers by way of the rewards program?”. My answer is simple…a free drink of the customer’s choise. The second part “how should customers feel?” Well they should feel happy that they are getting a real expensive venti drink for FREE. At least Starbucks makes them think it is free but in actuality in the 15 items you must purchase separately (more if you don’t separate them out) you pay for your free drink but most people don’t stop to anyalize it they just see the word FREE and can’t wait to accumulate the next 15 stars for another FREE drink. Personally I think Starbucks thought this out very cleverly.
according to the starbucks card website it says i need 29 stars to get my next year of gold. 3 days ago it said i needed none. in the last year i have received 11 free drinks coupons. is that not more than the 30 needed to keep it up? when i called the corporate office they said i needed none and i was good for the next year, the website says i need 29more. which is which?
I wonder…Is it a calendar year? Or from when you joined (or when the program launched). Maybe you’ve tipped over the year mark and you’re back to needing to earn your 30 stars again?
@Tim – I wonder if the Starbucks Card site has just hiccuped lately. The FAQs were messed up a couple of days ago. Or take a look at when you joined the program, as Michelle suggested … Good luck!
(Actually, the card website makes me crazy. It sometimes it won’t load my history, and last time I did get it to do, it no longer tells you a cumulative total of stars. I miss that feature! And it frustrates me to look at it. As I look at September, it looks like I had a few days in a row where I had a more than 15 stars, yet no free drink icon. And in general, it looks like I should have more coupons than I’m getting. This reminds me why I don’t like looking at that feature. It’s nicer not to look.)
I finally got the answer from Starbucks on my star dilemma. I am good for 2012. the stars that are listed is what i need by 0ct 2012 to continue gold until 2013. Thanks for the clarification starbucks.