This Week Starbucks changed their Loyalty Scheme in which they have millions of members and caused a stir amongst some of their loyal customers because they have changed the way the rewards are accrued.
Previously you were awarded a star for every transaction, Starbucks this week changed this to be a star relative to how much you are spending.
This has upset lots of people particularly those who visited frequently but spent little, and predictably it’s trending on Twitter #stabucksreward. 12 visits used to get you a free drink, now it is based on how much you spend in total, so you would need to spend more than you did previously to get the same reward.
Previously if you bought 12 drinks for $2 spending $24 you got a free one, now to get the same drink you would need to collect 125 stars, the equivalent of spending $62.50.
Pretty much every coffee shop has a loyalty club of some description, the simplest of which is the traditional stamped loyalty card.
The App v Paper Card
Many coffee shops, especially the big chains are moving over to an electronic version either as an app or as a swipe card. The traditional stamped paper loyalty card generally gives the biggest discount as most of these involve buying 9 drinks and getting the 10th free, assuming that the tenth drink is the same price as the previous 9 that equates to an 11% discount.
When you try to unravel the discount levels for Starbucks and Costa it’s not as simple as that and is based on the amount you spend, with other rewards bolted on the side like free syrups when you achieve a certain level of points. Typically Costa’s reward is 5% and Starbucks 3.1%.
So you can see a clear reason for them to ditch the old paper card.
The big benefit in having an app or swipe card over a paper stamp card is the information you get about your customers; how often they visit, what they buy, where they buy from and now the ability to take queue busting pre-payment on an app. Starbucks are rolling this out as fast as they can so that tells you something about how well it’s going for them.
It used to be very expensive for an Independent coffee shop to have their own pre-order and prepayment app. Not any more though as there are some great mobile payment apps specifically for coffee shops that are well within our reach. We are in the process of setting up our own pre-order app in conjunction with Ordable www.ordable.com and will report back in a few weeks when it is all up and running.
About the Authors
Andrew & Claire Bowen are the authors of ‘The Daily Grind – how to open a coffee shop that makes money’ Available on Amazon, and Founders of Cafe Success cafesuccesshub.com – the ultimate resource site for coffee shop, cafe and tea room owners worldwide.
To buy The Daily Grind on Amazon Click Here