Are your customers talking about the rewards program changes?

The mainstream press is starting to report that Gold Card users will lose their 10% discount. Are your customers aware of this -- and talking about it? || Read "Starbucks Gold Card members to lose their 10% discount"

Comments

[anon]

Very disappointing. I'm not sure what I'm doing yet. I may just walk away from SBUX at the end of the year. There are a couple of other coffee places nearby I've been ignoring because I use my Gold Card, but without that, it's pretty pointless to keep loyalty to SBUX. I can buy good 1 lb. bags for cheaper elsewhere.

[Scott B.]

We can still pay with the card, right?

Or do you pay with one and use this for discounts only?

[Jen]

I think the new program will probably suit most customers better. To break even on the old gold card, you'd have to plan on spending at least $250.

[Eric]

This is a lousy deal for loyal customers.

Here's the breakdown:

Let's say I'm a gold card customer who buys one $5 drink every day of the month.

The cost savings at %10 are $0.50/day or $15/month. The new rewards plan would have to give 3 free $5 drinks to add up to $15, which is unlikely with the current "buy 15 drinks and get one free" plan.

For those who buy cheaper drinks, the new plan will be about the same, with about 3 free drinks needed per month to equal the monthly 10% savings.

However, Starbucks doesn't just sell drinks: it sells pastries, sandwiches, cups, gifts, CDs, and is soon to be selling farm equipment and airplane parts. At the least, the gold club card got a discount on food, and under the new plan food won't count towards your free drinks.

I suspect this will dramatically reduce the likelihood of some people buying expensive drinks, and will certainly lead to people 'gaming' the system, by purchasing multiple cheap ($2 or less) drinks to increase their 'drink count' in order to get the freebies.

[anon]

Jen, that's the problem: it suits most customers better, but it actually screws the most loyal, biggest spending customers. And it screws people who buy gifts, pastries, whole beans, or Via. Why in the world would they lump all "purchases" together?

If you only buy drinks at Starbucks, and if you spend less than $500 a year at Starbucks, this plan is great for you. But I can't understand why Starbucks would create a model to boost the casual customer and screw the loyal customer who spends more than $500 or who buys all kinds of things at Starbucks.

For that reason, this plan is a really bad idea. Casual customers will think, "Why 15 drinks? Everyplace else does 10. And I don't even go to Starbucks that much anyway." Loyal customers will see that they're losing out on all non-drink purchases and will be turned off.

[Andrea Haag]

It screws me...I liked the saving with my gold card. I bought pastries, coffee beans and some seasonal things. Now I figure I really could do with out since I now get coupons for other specialties coffee beans by mail or online.

And as for the pastries....well nothing to miss there. I like Panarea pastries better. When my gold card is up then Starbucks will see less of me.

[Brown Dot]

so those of you who are complaining about the new program and you aren't getting your 10% off think about this. The average (average does not mean every day) customer comes in 4 times per month. Therefor, spending $25 for 10% off does not fit them nor does it suit them. Changing the program only makes sense. it's called pleasing the masses. The minority does not get what they want (most of the times). The 3 times a day 365 days a year customer does not make up our customer base nor is it our bread and butter...the average customer does. Sorry.

[GoldCardRipoff]

Gold card always seemed like a complete rip-off. Why charge $25 up front? What if I discover better, cheaper coffee beans somewhere else after I buy the card? I'm out $25, and I'm locked in to Starbucks for $250 just to break even! Kind of insulting...

If they'd really wanted to reward loyal customers, they would have just given people $25 on their card after they'd spent $250 in a 12 month period. That's what would really reward loyalty.

[Melody]

@Eric - My understanding of the new plan is that you earn a star with every "transaction" and not with just every drink purchase. As everyone has commented, the new plan gives greater rewards to the lowest spending customers.

@Brown Dot - The 20% of customer who walk into a store more than 16 times per month (this was the target group of the orig Gold Card, I think) still should be cultivated. They comprise a huge amount in sales. I've previously explained why the new program won't affect my own Starbucks visits, but I can see how many customers are discontended that Starbucks now seems to favor the least loyal customers over the most loyal/spending.

------
In my own blog (link to my post about the new gold card in my name) the most lively conversation I've EVER had has been surrounding this new Gold Card. I will say that one incredibly intriguing comment by a reader was that the new loyalty rewards program will save Starbucks LOTS of money in the form of Visa fees. No longer can you use a GC, and pay with any form of payment. It encourages people to put money on their Gold Cards and use it, possibly reducing the number of Visa transactions, and ultimately the amount of fees that Starbucks has to pay to Visa. I would have *never* thought of that analysis on my own, but that is a nice side benefit to the corporation and shareholders.

[me myself and I]

And Starbucks earns interest on the unspent part of money loaded on all these cards. Yes, it makes sense from a financial point of view. But it doesn't from a customer point of view. Unfortunately this will affect the financial part as well. If you ask me, they should have moved the "old" gold card to a platinum status and everything would have been fine. (well, a lot of people would still complain, but you just can't please them all).
It really doesn't make sense to me to alienate the most loyal customers of all.
And whoever said you would be locked in for 250 dollars to be spent at Starbucks. YES, that is exactly what they want you to do. Even though I personally don't like those "pay upfront to save later" schemes and don't participate in them.

[me myself and I]

I have a question about the duetto rewards. Does anyone remember what the levels were to earn those quarterly bonuses? You know, the ones you were sent a postcard that stated they gave you that much extra based on you spending habits in the last three months? How much do you need to spend to get how much of a bonus? They took that information off their website and I can't find my personal file right now.
Thank you.

[anon]

Brown Dot, GoldCardRipoff--that's what the old registered card was for! It had benefits, it was free, and it wasn't designed for high-volume consumers.

Why did SBUX ditch the Gold Card? Plenty of people were using it. Why not introduce this new system, then have a Gold Card fee on top of it that you could opt into?

Because they're cutting corners and don't want to lose the money to the high volume Gold Card users, that's why.

[satx]

@ Brown Dot: By your math, and assuming an average sale of around $4, a customer who comes in 4 times a month will spend $192 a year with Starbucks. A customer who visits 3 times a day with that same average sale spends $4380 a year with Starbucks. So the company will need to gain roughly 22 new casual customers to replace every one loyal customer it loses. At the store level, it frankly is financially profitable to tend to the loyal customer who knows where to stand, how to order, and brings in their whole family on weekends. And it's a lot more fun for barista and customer alike.

[Will]

How about a card that discounts only whatever promotional drink or item that's being offered that month, in order to drive sales of the promotion?

[Debbie]

I know I'm not impressed with the new deal - I buy drinks and pastries, go there an average of two - three times a week so my $25 easily paid for itself. Oh well - really needed to cut down on the Sbux visits anyway - this will possibly do it.

[Cindy]

So if I'm buying five drinks in one visit, what's to stop me from paying for each drink as a separate transaction? If I get a free drink with every 15 beverages purchased, that's what I may do, which will suck for the baristas. Does anyone like the new rewards program?

[Rodentius]

This really SUCKS. We who are very frequent visitors and smart enough to do the math LOVE the Gold Card. I can buy anything? in the store at 10 off, not just coffee. The $25 fee is nothing for this discount....compare the idea to say Costco membership and you'll get the concept.

With the Gold, (why is a black card called a gold card anyway?)
I get one free drink after buying nine. With the new deal, as far as I can tell, I get one free drink after buying 15. Hmmm, 9 vs. 15.

Talk about dumbing down...thanks, you SB management holes. They should go to a tiered system, with the new cards being called something else and give us the option to continue indefinitely with our Gold Cards if we desire.

Talk about stupidity....read the comment 3 back from Satx; it is so right.

[Alexandrew]

This new attempt at the Loyalty Program IS actually going to have the reverse effect - it IS going to drive away the valuable loyal customers.

I for one am a Charter Gold Club card holder - in fact, my Gold Card was sent to me for free almost a month before the program went public last fall. At the time, I was told that this was done for the top 2,500 customers in the U.S. (I was beyond shocked that I was in that grouping). Needless to say, while the Gold Card program wasn't perfect, it was the first time Starbucks had even made an attempt at satisfying their loyal customers - a smart thing to do as the overall economy was in an epic downturn. Forget the fact that promises were made that additional rewards and promotions would be given throughout the year - I never received anything other than a birthday free drink coupon - but the 10% was a nice perk given how much I've frequented Starbucks.

Now that the marketing geniuses (and Howard) have spoken in a language they feel will appeal to their core customer base - a simple elemental star system - they have lost me - a very loyal customer. Through this new Rewards Card program, they have completely turned me off - and it actually wasn't all that tough considering they just raised the price of my drink AGAIN last month. Come January 5, I will never step foot in Starbucks again (unless someone else is buying-but I will do my best to persuade in going elsewhere).

I was won over by Starbucks about 11 years ago from Coffee Bean & Tea Leaf (a Southern California competitor) and I will now go back to them (the 10% discount card I was given by them almost 14 years ago is actually still accepted - even though they no longer distribute them).

I am in marketing and I understand it quite well - let's see how Starbucks understands that MY yearly "donation" of over $6,000 in beverages, food, mugs, Starbucks gift cards and additional Gold Cards purchased as gifts will be matched by some new customer excited to get their 15th drink for free through a STAR CHART!

And as if this isn't good enough, the true fun has been talking to baristas and regular customers at the locations I frequent - just since Friday's announcement. Not a single person who I have spoken with had any idea about this new program and some of the baristas actually thought I was joking. Upon realizing I was serious, they believed it based on how F*ed up the various Rewards cards have been to date. One manager even offered to guess how many of her loyal daily customers who had Gold Cards would stop frequenting based on past conversations - she thought that this is going to be one of the worst business moves by the company in her almost 3 years with them. She was also in complete agreement at how bad the lines will be with people ringing up separate transactions and also how many customers will just walk out based on the long, slow moving lines. I've also spoken to 3 of the 9 people I gave the Gold Cards to as gifts in the past year and they have said that they will draw the line at this absolutely ridiculous move by Starbucks to increase their bottom line and turn off their most loyal customers - whenever their cards expire, they are also done going to Starbucks and will just go elsewhere.

I look forward to seeing how this latest change goes down in the history of worst marketing decisions by corporate America.

Did I mention that I am also selling my Starbucks stock after holding it for almost 10 years!

[Rob]

The pink elephant is just how desperate yet out-of-touch the leaders of this company are. They just replaced one unpopular program with another unpopular program and kept the details confusing. They still continue to grasp at straws. It is apparent they have no concept of their customers and are stuck thinking inside the little building in Seattle.

[SBUX Customer]

With the gold card, even if you are not a frequent visitor to Starbucks, you still break even or almost break even with the $25. This is because Starbucks sends coupons through the mail.
I've gotten 3 coupons for free Vivanos, a free coupon for Starbucks ice cream, free birthday beverage, plus the savings using the 10% discount, and more. So it all adds up to close to $25 give or take.

[Melody]

Over on MSI I read someone's comment that with the new program you actually get mailed a free beverage coupon every 15 stars. So it's not immediate, and in fact you wait on the post carrier to bring it to you. ?? That seems very delayed, and like a lot of work and paper. I had assumed that somehow your card would know when you've got 15 stars, and that there would be some very sophisticated computer prompt telling the barista you had earned a free drink.

Can anyone here confirm or dispel this? Do you have to wait for a beverage coupon to come in the mail under this new program?

[BOSTON STARBUCKS REBEL]

Not sure, but that seems about the way Starbucks would do that. If Starbucks was smart, but who says they are...
The would implant an RFID into each personalized card and have a special scanner for it at the register so that the customers could pay that way and see what their balance and number of stars.

My Starbucks Rewards FAIL

[Melody]

@BostonStarbucksRebel - On the topic of these free beverage coupons being mailed to the customer ... I wonder if Starbucks is counting on some of them getting lost, forgotten, or otherwise never redeemed.

If Starbucks had an electronic system at the register automatically gave out the free earned beverage, it would always be redeemed.

But I assume there are many others out there like me who often lose or forget paper coupons. Fewer beverage coupons will be redeemed, but on the otherhand, now and then, baristas are going to have the angry customer who says, "but I'm sure Starbucks owes me a free drink, but it must've gotten lost in the mail" (And with millions of customers, that will definitely happen to someone ...)

I hope I'm wrong about this paper coupon thing.

[you know]

@Melody

Automatic sounds great, but what if the fifteenth drink you order is a tall drip because that's what you want right then. Then your free drink benefit is $1.50, when you'd rather save it for the $6+ Venti add shots add modifiers drink you'd rather have at another time (or you'd rather give the free drink to someone else). The paper coupon is really the only way to give you that flexibility.

[AmericanoMan]

Not to seem like an ungrateful 30+ year Starbucks customers and as one of the privileged few who was rewarded with the coveted free Gold Card, but Starbucks has caused me to re-evaluate my relationship with them. This is the final straw.

I will not be buying any Starbucks "gift cards" this year for Christmas giving (last year I bought $1000.00 worth), nor any other Starbucks products. I have started to leave twice my usual daily tip and will leave some extra special cards with tips for Christmas. I will miss my friendly baristas, but as of January 1, 2010 my Starbucks habit is done.

[Melody (reply to you know)]

@you know - I had this crazy thought that the barista would be able to ask the customer the question at the register: "Do you want to redeem that beverage now or later?" and your card could sort of 'bank' drinks. Perhaps, my imagination had gone a little too far with the things that I thought the Starbucks register could do... ;)

[BOSTON STARBUCKS REBEL]

Not likely, Melody. We can't even "bank" our markouts.

[livin' la VIA loca]

Just check this out:

https://www.starbucks.com/card/rewards/faq/

Yes- postcards mailed to you to redeem free drinks.

And whatever happened to the tried & true 80/20 rule of marketing...that 80% of your profits come from 20% of your customers? And Business 101- that it is easier/less investment/more profitable to keep a current customer than replace with a new one?

Guess that wasn't part of the analyst call on fiscal report results today or any SSC discussion before making these changes.

[baristajack]

this is what the customers asked for, so don't forget this little fact, all this came about at mystarbucksidea.com, so all you penny pinching, micro managing drink orderers are now going to get what you want, I dont mind ringing everydrink seperately, it generates labor for us..you pushed and pushed for more more more, now see the fruits of your labors, a plain old free registered card always gave you the best discount anyway, free soy, free syrups, free shots, do you have any idea how much milk is thrown away because you change your minds after your drink is made, but your never charged for that. try that crap at all these other coffee shops your going to flock to, remember you get what you pay for..has anyone every been charged for whipped cream on a drink that does come with it??? no ! check the price of whipping cream, vanilla, and the charger gas. to make it the next time your in the market..i am a barista and depending on where i am i will get a latte at an idependant, i go in with an open mind, and am always dissapointed, and the prices are the same, if not higher, Dunkin donuts charges 1.00 for a shot of espresso in a coffee, we charge 50 cents

[me myself and I]

The funny thing with the cards is, they WILL get lost. Either Starbucks manages to loose them on the way out the mail room or the mail man will catch them or a neighbor. People will get really freaked out over it. And it is a lot to ask from customers to monitor if they got all the free beverage coupons they are entitled to. I kind of tend to follow up on those corporate promises. But this is a lot of work here. Counting your stars, once you hit 30 you start counting again towards 15, then you wait for your coupon. How long should I wait until I call customer service? A week? two? Then I call, they tell me to just be patient and hope I forget. Too much work for a free coffee. Either they change the system to accumulating stars on the card and being able to redeem 15 points of that balance whenever I feel like it or I'll rethink my Starbucks spending habits. A real punch card would have been more useful here.

[livin' la VIA loca]

So this is totally off topic (pls pardon my vent) but really, out of curiousity about the buzz about this on-line, I just checked out the Sbux Twitter page

And two incorrect responses on other subjects:

Yes, you will hear some Xmas music in Sbux stores now- it is on the Sting CD we're selling and current overhead play soundtrack.

No, we don't sell replacement lids to the plastic Venti Cold To Go Cup; however they will return in the Holiday (not summer) merchandise set- so stock up then!

With all due respect to Brad the Sbux Social Media Guru-

if he's passing out wrong info on the little simple things and he's on the corporate communication team level...

how are baristas expected to accurately explain this complicated card change?!

[BOSTON STARBUCKS REBEL]

I just read the part of the bottom stating that Starbucks Duetto Visa Card members are prohibited from participating in My Starbucks Rewards.

[Parcaso]

Jesus, Cindy
you sound like a huge bitch

[waltie]

"It screws me"

Let's just get one thing straight: Losing a discount and being asked to pay full price is not getting "screwed" by any stretch of the imagination. For the past year, customers have had the opportunity to pay for a discount program that has, unfortunately, run its course and been discontinued. Nobody is being "screwed," you just won't be able to participate in that savings program because it no longer exists.

[Redd]

@Melody - They mail you a paper coupon for your birthday drink, so it's really no different.

- I'm pretty sure that the customers who get the coupons will make sure they don't lose them. Our customers are FREAKS about coupons. Yes, we've had regulars who have forgotten the coupon/treat receipt/Gold Card they would usually have...and guess what? They don't get upset and they get over it. We can't be held responsible for what they forget. We just have to learn to talk to people...like when prices went up and customers were angry with me, I let them know (very nicely) that I didn't personally raise the prices, so there was nothing I could for them. The same goes for a lost coupon.

[me myself and I]

Well, it is really hard for a company to take back a regular discount they were giving in the past. People get used to it and if you take it back you'll lose a whole lot of customers that are upset. You will have to work very hard to get them back or replaced by new customers. I bet they spent way more money in advertisement and free samples to attract new customers that are supposed to replace the lost ones than the 10% discount actually cost them.

And yes, being a duetto card holder sucks these days.

Redd, you are right, it is the responsibility of the customer to not loose their coupon. But in the modern 21st century there are ways to make it easier for the customer. Did anyone think about the cost associated with actually printing and mailing those coupons? it would be so much more environmentally friendly to do it electronically right on the card and it would save on postage as well.

[livin' la VIA loca]

great post here:

http://brandautopsy.typepad.com/brandautopsy/2009/11/no-more-starbucks-gold.html#comments

thanx, john!

[lisa kribs]

what about the WIFI that was single-handedly the best part!?!?!?

[livin' la VIA loca]

@lisa- about WIFI

Under the new program, if you are a green or gold level rewards card holder- you get free wi-fi. So all you current registered gift card or gold card users- you still get free wifi (2 hrs daily).

However, let's say you are not a card holder of any kind and come to Sbux b/c your power/internet is down and you need on-line access. Today, I can point you towards purchasing a gift card for $5, registering it for free at starbucks.com/wifi and instantly you're on your way on-line.

Under the new program- this type of instant online access disappears- you have to make at least 5 purchases with a rewards card before you get wi-fi. In the future, your only option in this scenario will be the AT&T "pay as you".

Or Panera Bread, Barnes & Noble or an indie shop with instant complimentary wi-fi service.

[Viachic]

Does anyone else think that Starbucks no longer wants to be in business?

[Marcus]

Well this was educational. I am a gold card carrier, and go to starbucks several times a week, and always get a num num (as I call the pastries), so the card has been good to me.

I have never however put money on the gold card. Why would I? I carry my credit card anyway, it would take work to put money on the gold card and i would be freezing assets for no reason. I would then have to monitor the amount on the card and add more back periodically. I saw the gold card as a pass. I just hand both cards over at once.

Until @Melody made her point I didn't realize for me to get the new benefits I would have to keep money on the card. Who wants all that work? So I am supposed to go to starbucks.com and put guess how much I'll spend in a month and put money on the card and then hope there's enough on it still when I'm in the store? No other stores do that, like if you get a grocery store member card they don't expect you to put money on it.

I wonder if this is why I couldn't get on wifi the other day. Even though I have never used my gold card as a payment method I have been able to get on starbucks wifi. The other day it told me I had made no transactions in the last 30 days and couldn't get on even though minutes before I had just used my gold card for my discount. Since it's worked for almost a year with me only using it that way I figured by transaction they meant using it during a transaction.

You can't make an exclusive club and then dissolve it a year later. Things are exclusive and special when they last. Big brand names are special after they become fixtures and well known. If you have gold card one year, and then something new the next year no one will trust it to hang around. That's why people like GOLD, it's timeless. It's been valued forever. They should have kept the program, IMO.

[Lee]

@Marcus All registered SBUX cards have had autoload at any $ level or time (every x days) you want for a while now (like several years..).

[Cubical Drone]

Marcus Marcus... a true Gold card "member"... you do know that "exculsive" in this case means you either paid $25 or you got it for free by being a tester or one of the 3 free Gold cards each store was given. The Gold card itself was a test in the first place which is why everything was so seperate in the the begining and until the more current website updates, it was never going to touch the main site.

Even with the current Gold card system, you still need cash moving on or off the card once every 30 days to use wifi.

Marcus, it's not like we don't care, we're just following the punch card demands that we have been getting for years now. Sorry kido, the loudest voice wins and unless you talk a lot on MSI, yours probably wasn't it. At least you automatically get put into the "Gold Level" when your card expires, but otherwise, welcome to the Starbucks Card system.

[jackt]

i'm a gold card holder - bought one last year

seems like a ton of whiners on the board here - when i paid $25 for my card, i knew it was good for one year; starbucks is in fact giving me (and many others from what i understand) MORE than one year's worth of discounts, how is that a rip-off?

what's really hard to take is those of you who got a year + worth of 10% off at no cost to you whatsoever - you were frequent customers before they did that, they gave you tens and perhaps hundreds of dollars in discounts to reward your loyalty, and now you're trashing them and saying you'll never come again? think about that for a minute

about the mailing of the free drink coupons, i asked people in the store i go to, they told me that their cash register system is pretty old and their take is that it's not capable of supporting the new loyalty program, hence the mailing of coupons; i know this doesn't support those conspiracy theories that starbucks just wants them to get lost, etc - i would assume that they are well aware of the add'l costs, etc

take a deep breath, think about what you've saved over the life of your gold card membership and also what you're going to get going forward, without having to pay $25 for it

or keep whining, up to you

[Wagner1959]

I think this is great for me, since you don't have to pay the $25.00 fee, which always bothered me. Now I get the free drinks, plus the syrups and soy free.

[DG]

I, for one, have been a LOYAL starbucks fan for many, many years. However, the latest string of crap from this company is the final straw. They raised their prices amid the worst economic market in 60 years, and now are going to penalize their most loyal customers.

I am hopeful that a major competitor understands how starbucks is disbanding their client base, AND employee moral, but these moves.

I used to always purchase a drink while I surf in their establishment. Beginning Dec. 27, I will bring in my coffee from next door (dunkin donuts) and surf for hours while spending ZERO dollars.

Good luck to the mighty corporate dollar.

[Adamjackson]

I'm a long time reader and long time lover of Starbucks. I started the Christmas Blend Fan Club back in 2003.

I compiled a bunch of info and PHOTOS of the new card I got in the mail. I thought this might help cause there's so much info out there across blogs and the FAQ.

http://blog.adam-jackson.net/2009/12/22/the-starbucks-gold-level-rewards-card-a-review/

[AJ]

I saved over $200 dollars using the Gold Card (i.e., I spent more than $2K at Starbucks in 2009 for everything from office coffee to a couple trips per day). I am VERY annoyed by the discontinuation of the 10% discount program. I do not want a freakin STAR every time I make a purchase ... the "free coffees after 15 stars" program will cut my discount and savings in half.

The only positive for me is a negative for Starbucks ... This will certainly get me "outside the Buck"

[Melody (@AJ)]

@AJ - That's a big conversation on mystarbucksidea.com. Lots of people (myself included) aren't totally happy with the new program.

The link in my name (for this post only), goes to a mystarbucksidea.com blog entry about the new rewards.

[Mark]

New Starbucks Gold Card Sucks!

I spent $2,350 last year on my (10%-Off) Gold Card and think the new “program” is a total scam! And, the fact that Starbucks continues to only show 7 days of activity under their “View Transactions” web button makes it virtually impossible to accurately track the collection of the stars required to receive these supposedly “free” drinks. Please forgive this conspiracy theory, but one can’t help but speculate that this was a very conscious decision designed to overly complicate these transactions and confuse their best customers.