Starbucks’ decision to begin rewarding its loyalty program members on the basis of dollars spent, rather than number of transactions, is getting a chilly reception in its early days, according to data from YouGov BrandIndex.
In the first eight days after the change was announced on Feb. 22, the brand perceptions of Starbucks’ customers as measured by BrandIndex’s “buzz” score plunged by more than 50%, from 60 to 29.
The results reflect daily surveying of 4,500 adult Starbucks customers over the last seven weeks. For the buzz score, respondents are asked: "If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?" A score can range from 100 to -100, with a zero score indicating a neutral position.
Starbucks’ move to a dollar-based rewards system (like those used by most airlines) also appears to have depressed purchase consideration among current customers.
Since Feb. 24, the number of current Starbucks customers saying that they would consider making their next purchase at Starbucks has declined from 80% to 71%, reports YouGov.
Starbucks seems to be risking alienating customers who make frequent but lower-ticket purchases, but likely has reason to believe that it will ultimately benefit by pleasing higher-ticket customers, YouGov BrandIndex CEO Ted Marzilli pointed out.
Matt Kates, VP of strategy and insights for digital marketing solutions company HelloWorld, predicts that the initial disgruntlement will prove to be but a tempest in a coffeepot.
The shift to dollar spend will “better align reward economics to consumer spend, enabling more flexibility with how the brand engages and rewards its members,” Kates tells Marketing Daily.
And moving from requiring 12 “stars” to requiring 125 in order to earn a free item gives Starbucks greater flexibility to offer targeted bonus opportunities that motivate incremental behavior and ultimately increase loyalty, he says.
Furthermore, Kates argues, “Starbucks treated its members with respect by being proactive and transparent in communicating these program changes. Any backlash will be short-lived, as consumers adapt and experience the benefits of the redesigned program themselves on a day-to-day basis.”