About 14 months ago, Starbucks launched a program called a Gold Card. Under the 2008-2009 version of the Gold Card, officially announced in October, and available for customers to purchase as of November 4, 2008, customers paid $25.00 annual fee to receive ten-percent off all their purchases for the year. Click here for the official Starbucks press release about the 2008 version of the Gold Card. Additionally, customers received various coupons in the mail, available only to Gold Card holders. This was a fabulous program for the highly loyal customer buying multiple items at a time, and frequenting Starbucks perhaps a dozen a more times in one month. For the infrequent customer who came in, bought a soy latte, once in a week, this offer made no sense. Unfortunately, only about 20% of the Starbucks customer base falls under the "super regular" category, though they spend in numbers far in excess of their 20 percent proportion of total customers. Most people paid $25 for the Gold Card. Three very small groups of customers received free Gold Cards from Starbucks. (See USA Today article about Gold Card). First a few thousand customers were sent Gold Cards early - presumably the highest spending group of customers. Second, stores received three Gold Cards that the store manager could give away to a favorite customer. Third, a very very tiny group of customers who were highly loyal mystarbucksidea.com participants received their Gold Card free for their loyal participation at mystarbucksidea.com.
Overwhelmingly, hundreds of thousands of people paid $25 for their Gold Card. Starbucks has never told us how many people bought the card, but I've often guessed that the number was above half a million but below one million.
For many people, their Gold Card discount of ten percent off their purchases comes to an end on January 5, 2010. Starbucks is eliminating the old version of the Gold Card in favor of a new version called "My Starbucks Rewards". Your Gold Card discount ends one year from purchased and activated, or January 5, 2010, whichever is the later date of the two. However, in all cases, the old version of the Gold Card with ten-percent discount ends on December 31, 2010.
The new version of the rewards program allows participants to collect "stars" per transaction, and upon reaching 15 "stars," the participant is mailed a coupon for a free beverage.
The new version of the program consolidates the previous registered card rewards (free soy milk, free syrups, 2 hours of wi-fi, tall drink when buying one pound of beans) into one card. No longer does anyone have to carry two cards.
Of course the obvious problem with the new program is that the reward is a "per transaction" and has no relationship to dollars spent. Thus, there is now a disincentive to grab a second item at the register. In addition, the best case scenario is a delayed beverage coupon. Some will get lost in the mail no doubt, forgotten, destroyed... you name it. The new program is still a great program for the group of customers who don't buy very much and just want their tall soy vanilla latte and to be in and out the door. However, the new program is a definite step down in benefits for the "super regular" group of customers.
For more conversation on the new My Starbucks Rewards, be sure to visit the Starbucks blogs. There have been 3 official blog posts about it:
- October 30, 2009 - Introducing My Starbucks Rewards
- November 6, 2009 - In Response to Your Comments on My Starbucks Rewards
- December 24, 2009 - My Starbucks Rewards - Your Ideas!
On a personal note, I've been a Starbucks customer long enough that a change of reward programs isn't going to make me stop going to Starbucks. I don't change my stripes so easily. I was around long before anyone dreamed up the idea of a ten-percent discount, and I will be around afterward. One single year of a ten-percent discount after being a customer for about 18 to 20 years (I don't remember when I first found Starbucks but I moved to Seattle in 1989) represents just a "fluke" year in my history. The new program will perhaps help me control how much money I spend at Starbucks since there is now a reason not to grab a second item at the register. No more buying 8 pounds of coffee at once and using it for twitter contests: The new program will reward a large purchase still with "one star" unless the register barista rings each item separately, which is only going to cause headaches at the register. In an odd way, I'm looking forward to Starbucks giving me a reason to spend less. I spent more, sometimes to excess, with the ten-percent off discount. 2010 will be the year that StarbucksMelody doesn't spend so much at Starbucks.
And now, the doors open to your comments on the new My Starbucks Rewards program...
P.S. I had a previous blog post on My Starbucks Reward when it was first announced. Click here for the previous blog topic.