New Customer Loyalty Programs and Missteps – Starbucks Case Study


They say you can fool all the people some of the time, but if you are running a customer loyalty program you had better be careful, consumers are not as easily duped as you might believe. For instance, many retail stores raise their prices for non-loyalty customer card holders, and then give their cardholders what should be the regular price and pretend they are getting a good deal.

Is this what is happening at Starbucks now? Indeed, I am going as a customer I am going to end up getting the shaft with their latest new customer loyalty program. Let me explain, you see, I generally go to Starbucks every day and buy a Venti White Mocha Frappachino. With my current gold card, I save at 10% and that equates to $175.00 per year, plus my free squirts of toffee nut, and hazel nut.

With this new program, I am going to get a free drink every 15 drinks I buy, that is about 24 free drinks per year, at about $4.00 so I will save $96.00, But before I saved about $175.00 to $200 depending on how many lbs. of coffee I bought for friends for gifts. Now, if I subtract the $25.00 for my current gold card, then that is $150.00 savings, now I only get $96.00

Their new plan also has free WiFi, but I already get WiFi due to my card usage, and I don’t drink coffee, I drink Frappachinos, so the “free coffee deals” that they claim come with the new program don’t help me, instead they are hurting a brand loyalist here who has been to some 3,000 of their stores. Thanks a lot. The reality is that Starbucks doesn’t really care about me or their customers, and they’ve recently raised the prices too.

Indeed, this new they also have been up-selling everyone this new VIA Instant coffee, yes, me too, every time I go into buy my Frappachinos. What Starbucks really needs to do is to apologize to their best customers instead of trying to pull a fast one over on them. In fact, this is one more corporate “customer loyalty” case study of how not to do your company’s marketing. So, please consider all this.

Source by Lance Winslow

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