Starbucks revises loyalty program to spur per-visit spending

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Starbucks has announced changes to its My Starbucks Rewards program, increasing incentives for loyalty customers to spend more per visit.

Changes to the program—which will now be called Starbucks Rewards—include offering customers two rewards points for each dollar spent at Starbucks and reducing the number of rewards levels from three to two.

Loyalty program members previously earned one point per visit, regardless of how much they spent. The rate at which customers earn rewards will remain about the same, as guests will earn their first reward after spending around $60, Matt Ryan, Starbucks’ chief strategy officer, told analysts via conference call Monday.

A “small percentage” of customers will see an increase in the pace at which they receive rewards, while others may see a decrease, he said. 

Tying rewards points to dollars spent was the No. 1 request Starbucks received from customers, execs said. Points can be redeemed for any item on the chain’s menu. 

They noted that the switch, which will roll out in April, should also hasten transaction times, as rewards customers had been known to break up their purchases into separate transactions in order to earn more points.

The new rewards program is one of the primary reasons Starbucks' comps are projected to grow at a higher rate than usual in fiscal 2016, Chief Financial Officer Scott Maw said.

Though execs said loyalty program members spend three times as much at Starbucks as non-members, fewer than one in six of the chain's 75 million monthly U.S. customers are currently members. 

The chain recently announced partnerships with Spotify, The New York Times and Lyft to provide additional incentives to rewards customers. While execs were mum on upcoming partnerships, they said the new program structure opens up more categories for future incentives. 


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