Reversing a change made six years ago, Starbucks is replacing its popular one-tier rewards program with a three-tier platform in a bid to better reward bigger spenders and encourage more visits.
In 2019, the coffee giant shifted from a two-tiered system to a single system that allowed all members to earn and redeem Stars and cash in on rewards (i.e., food and drink freebies) immediately after joining the program. Previously, members could only start redeeming rewards once they accrued 300 Stars (spent $150 in the year).
The change to a single system was meant to encourage new members to become more engaged, although the changes miffed those who had committed to accruing 300 Stars.
The updated three-tier program skews bigger reward benefits to more frequent customers, seeking to better incentive customers to reach higher status levels.
“Our current program has a one size fits all approach, regardless of whether you use it once a year or once a day,” Starbucks global chief brand officer, Tressie Lieberman, said in an Investor Day presentation, according to Nation’s Restaurant’s News. “Listening to feedback, we saw a huge opportunity to make the experience more personal and more engaging. We also saw the opportunity to drive spend frequency through tailored benefits and focus discount dollars on what our members value most.”
The three tiers include:
- Green (members accruing fewer than 500 Stars): Enjoy a free drink or food item on their birthday, receive early access to select menu items and get personalized offers. Stars won’t expire for six months and can be kept from expiring in several ways, like redeeming a reward or making a purchase. Members earn 1 Star per dollar spent and can earn Stars faster by digitally reloading a Starbucks Card.
- Gold (members accruing with between 500 to 2,500 Stars): In addition to Green tier benefits, Gold members’ Stars never expire, and members earn a seven-day window to redeem their free birthday treat. Gold members earn 1.2 Stars per dollar spent and receive at least four additional Double Star Days annually.
- Reserve (members accruing over 2,500 Stars): In addition to Green and Gold tier benefits, members at this level receive a 30-day window to redeem their free birthday treat and at least six additional Double Star Days annually. They also gain access to exclusive merchandise and curated events, including all-expenses paid trips to exciting destinations like Tokyo, Milan or Costa Rica to explore coffee culture. Reserve members earn 1.7 Stars per dollar spent.
In fiscal 2025, transactions linked to the rewards program accounted for 60% of Starbucks’ revenue.
Loyalty experts said tiered programs can drive repeat purchases and foster long-term brand loyalty, but a major downside is the added complexity. Zsuzsa Kecsmar, chief strategy officer of Antavo AI Loyalty Cloud, wrote in a Forbes column, “Introducing multiple tiers can sometimes confuse customers, especially if the tiers aren’t unique enough or the benefits and requirements are merely incremental.”
Tiered programs can also be expensive to maintain. Kognitiv, a provider of loyalty solutions, wrote in a blog entry, “If the cost of rewards outweighs the benefits of increased customer engagement and spending, you may need to rethink your approach.”Other suggestions include ensuring each tier has enough differentiation to incentive members to reach higher status levels as well as having the top tier feel exclusive.
Said Mastercard, “If that top tier gets too crowded with new members, adding another lower tier will help avoid the perception of diluting premium status.”
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