No room for milk... Starbucks shares overflowed to a record high after its earnings report. We were most interested in potential drama behind its latest loyalty program changes. But Starbucks first shared some personal updates:
- It's bringing back the S'mores Frappuccino.
- The 30,000th Starbucks just opened (in Shenzhen, China).
- And it's investing $100M into a food/packaging-focused venture capital fund, probably to find the elusive spill-proof lid.
- The "Starbucks Rewards" loyalty program now accounts for 40% of all transactions, so we jumped into its details...
Remember February 2016?... We do. Starbucks tweaked its reward points from per-visit to per-dollar-spent perks. People vented. Aggressively. This month, Starbucks tweaked the program again — Drama-free this time. Participation jumped 13% from last year to 17M members.
The future of rewards programs is smaller perks but more often... Airlines are doing away with biz class upgrades, offering drink vouchers instead. Looking at Starbucks' new program, it's the same thing — Rewarding you more often with smaller gifts. Here's the system that keeps us just caffeinated enough:
- It now takes 150 Starbucks Stars (=$75) to earn a free drink, not 125 (=$62.50).
- But along the way, you now get "flexibility benefits" of free vanilla or espresso shots.
Smaller perks. More often.