Close
 

A storm in a coffee cup

  • Opinion
  • April 19, 2016
  • Ben Goodale
A storm in a coffee cup

So Starbucks have created a bit of a stir in the last few weeks with what looks like a badly signalled and poorly executed loyalty programme change.

Starbucks describe the change as follows: “It’s an exciting new program that gives members more stars awarded based on what you buy, no matter how often you visit.”

I love it. Because our own work in loyalty and rewards in the QSR sector, and all the data we looked at, demonstrated that above all else you want to drive frequency of visitation. Spend will follow, and there are entirely different tactics for that.

It’s interesting the storm this has caused – even to the extent that one clever person has created an online programme to show you simply based on what you regularly buy how much longer it is going to take to earn a reward than it used to (check it out here). In my case, I used to have to visit 12 times to get a free drink, now apparently it will be 36 visits! Crikey. The passion that is involved in doing this tells you a lot about the way that a successful loyalty/rewards programme can become a critical pillar for why you buy from brand X rather than brand Y, why you visit regularly. And the impact of miscalculating the equity of this in the mind of the consumer.

So what are Starbucks thinking ? You would assume that they have done the math. They do indicate that there are more ways than ever before to earn stars (after all it is not visits now, it’s how much you spend) and that you can earn partial stars so your micro spend isn’t lost.

In their data modelling, you would expect that they would have worked out the value to them of the potential loss in frequency, compared to the motivation of the value gain. But I’m struggling with this compared to our experience. You want people in the door. They will buy what they want – it’s much harder to motivate people in that sort of environment to want to spend up to get an extra star – it’s coffee and cookies after all!

Time will tell – the Starbucks loyalty programme has been a big success historically, with over 12m members, and held up as one of the best in the world. This change doesn’t feel right – it feels like the accountants have got hold of it and looked at the wrong metrics – but as in all these things, their data modelling and research may have told them it’s the right thing to do. But what accountants often miss is the emotional aspect of a programme which plugs into a quite different set of drivers of loyalty and visitation, one which the marketers need to identify and defend before it is too late – with customers disconnecting with the brand.

This story originally appeared on justONE's blog.

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Military-style semi-automatics ban announced

  • News
  • March 21, 2019
  • The Register team
Military-style semi-automatics ban announced

As of 3pm on March 21, a wide range of semi-automatic weapons have been reclassified under section 74A(c) of the Arms Act as requiring an E endorsement on a firearms license. This means they can no longer be sold to those with A-category gun licenses, and their purchase now requires police approval.

Read more
 
 

Retailers gather for insights at NZ Retail and The Register's breakfast

  • News
  • March 21, 2019
  • The Register
Retailers gather for insights at NZ Retail and The Register's breakfast

NZ Retail and The Register’s sales and marketing breakfast saw dozens of Kiwi retailers come together to network, sharing tips and tricks and absorbing expert advice.

Read more
 
 

Who stole Christmas?

  • News
  • March 21, 2019
  • Kelly Withers
Who stole Christmas?

Results are starting to trickle in from Christmas 2018/2019, and for many retailers, they're a little disappointing. Paydar chief executive and co-founder Kelly Withers explores the data.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Chinese businesspeople raise millions for Christchurch victims

  • News
  • March 21, 2019
  • Radio New Zealand
Chinese businesspeople raise millions for Christchurch victims

A group of visiting Chinese businesspeople have raised $2.35 million for victims of the Christchurch mass shooting.

Read more
 
 
News

The Retail NZ Awards: What does it take to be a winning retailer?

Take this time to shine with the upcoming Retail NZ awards, a chance to show the retail industry what makes your business stand out. No ...

 

Hunting & Fishing New Zealand voluntarily pulls military-style assault weapons from sale

  • News
  • March 20, 2019
  • Sarah Dunn
Hunting & Fishing New Zealand voluntarily pulls military-style assault weapons from sale

In the wake of the attack on Christchurch’s Muslim community on March 15, strong calls for changes to New Zealand’s gun last have been made. Trade Me was the first retailer to act, halting the sale of all semi-automatic weapons on its platform, and it has now been joined by Hunting & Fishing New Zealand.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}