Loyalty Programs: Ports In A Storm
by Joshua Tretakoff | VP, Account Management
Interesting comments from Starbucks’ Howard Schultz today, as he continues to try to re-invigorate the brand. The latest move? The launching of a loyalty program, offering “free coffee refills and two hours of free wireless Internet service. Card customers will be able to customize lattes for no extra cost, too.”
This move, following on the heels of the earlier efforts they expended to retrain their baristas on the quality of coffee brewing, and their newfound commitment to espresso machines that allow for more eye contact between the barista and the customer, clearly show a commitment to getting back to appealing to their core customer. With Starbucks’ explosive expansion, and the subsequent perceived decline of the brand, this storm is clearly hitting Starbucks hard, and the CEO is taking decisive action to protect his core assets.
What’s interesting is Starbucks used to be a leader in appealing innovations to their core customers, and they had the means to do this before. In fact, with their Starbucks Cards, they actually were fairly good pioneers at using “surprise and delight” rewards for frequent card users, but never published the benefits explicitly. Granted, they are now playing catch-up, but they are doing the right thing by using a loyalty program to shore up their base while they expend additional efforts to recapture their leadership position.
Good move, and never count out a caffeine-fueled business on their drive to succeed. 
