Starbucks Rewards is Brilliant

Within the last several years Starbucks rolled out a loyalty program.  It is a brilliant program. I’m not sure how much others are reading the details, but Starbucks loyalty program stands out for its general lack of transparency on earnings.

It’s important to note at this point that Starbucks can probably get away with many things that other companies can’t, due to the intense loyalty and strength of their brand (Numer 96 on Interbrand 2011).  This aside doesn’t detract from an extremely shrewd move on Starbucks part.

If you look at loyalty programs for any other major brand I can think of, you will find an extremely clear description of how you earn points or miles.

Some examples:

• Southwest Rapid Rewards
• Starwood Hotels
• American Airlines
• Ralphs Supermarkets
• Citi ThankYou Points

Starbucks on the other is very vague and buried in the detail.  From their Card FAQ:

What is a Star and how do I earn one?

You can earn Stars and receive in-store benefits simply by paying for a transaction with any Starbucks Card registered to your account at participating Starbucks stores in the United States and Canada and at www.starbucksstore.com. You will be able to track your Stars online by logging into your account.

There is a sort of clue earlier in the FAQ:

Once you have visited and used your card five times (which earns you 5 Stars), you will move into our Green level, where you will receive the following benefits:

(emphasis mine)

Other clues:

You will receive a Star for each visit to any U.S. or Canadian store that accepts the Starbucks Card and for purchases at www.starbucksstore.com. However, in-store benefits and coupon redemption will only be available at participating stores.

and

Yes, all your Starbucks Card Rewards benefits apply when paying with your phone. All you have to do is register your Starbucks Card and use Starbucks Card Mobile to pay and you will earn one Star every time you use it.

and

What if I purchase two drinks in one transaction, do I earn 2 Stars?

Stars are earned based on each transaction, rather than the number of items purchased in the transaction.

At its heart the Starbucks loyalty program plays on a few tried and true loyalty approaches:

1. Free X after Y visits (in this case free drink after 15 visits)
2. Level-ups based on frequency (Green after 5 visits/year, Gold after 30 visits/year)
3. Additional amenities by level (free refills on green, special offers on Gold, etc.)

They don’t, however, go all out like other major loyalty programs in emphasizing the earnings. They do emphasize rewards.  This is the part that’s brilliant.  You are focussed on just continuing your everyday and earning stars not points.  You earn more stars and good things happen.

I also believe that this will provide additional opportunities for Starbucks management to tweak the program in the future, without causing the typical confusion and frustration (complaints) of the program participants.

What do you think? Is the Starbucks program smart?

The real question is: When will Starbucks add Platinum for people who go way too much (like me)?