By Waylon Cunningham
Jan 29 (Reuters) - Starbucks will introduce a new three-tiered system to its U.S. loyalty program on March 10, chief brand officer Tressie Lieberman announced at the coffee chain’s investor day on Thursday.
Starbucks' reward program, which launched in 2009, is one of the oldest and largest in the restaurant industry, consultants say. The company reported 35.5 million active members on Wednesday.
CEO Brian Niccol, hired in September 2024, has been focusing on cutting back broad discounts.
"It's through better engagement that we're getting people to be active, not through discounting and couponing, but rather giving people the Starbucks experience," he said in an earnings call Wednesday.
Lieberman said at the investor event that if half of loyalty members do one more transaction per year, it would generate $150 million in annual revenue.
The upcoming three tiers of “green”, “gold” and “reserve” will replace the current scheme which has had no bands since 2019.
Each tier gives loyalty users more points for discounts for every dollar spent. The top “reserve” tier also includes opportunities for paid trips to Tokyo, Milan or Costa Rica, the company said.
Among other new perks is a select day of the month where customization, such as an extra shot of espresso, are free.
Kate Hogenson, principal consultant at the Mallett Group, a brand-loyalty consulting firm, said the best loyalty programs are those that create emotional memories for consumers, such as free products, merchandise or experiences.
She said tiered rewards are more common in the travel industry and are rare in the restaurant industry because it is harder to create a different experience between the tiers.
(Reporting by Waylon Cunningham;Editing by Elaine Hardcastle)
