Scatterlings: Starbucks' bait and switch clobbers its most loyal customers where it hurts the worst
I like Starbucks coffee. I don’t love it, and I’m not crazy about the prices, and sometimes the barista standards slip a bit, what with the relatively fast staff turnarounds…
Overall, though, I like it. And, truth be known, I am a bit of a caffiend. If there were a Continental Coffee or an Abruzzo Cappuccino or a Joe’s Cafe or even a J J Bean or Caffé Artigiano near work, I would be lining up there every morning.
But, essentially, the three blocks on West Broadway from Granville to Burrard contain a Blenz, a Tim Hortons, and a Starbucks, and that last one is right across the street.
Starbucks has experimented a fair bit over the years with “loyalty” or “rewards” incentives to try to both maintain and boost market share. Some of them have been good (free refills on brewed coffee, discounts, etcetera), but some of the tweaks to the programs haven’t been so good.
Especially the latest, billed by Starbucks in an emailed news release, somewhat misleadingly, as “Rewards are coming to you faster”.
A few years ago, you used to be able to buy a Starbucks “gold card” for $25 (as opposed to the regular “loadable” cards). That entitled you to, among other perks, a 10% discount on purchases and free flavoured syrups and soymilk, for which the chain normally charged extra. If you drank a lot of Starbucks coffee, that in itself was a considerable savings over the course of a year and more than paid for the cost of the gold card.
That discount was yanked on Boxing Day 2009 in favour of the “My Starbucks Rewards” program. With this, if you registered your in-house loadable card online, you were issued a personalized gold card after 30 drink purchases, the free-flavoured-syrups and soy benefit continued (valuable if you, like myself, enjoy an occasional vanilla latte), and after every 15 drinks you received a free one.
That worked out to only about a seven-percent discount, compared to the 10-percent previously, and you actually had to purchase (including the first 30 to become eligible) 45 drinks to start receiving the free ones.
A bit of a bait and switch, really, but no one was forcing you to continue or jump in.
However, that’s about when I bought in, basically, because soon after that, the Seattle-based chain also announced an across-the-board price hike. Not huge, but enough to make me consider shifting to another java supplier or cutting back my intake.
I realized that I could negate the increase by receiving the gratis vanilla syrup (50 cents) in my lattes and getting a freebie after every 15th buy.
Now, with its latest changes, the incentive bait and switch becomes even clearer. Effective October 16, 2012, the free syrups and soy are cut off. Also gone is the free drink when you bought a pound of the whole-bean coffee.
But the chain is trumpeting “Hello, faster rewards” in its bumf for this latest cash grab, focusing on the fact that the free drink now comes after just 12 purchases, instead of 15.
Big hairy deal. Like Bill Clinton says, do the math.
If you are a gold-card customer and you buy a venti-sized vanilla latte once a day, five days per week, that’s an annual outlay of $1,237.60. After October 16, that will cost you $1,383.20.
The “Hello, faster rewards” just cost you $145.60.
And as far as the “faster” part goes, your freebie every 15 drinks used to get you approximately 17 bonus drinks per year (based on one latte per day, five per week); the increased frequency (at the same purchase rate) nets you 21 of those annually. That’s a $21.28 bonus, so even with that subtracted from your new, improved yearly cost, this latest example of greedy grabbing will still cost you an extra $124.32.
That’s rewarding loyalty?
No, it’s a price increase disguised as an incentive, and the chain is taking it out of the hides of its most loyal customers.
I’m hoping—no, betting—that this has a negative impact on Starbucks’ bottom line. Why am I so sure? Because I’m definitely cutting back my purchases there from now on, and if a coffee freak like myself is considering this, there must be many others doing the same.
Hello, Tim Hortons?