Starbucks (SBUX, $71.50) revamps loyalty program to woo customers

American multi-national coffee giant, Starbucks, recently announced it is revamping its rewards program, a decision in-line with the company’s strategy to bring even more people into the program by offering more choice and by being more attractive.

Starting April 16th, the coffee company's rewards members would start earning reward points sooner and would also have more options when redeeming points. Presently, this program reward program would be applicable for its customers in the United States and Canada, and with time would be rolled out in other locations also.

The rewards program is not only expected to please the company's super-loyal customers, who account for nearly 40% of sales at U.S. stores. It is also expected to help the company learn more about their customers.

Currently, the rewards program gives its customers two points or stars for every dollar they spend. But a customer needs to hit 300 stars within one year in order to start qualifying for rewards. Once qualified for rewards, the customer can get a free drink or free food for every 125 stars. However, if the customer holds on to the points until they reach 250, they can redeem the points for two free drinks, two food items or one of each.

Under the new rewards system, customers would get different rewards for different amounts of stars, and it starts at a lower tier also. Members can cash-in 25 stars for an extra espresso shot, dairy substitute or another flavor pump. For 50, one can get coffee or tea or a bakery item, and so on.

According to the company’s chief marketing officer, Matthew Ryan, an enhanced flexibility would enable the company to serve more types of customers. Presently, Starbucks Loyalty Rewards program has ~16 million members and has seen 25% membership growth in the last two years.