Change

Facing the Future-comprehensive plan for change

Over the last few years, Starbucks has implemented a “My Rewards” card program that offers patrons free merchandise and beverages based on reaching a reward level as a result of a specified number of transactions. However, the program has also received a great deal of criticism from consumers and should be improved in order to achieve its original goal. By analyzing the problems in the current program, a number of strategic changes are proposed here to enhance its effectiveness and visibility among consumers.

4.1 Current situation

Major complaints related to the program are listed below:

* Consumer must “pre-load” cash onto the card in order to receive rewards.

* Card requires a $25 purchase in order to receive 10% off

* Reward levels are based on number of transactions, rather than dollars spent.

* In some cases, a consumer can receive a card only directly from the store manager

* No system to periodically check balance and usage

* No advertising to support program.

4.2 Proposed change

Starbucks should consider a complete overhaul of their “My Rewards” program. The exact structure of the program would only be determined after a thorough research effort in order to ensure the card program helps to improve customer affinity. Some proposed changes could include:

* Hire a third party vendor to administer the program

* Deliver rewards based on money spent or transactions depending on individual customer profile or preferences

* Create a “My Reward” online presence to allow customers to check balances and progress towards rewards and manage their accounts.

* Install kiosks in each store location that will enable customers to check balances in the store. If a customer is eligible for a reward, the kiosk will allow the customer to order a “reward drink” and then pick up the drink at the bar without having to stand in line.

* Support re-launch of the program with a...