Beware the loyalty scheme rebrand

Let Starbucks and Avios be cautionary tales. The first rule of rebranding a loyalty scheme is not to turn your biggest fans against you.

Like any global brand with its finger on the pulse, one can only assume that Starbucks marketers keep a careful eye on Marketing Week readers’ online comments. So it comes as a surprise that Starbucks has made the same mistakes as Avios, previously AirMiles, when overhauling its loyalty card programme

Starbucks introduced its rebranded scheme, My Rewards, on 5 January and immediately prompted calls of foul play from existing card holders. Despite the coffee company’s vice president of marketing Brian Waring telling Marketing Week that “no-one will lose benefits”, irate customers took to our comment boards and Starbucks’ own Facebook page to protest that they were indeed worse off.

One Marketing Week commenter claimed that changes to the terms and conditions would cost £240 over the year on regular coffee orders. Others complained they could no longer get money off a filter coffee, with that benefit replaced by “customisation” options of no interest to them.

Starbucks appears to have fallen into the same trap as Avios (previously AirMiles) did. It has quietly taken away benefits without appreciating that no-one knows the terms and conditions of its loyalty scheme better than the loyal members who use it. And customers have responded with similar anger.

In any rewards programme, there will always be a group of customers who value most the offer that marketers consider most obscure or least profitable. But when someone invests time and money in sticking with a brand only to have that offer taken away, it will feel like a broken promise.

In a second, your most valuable customers can become your most ardent critics. They will also be the people most likely to voice an opinion thanks to phenomenon informally known as the ‘Marmite distribution’ – only those who love or hate something care enough to comment about it on the internet.

The very reason that databases amassed through loyalty schemes are so valuable is that they contain the details of customers who are likely to purchase consistently and repeatedly. In the competitive coffee market, it should be a cardinal rule to keep these customers on-side. As research by Costa has found, the most frequent coffee drinkers are likely to use more than one brand, so once-loyal customers are likely to take flight, given sufficient cause.

Every marketer knows the value inherent in loyalty scheme data, but that data will become less valuable if you forget that “loyalty” is more than just a marketing strategy.

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