There are two ways to count loyalty: reward the visit (coming back) or reward the spend (spending more). The debate sounds theoretical. Yet it had its full-scale crash test, run by the biggest loyalty programme in restaurants worldwide.
2016: Starbucks changes its unit
Until 2016, My Starbucks Rewards awarded one star per visit, whatever the amount: twelve stars, one reward. In February 2016, the chain switched to a per-spend model: two stars per dollar, a reward at 125 stars. Rational on paper: align the reward with revenue.
The reaction was immediate and overwhelmingly negative: tens of thousands of protesting customers, the topic trending on social media, extensive press coverage. The grievance was simple: for the average customer, the one who buys a coffee, not a tray, the reward suddenly moved out of reach. The programme had started preferring big bills to regulars.
What the episode teaches
- Customers think in visits, not in euros. "Three more visits and I get my reward": the mental model is immediate. A points-per-euro balance requires a calculation, and what you cannot grasp at a glance does not motivate.
- Loyalty is after repeat visits, not the basket. The behaviour a shop wants to encourage is coming back: spend follows frequency. Rewarding the visit means rewarding exactly the behaviour you want to see repeated.
- Per-spend favours those who were already spending. It redistributes rewards towards big baskets (who would have come anyway) at the expense of regulars, whose loyalty is precisely what the programme was meant to build.
The dimension the story forgets: infrastructure
One last telling detail: one of Starbucks' justifications in 2016 was per-visit fraud: customers were splitting their orders to multiply stars. The problem is real when the visit is measured in transactions. It disappears when it is measured in presence: with Lecy, the minimum delay between two points, set by the shopkeeper, means one visit equals one point. Splitting a bill produces nothing.
And for the exceptionally large basket, no need to change model: the team can add points manually, in two taps on a screen. The visit as the unit, the exception by hand: the best of both worlds, without a giant's infrastructure.