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Future of Starbucks' loyalty program offers more ways to earn stars

On Wednesday, Starbucks (SBUX) executives gathered in New York City for the company’s investor day event. During the presentation, the coffee giant unveiled plans for new stores, new products, and future changes in its rewards program.

The Starbucks rewards program of the future will probably include multiple redemption tiers, said Matt Ryan, chief strategy officer of Starbucks, at the conference. Currently, “gold” is the only status level beyond the basic membership. Future changes to the program will also expand how customers can acquire stars.

“We finally have the ability to take stars beyond retail stores,” he said. “We can now put stars on products like K-Cups and we’re going to be piloting doing it on our ready-to-drink products as well.” For K-Cups and ready-to-drink products, customers will be able to earn stars by acquiring star codes off of the packing. (As of now you could earn stars for anything you buy in the store.)

Starbucks caught some heat in April when it announced a new loyalty program, which would reward members with stars based on how much money they spent. The old program awarded stars based on number of visits. The new system had some customers promising to boycott Starbucks, but the company says it hasn’t seen a change in coffee habits. In fact, the Seattle-based retailer currently has 12 million members in its rewards program, an 18% rise year over year.

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“The program transition is successful and complete,” Ryan said. “We have a 94% retention rate, which is stronger than it was prior to the switchover in the program. It’s fairer and customers like the program better, unequivocally.”

Tweaking the program also came with a change in the functionality of the app, making it easier for Starbucks to target offers to specific customers. In October, the company started supplying personalized one-time offers through the app. These offers give members a chance to earn points faster, and are uniquely generated based on individual customer behavior. In November, Starbucks began to roll out personalized suggestions and recommendations for purchases during checkout. This process will continue through 2017.

One of the biggest changes for loyal Starbucks visitors is the coming introduction of a Starbucks Rewards Visa Card with Chase Bank. This prepaid debit card will be reloadable and give customers the chance to earn rewards for all purchases made wherever Visa is accepted. Rewards can only be redeemed at Starbucks. The card will launch within a year.

Brittany is a writer at Yahoo Finance.

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