Despite these changes, and the negative social media chatter, rewards membership hasn’t declined. In fact, on earnings calls, Chipotle reported an increase of one million rewards members between its second and third quarters of last year. Starbucks also saw a 16% increase in rewards members in last year’s fourth quarter.
Why do members continue to rack up points, even when they’re disappointed with the system? According to Polutnik, one psychological concept at play is the “switching cost”—in other words, these loyalty programs create a reason for customers to stay consistent. “If you already have I don’t know how many points with Chipotle or Starbucks, then you are a captive audience,” she says. “You want to get your value because you’ve already gotten x number of points.”
Whether Starbucks is adding or subtracting perks, Viet Pham, a 19-year-old student in Kentucky, remains mostly interested in earning Stars to redeem for drinks. “I like the fact that there are so many opportunities to get Stars, and different ways to use them,” they say, referring to the games and challenges that are occasionally available to Rewards members. “Instead of paying upwards of 7 dollars for a venti hot pumpkin spice latte with oat milk,” they say, describing one of their hacks to get the most Stars value, “I can get a Caffe Misto with oat milk, whipped cream, 5 pumps of pumpkin sauce, and the Pumpkin Spice topping for 50 Stars.”
Ryan Burgess, a 30-year-old Chipotle Rewards member from Atlanta, feels similarly. He bypasses rewards like free merchandise in favor of free food. “It’s all about saving for the next burrito for me,” he says.
“I don’t think that I would ever leave the program unless Starbucks was revealed to have been doing something awful,” Pham adds.
It turns out most customers may not really care about the rewards wars at all. As they vye for customers’ attention, restaurants are taking bigger swings—offering more and more outlandish perks to loyal fans—and straining to, if not retain customers, perhaps at least garner some recognition in the form of press or social media engagement. But every single rewards member I spoke to told me that they’ve stayed with these rewards programs solely for the added value from purchases they’d make anyway. For a population that is both savvy and inured to marketing ploys, click-baity rewards campaigns don’t hold much interest.
So what’s an extra perk customers do care about? Something far less tangible than free food (or even NFTs).
When they are well-executed, loyalty programs can feel like more than a path towards getting free stuff. They can feel personal, as if customers belong to something bigger. As Polutnik explains, they build “a relationship.”
And for many customers, that feeling of being recognized and known, even by a corporate giant that’s only wishing you happy birthday because it wants your money, is powerful. “Like if someone kidnapped me and threw me in the river. [A Dunkin’ Donuts worker] would probably notice if I didn’t show up for a few days,” Gondelman, who plans to remain a Dunkin’ Rewards member, says. “It does make you feel very seen.”