Starbucks is going to make a controversial change to its rewards program and some customers are going to love it

on Tuesday, Starbucks announces its quarterly earnings, and, unlike many other companies right now, things are going great. Despite the effects of inflation and the threat of a recession, the company beat expectations and reported sales grew 9 percent.

Starbucks seems to have avoided the problems other restaurant companies are facing, as its customers continue to spend money on coffee drinks — especially iced and frozen drinks. That’s good news for third-time founder and CEO Howard Schultz.

I think, technically, Schultz is the ‘interim’ CEO this time around, but that hasn’t stopped him from launching a “reinvention” of the coffee-chain. As an example, Schultz announced that in the coming times of the company investor dayIt will make major changes in its rewards program.

“We are working on a very exciting new digital initiative that builds on our existing industry-leading digital platform in innovative new ways that are all centered around coffee and most importantly, loyalty, which we will reveal at Investor Day, Schultz said during the call.

The company’s Starbucks Stars rewards program is, by all accounts, a huge success. The company has mastered the art of simplifying rewards for spending money in its coffee shops. Based on the company’s results, it seems to be working.

I’m not sure why you’d want to mess with a good thing, but it appears Starbucks can’t resist getting in on the latest craze. Schultz explained:

We are confident that this new digital Web3-enabled initiative will allow us to build on the existing Starbucks Rewards engagement model with our powerful spend to earn Starbucks, while also creating an emotionally engaging, emotionally engaging customer base of our digital third-place community. Will also introduce new ways to expand and make a wider offering. The set of rewards, which includes a one-of-a-kind unique experience you can’t find anywhere else, integrates our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and community building element.

There’s a lot to unpack in that quote. First, Starbucks says it’s launching a “new digital Web3-enabled initiative.” This is a risky move for a brand like Starbucks. Web3 is controversial, to say the least.

Mostly that’s because – for a lot of people – web3 is synonymous with crypto, which is basically a scam at this point. That doesn’t mean there aren’t things going on in the Web3 world other than crypto, it’s just that anyone who isn’t thinking of stopping at Starbucks on the way to drop the kid off at football practice, among them thinking about someone.

Plus, there’s another group of customers who would probably like it. The key phrase is “digital collectibles”. Or, put another way, Starbucks is getting ready to include NFTs in its rewards program. Instead of cashing in stars for a free Grand Carmel Frappuccino, you can exchange them for something less useful, well, like a digital representation of frozen coffee stored on the blockchain.

The goal — for Starbucks — is to create “new ways to emotionally engage customers.” That’s the whole point of Starbucks Stars in the first place. And, it’s a great strategy.

One of the most powerful things you can do to build brand loyalty is connect with your customers emotionally. Starbucks has always been about more than just selling coffee. It has always been about creating an experience – a feeling – a feeling.

The thing is, feelings go both ways. There are few things that generate emotion as strongly as web3. Some people do not like this step at all. That’s a risk Starbucks is willing to take.

The opinions expressed here by columnists are their own, not those of