278. How Starbucks Leverages Behavioral Economics (and you can too) (Refreshed Episode)

Welcome to episode 278 of the Brainy Business Understanding the Psychology of why People Buy. Today's episode is all about the behavioral economics of Starbucks. Ready? Let's get started. You are listening to the Brainy Business podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer. Palmer hello. Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. Today's episode is a behavioral economics analysis of Starbucks. I'm a Seattle girl and I love me some Starbucks. So it's fun to refresh this episode, which was one of the first and most popular behavioral economics analysis episodes I've ever done. It's currently the 11th most downloaded episode of the show of all time and with 277 episodes to date, that's a pretty big deal. If you aren't familiar with this format, it's an episode where I talk about a well known company and their practices to share what concepts from behavioral economics and behavioral science are in their work so you can see what you might want to emulate and what isn't a good fit for you in your company. And I really love these because it's a fun way to see things you experience all the time and say, oh yeah, I totally did that to help you remember a concept and for it to feel real and to to see how you might replicate that yourself. Or again, to see something that you don't want to do and understand the behavior behind it or why it might have been happening. So why this episode from late 2019 and why now? Well, it's because of the loyalty program Star Rewards Anyone. And this coming Friday's episode where I'm joined by Lauren Kemp and Steven Springfield to talk about how they created an irrational loyalty program at McDonald's during the pandemic. It's a fascinating story with lots of insights for you to learn. So if you haven't already subscribed to the Brainy Business podcast, now's a good time so you can be sure you don't miss it when that comes out in a couple days. So today I wanted to share an episode that showcased another loyalty program where I think they're doing a lot of smart things that are different from the traditional punch card approach to loyalty. And good news, there's a lot more to this episode that I know you're going to love. Now, before we jump in, I want to be sure you know there are links to related past episodes, many of which came out after this one, including behavioral economics analyses of Starbucks and Peloton and Amazon and Disney, some real fan listener favorites, so check those out, as well as related books and articles. It's all waiting for you in the show notes for the episode, which are found within the app you're listening to and at the brainy business.com278 all right, let's talk about Starbucks. If you've been listening for a while, you know I love Starbucks. Not just for their chai tea lattes and marshmallow Dream Bars or because I live in Seattle, but because of the amazing things they've done as a company to shape the world we live in today. Starbucks is a dynamic and large company with a plethora of examples I could have chosen to talk about today. There isn't time for everything and instead I've picked some of my favorite pieces for the episode, ones I think you'll find valuable and interesting and be able to apply to your own business, whatever that may be. Whether you work for a global company like Starbucks, are a solopreneur or an academic, or somewhere in between, you can learn from the smart things the business has done and how they've understood human behavior. In the episode, we're going to dig into their Star Rewards program as well as feature drinks and products from PSL to the Unicorn Frappe, as well as the coveted red cups which just launched a couple days ago. By the time this comes out, the personality and overall brand choices in their logo locations and on social media and of course pricing. In fact, I want to start there with the original brand and pricing because without it, Starbucks would be just another coffee shop, one of thousands instead of the one that now has over 30,000 locations in 76 countries around around the world. The company has been seeing great growth in its locations as well as in grocery stores where you can now buy Starbucks branded coffee creamers, cold brews and Nespresso pods. We have to ask how'd they do really is an amazing feat when you think about the commoditized industry Starbucks was facing before it launched its first store. Coffee was just coffee, a drink you had at home and at the office, a boost of often burnt or cold liquid or both that you didn't doctor up too much. And it was cheap or at least very reasonably priced even when you went to a coffee shop. Simple cups of black coffee with the options of cream or sugar. And that's pretty much it. Maybe you got fancy and had a cappuccino or A mocha. And if you went to the carts outside the grocery store, they had a few special flavorings you could add in for a little something more. I remember when I first learned how to order a Milky Way from my friend's mom by having them mix in caramel and vanilla syrup. Or you could also add in hazelnut for a Snickers. It was amazing. My life was forever changed. This was of course, before there was a Starbucks on every corner. And people don't even need to know tricks like that now. One of the big aspects Starbucks had to overcome was the pricing anchor I've linked to episode 11, anchoring and adjustment in the show notes for you, essentially the first number you hear or a standard price is the anchor, and the brain adjusts from that to determine what is reasonable. When every cup of coffee out there is 50 cents or a dollar four for a coffee would have been outrageous. It should have been outrageous. It shouldn't have worked. Or at least it wouldn't have worked if Howard Schultz had approached it in the usual way. According to a Fast Company article I've linked to in the show notes, Howard Schultz used to say, if I went to a group of consumers and asked them if I should sell a four dollar cup of coffee, what would they have told me? Of course, everyone would have said no way. Just like people said they would never buy or have use for an ipod. The way we act is driven by our subconscious. And when you ask a logical question to the conscious, it doesn't always answer in a way that reflects behavior. In fact, most of the time it doesn't. To justify a higher price and setting a new anchor, Starbucks needed to invent a new category. This wasn't just about coffee. It was creating community, a third place, as they call it, an experience that was something more. According to Stanley Haynesworth, former vice president of Global Creative at Starbucks, this was a very conscious attribute of the brand and it factored into every decision they made from who they chose the furniture for and other aspects of the ambiance, including music and the art on the walls. Because Starbucks looked at their commoditized industry in a new and different way, they were able to set new price points, new and anchors. The problem every other coffee shop had was looking at their industry in a myopic way. They were too close to the situation, which is a problem most businesses have. This also gets to the concept of functional fixedness, which I talked about on episode 53 on our lazy brain biases. When all you have is a hammer, everything looks like a Nail. When you're looking at the traditional model and say, well, Joe's is 55 cents and we're only 50 cents, so people will want to choose ours. The anchor of what everyone else is doing, herding, is keeping those businesses stuck. When you look at what everyone else is doing and say, this is a commoditized industry, it can never really be more than that for you. What Howard Schultz and Starbucks did is step back. And this is the tip your company should take most from their story. They got out of their own way and created a new category which ended up changing the conversation about coffee around the world. Asking good questions can help you get there because it jogs the brain in a different way. I've linked to episode four on questions or answers to help you with this process. The great thing about having an example like Starbucks to work from is we can look at what they've done to work our way back into the type of questions they might have asked to get to that point. You can use those to shake things up in your own business or industry. So at Starbucks, they might have asked things like when would coffee be more than just coffee? Or why would someone be willing to pay $4 for a cup of coffee? Or how might we turn the act of getting coffee into an experience? Notice those questions aren't about what everyone else is doing. They aren't getting stuck in the hurting or the angers. Instead, it's about looking to what could be and asking how might we or why? For your business, look at all the things you do because everyone else does. Is that serving you well? What would make your customers excited? Delighted? How can you be more ingrained in their lives than you are now? What would make you into a brand they would want tattooed on their bodies? As you know from episode five, the Truth About Pricing, which is of course linked in the show Notes for Price is never about price. It's about all the things that come before the price that matter more than the price itself. Starbucks is a fantastic example of that. When they changed the conversation and brought value to the overall experience, people were willing to pay more and they were happy about it. Studies of people drinking wine have shown that people get more actual enjoyment out of things that cost them more money. So when someone was told they were drinking from a 90 bottle of wine and separately told they were drinking another glass from a $10 bottle, the brain scans showed increased enjoyment on the more expensive bottle, even though of course, the wine was exactly the same. In both cases, people who are told their pain reliever is More expensive also report more relief than those who were told the pill was cheap even when both were placebos. There is a virtuous CYC luxury brands like Starbucks. When you can break free from the herd and make it about something more, your business can reap benefits beyond what you even imagine and your customers will be happier. Lots of people buy multiple items from Starbucks every day. Two five dollar coffees and a salad for lunch and maybe a little snack or a coffee cake or whatever it is. And the disposable cups and holiday decorations. And they post about it on Instagram to brag about the first PSL of year. Speaking of psl, let's move on to the next space where Starbucks changed the game. All those different drink options, well, it's a mainstay these days. The first big drink Starbucks made famous was the Frappuccino. Did you know they didn't actually invent that drink or its name? They bought the rights from a coffee shop in Cambridge, Massachusetts who had already trademarked the term, but they knew the value of the name and what they could turn it into. This also goes to show that there's a lot of effort that has to go into turning these things into multi, multi, multi billion dollar industries. You don't just win by having the name Frappuccino. There's more that goes into it than that. It would have been enough for Starbucks. Maybe they could have decided that they liked the idea and didn't need the name and they could have just called it a blended coffee or a coffee granita, but it wouldn't have been the same same. It wouldn't have been enough. A fun and funky name that no one else could use allowed Starbucks to differentiate itself. This created a brand within a brand. This type of drink has almost become what Kleenex is for facial tissue. You may ask for a Kleenex, but you don't really care what brand it is most of the time. Sometimes you just need a tissue. You may go to another coffee shop and ask for a Frappuccino. While they may have something similar, they can't call it that, which has become a big value add for Starbucks. The brain gets what it expects. Something I've talked about a lot on the podcast. If you expect that Frappuccinos are delicious and anything that doesn't have that name is a second rate version of the real thing, it will end up not actually tasting as good for the same reasons as I was talking about in that wine study. This is why people are willing to pay more for the drinks. At Starbucks, there's a value perception on the drinks and snacks you can only get there. Take the pumpkin spice latte, which I already alluded to. Well, pumpkin spice is now available in every product under the sun, including Spam, which just announced its new pumpkin spice variety this year. And I have to say, it sounds absolutely terrifying. I don't think I could bring myself to even taste that, though they might sell some as white elephant gifts this year. I've of course linked to an article talking about pumpkin spice spam, and if you have thoughts on whether you would try that, please do share that with me. On social media, you can find me as the brainy biz. Most everyone knows that the original psl, the one that started it all, was Starbucks. Even if you hate them or you've never had one. If you were going to get a PSL and had your choice of where to get one, what would your top choice be? Which do you think would be the best, the most delicious? Probably the one that sells umpteen thousand of them a year. The first Starbucks Pumpkin Spice lattes are one of the seasonal drinks Starbucks brings out each year, like peppermint mochas and caramel brulee lattes, which were introduced in 2018. They're only available for a few weeks or maybe months before they're gone. This, of course, is scarcity in action, and it can also trigger loss, aversion and the fear of missing out. You may think, well, I better get an extra PSL because they'll be gone in a week. It gives you permission to indulge at a time when people are looking for warm drinks and a little extra love. Starbucks is there. The thing about scarcity is you have to actually take things away to use it as an advantage in your business. For Starbucks, there are people who would drink a PSL all year round. But there's a benefit to having it go away and come back. When they announce the date PSL is coming back each year, it breaks social media for a day or two or a few weeks. And many of us think pumpkin spice has jumped the shark, that it's available in so many aspects and options now it isn't worth it that it's time to move on to a new craze. Businesses tend to get bored with their old staples, so you might think, we've done that a few times, we gotta keep it fresh, what's next? People are probably bored with that, right? In the case of pumpkin spice, that's not how it works. PSLs make a ridiculous amount of money for Starbucks each year, even though they've been around for 16 years now. How much, you ask? Well, the total amount isn't publicly disclosed, but I've linked to an article from last year 2018 that says someone at Starbucks confirmed they had sold over 350 million pumpkin spice lattes in its first 14 years. So that doesn't include sales from 2018 or now 2019. And when their guesstimate math was done, that was expected to mean that just pumpkin spice lattes generated. Are you ready for this? $1.4 billion for Starbucks? Remember, that's just on the PSL, which is only around for a couple months each year. And as you know, this craze has benefited more than just Starbucks. Nielsen data shows that the revenue from pumpkin spice flavored products from August20 to August 2018 was $488.7 million. This is one of many examples where Starbucks changed the game. They created something different and managed to hold a big piece of the market, even when the imitators arose in every area. And you might be asking, would Starbucks revenue go down if the hyped drink was around all year? Probably. Honestly, the scarcity, the hype, the FOMO is a big reason this gets so much attention though. The release of PSL is coming out earlier and earlier each year, so it'll be interesting to see how this changes in coming years. Now, PSL is available the last week in August, which some argue is too early, but the grocery items are available before that now, and some of the coffee creamers and K pods are available year round or start off in late summer. The key here, and what we can see, is that Starbucks is constantly testing and they're not afraid to have something really popular only available. Sometimes for many businesses, we get afraid to pull something popular off the shelf, physical or proverbial. We want to ride that train right into the ground. But sometimes you need to incorporate seasonality, or at least a limited time offering to make something special and scarce that creates value in the brain. And of course, now that Halloween is over, PSL's old news until next August. The new thing which started this week is the Red Cups. Oh man. You could spend your entire holiday season reading all the tweets and Insta posts using Redcups, some who love them, some who hate them, and everything in between. Making and keeping a tradition alive is something Starbucks does amazingly well, and there will be an episode on Traditions and Nostalgia coming up soon on the podcast. The Red cup first debuted in the 1997 holiday season and has been A staple ever since. As Starbucks has grown, so has the frenzy for red cups, and for many it has become an important tradition of the holiday. For those who live and breathe Starbucks, they plan outings with the family to get the first PSL or snag. Red cups on launch day this year was November 5th, and when the loyal don't feel the cups meet their standards, they're vocal about it. In years past, social media has seen many complaints about the cups, the ombre or green cups, to name a couple. There's a link to an article outlining all the controversies around the cups in the show notes if you want to read more. For our purposes, the important thing to know is that when you become a lifestyle brand, you bear the responsibility of being a big part of people's lives. Your choices reflect theirs and when you do something out of character, they'll tell you about it. This is both good and bad in many ways. It's just important to be aware of and prepared for it. When you do something out of your brand's character and no one notices, you probably aren't as strong of a brand as you think you are. I've linked to episodes 43 and 44 on brainy branding to help you with this if you want to learn a little bit more. And remember that at one point Starbucks was just one store, then they were just a regional brand, and then they were just whatever. It's never too early to start thinking about stuff like this. If you put it off, you'll never get there. At Starbucks, there was a set criteria of five filters that any and every aspect of the business had to pass in order to make it through to customers. Those included being handcrafted, artistic, sophisticated, human and enduring. If something didn't fit the criteria, it wasn't on brand and it wasn't done. Whether it's Frappuccinos or nitro, cold brew or red cups or the chairs in the lobby, it all has to get back to those filters because the brand is a living, breathing thing that ties back to the self expression of customers. Artistic is seen in the way the cups and other products are designed. Human elements are in the way the baristas face the customers, which was novel when it was first introduced. Enduring in those things that return year after year. Like the red cups. They may look different, but they're a part of the culture now. They change with the times. For example, you can get red reusable cups now instead of them all being disposable cups. And that is also in its own way incorporating that enduring element back in the Starbucks personality is very human and perhaps more fun and quirky than sophisticated, but you can feel that vibe of sophistication throughout the stores. Consistency is key, and until you define what you are and are not, you can't be whatever it is consistently. When you have your own filters and know what you're about, you can really shout them from the rooftops and your tribe will resonate with it and those who aren't with you won't. And that's okay. That's the thing about defining who you are and what you're about. Not everyone will get on the train, and you have to be willing to accept that and move past your brain's desire to please everyone, to be part of the herd again. That never really goes away, but you need to look at when it matters. Check the numbers to see if you're off base or if it's just a small percentage that don't get it. Your brain will want to blow the negative comments out of proportion and say everyone is thinking those bad things. Often it's not as bad as your brain thinks, so taking the time to stop and evaluate what's really going on is important. What if Starbucks stopped to evaluate if it was on the right path and went back to the drawing board after every negative comment? They'd never get anything done. I want to share one last thing about the scarcity and limited time stuff at Starbucks. In the past few years, they've been doing some crazy launches that were only available for a very, very limited time, like the Unicorn, Frappuccino, Zombie, Frappuccino, S', Mores, Frappuccino and Tydex. While these have been insanely popular for Starbucks, they've announced there will be less of the very limited time offers because they're notoriously hated by baristas. While they didn't say it in those exact words, it's more about the overall brand benefit while people love them and it gets great hype on social media. These limited time drinks are often difficult and complicated to make and sell out quickly. The Unicorn was only supposed to be available for five days, but in many locations it sold out in one or two, and some customers were disappointed when they didn't look like the hyped photos, and others were upset by long wait times. So Starbucks is learning from their I can't really say failures because these have been incredibly successful, as I said, and that is what makes it so amazing when you think about the value of a brand. It's more than just money and bottom line sales. It's about the overall experience with the brand at its core. And while the influx from special drinks can boost excitement, it isn't worth risking the whole empire. Would you be willing to do that to put your employee satisfaction and in store experience above massive sales and chatter on social media? The even bigger consideration would you have even broken out from the norm to do something so different you were in a place that you got to ask that question? This is a luxury bred from their roots of being different and looking beyond what was right in front of their faces. From looking at different industries and trends and seeing what was popular and asking how would that look Here, this is the concept of availability in action. Not every super limited time offer from Starbucks was a giant win, but the most popular one, the unicorn, was capitalizing on a trend that was all over social media and people's minds. Unicorns. Instagram is full of unicorn inspiration. From cakes and cookies to costumes and hair color and nails and drinks and clothes and everything in between. The world loves unicorns right now. Starbucks saw that and jumped on the bandwagon at the right time and it worked. What your business should learn from that is to watch the trends. What's going on that's cool and interesting and that everyone's talking about. And how would it look if you were to incorporate that into your offering? Maybe it's for a limited time, maybe not. Starbucks has done this in less flashy ways, like their Rose Gold cups from last year, which I've talked about on the show before, down to their City series of coffee mugs. People who travel like to get things that they bring back with them that say the name of the state or iconic city they visited. People also like mugs. Why not combine those things? I know we have a few and this is a trend that is always in style. I bought my first city mug from Starbucks when I was in London about 15 years ago and I still have it. It's one of my favorites. This is a trend that can last and last without screaming about it from the rooftops again. Find what people are already talking about and loving and see how you can be part of that conversation. It's much easier than starting a brand new one and trying to force people to get on board. As I said at the top of the episode, I could talk about Starbucks all day and probably have an entire podcast devoted to the cool things they're doing in their business and how it applies to brain science. But for now, I'm only going to touch on one last category of Star Rewards Star Rewards are one of the smartest things Starbucks could have done for their business in many ways. This built upon the wildly popular Treat receipt, where you can get a discount when you buy a second item after 2 or 3pm that same day if you bring back the receipt. In addition to being a good use of auditory cues and rhyming, I've linked to the episode on that Treat receipts also helped people to form a habit with this smart addition and it had excitement built in, scarcity and loss aversion. Once again, it's only good for today and this helps you to feel like it's okay to give in and indulge with a second delicious chai tea latte this one time because it's not every day and you don't want to miss out on the discount, so you've earned it. That genius is multiplied in the Star Rewards system, which now has over 17 million users and climbing. The Star Rewards model, which is a very smart and subtle play on the Starbucks name by the way, is built to create habits for users and increase visits. It also encourages people to try new items and has limited time, offers customized preferences with an opportunity to get bonus stars. I get emails all the time saying things like Monday's double Star day, so be sure to come by. And when I open to pay with the app, it lets me know that if I get four tea lattes over X number of days, I can get 100 bonus stars or whatever the current promotion is. Sometimes they miss, like telling me I can only get the rewards that time around if I try a sandwich with a gluten allergy. That's a no go for me, but I know I'm in the minority and as we know, if Starbucks asked people what they would want to try or never try and only catered special offers to them based on what they said they wanted, they would be far less successful. People would have said they didn't want $4 drinks or lots of sugar, or that they wouldn't care about red cups, but they do. Being willing to test, experiment and learn is something Starbucks does really well. I've linked to episode 63 on how to design your own experiments if you haven't checked that out yet. Essentially, Star Rewards are a huge testing ground of live field experiments. I personally would love to see and play with some of that data. I know Starbucks has multiple data analysts on staff. They're putting a lot of effort behind understanding what works and what doesn't and trying new things to see where they can increase behaviors they want in their customers. They recently revamped the Star Reward system to make it so you could redeem earlier on and for different items along the way, not just a long time until you get a free drink or food item. This is smart because it provides some quick wins and a relative scale that puts the user in charge. You can choose to wait and redeem later if you're saving up for a drink or get something now. It gives just enough control to help the user feel validated in their choices. And of course, planning for that next visit where they'll get the stars needed to hit the next tier. And for those of you who are listening now and thinking but Melina, what about the things you've taught us about loss aversion and loyalty programs? Don't worry, loss aversion still matters, and most loyalty programs are not set up to use it properly. But that's exactly why the Star Rewards program is so important to talk about. They've done something different and found a loyalty program model people love and use. And actually, it's the way they flip loss aversion. That's one of the main reasons it does work. They've once again changed the conversation and shifted loss aversion. So your brain is applying a completely different frame from most loyalty programs. In the traditional coffee loyalty program, we have the punch card buy 10 get one free or whatever number. You're required to keep the card and remember to bring it and pull it out. It's a whole thing for Starbucks. It's intertwined with the payment system, so it's easy. Remember back to last week's episode talking with Roger Dooley about friction and the one click ordering and how important it is to make it easy for customers. In this case, the customer doesn't have to do anything other than pay with their phone to get rewards. So that's super easy and built in. And you know that's a benefit for Starbucks and now they have their own credit card. All sorts of great stuff that they're able to include. Instead of focusing on this potential gain of buy 10 get one free, which is arbitrary and far in the future and puts the burden on the customer, you have loss aversion and reciprocity built into the promotions. Wednesday's Double star day. Buy five tea lattes in four days and get 250 bonus stars. This looks at an existing habit. It, let's say, goes to a daily chai tea latte drinker. If I just get one extra chai, then I can get a free drink. I don't want to miss out on that opportunity. Hmm, maybe Aaron wants a chai. Do you see how different that is from a traditional loyalty program? Plus, it gives them an opportunity to push tons of content to their willing and excited customers at the holidays. Starbucks is all about selling their extra gifts and ornaments and mugs and different things that you can buy. So maybe they have double, double or triple star promotions that they promote, encouraging people to buy those small gifts that they already know that they need to get and get some bonus stars for themselves. It's a more frequent reward opportunity and lots of FOMO triggering promos, making it a super win for Starbucks. So while a lot of loyalty programs don't work, this one is something you should definitely, definitely learn from. To recap, star rewards are a smart balance of loss aversion, scarcity, relativity, habits and more, all executed through a series of experiments to see what's bringing the most value to the company and its customers. Just a really, really smart application. All right, I'm getting ready to close out the episode, but before we do, I want to do a quick recap of the highlights of what I covered throughout the episode episode and what you can learn from Starbucks to apply in your own company. These are the overarching lessons that can really help you stand out in any industry. First is not to get sucked into your brain's natural tendency to herd. Just because everyone else is doing something one way doesn't mean it's right to do so. Along those same lines is to take a step back and think about, think bigger, ask lots of great questions, look to the future and the possibilities. What's going on in other industries? Where could you learn from businesses completely different from what everyone in your space is doing to change the game? You can't do that being like everyone else. Next, scarcity is a powerful tool when used correctly, especially when properly paired with loss aversion to help people choose your product. Whether it's limited time, drinks or styles of cups or gifts that are in limited quantities or for limited editions, it all can be a powerful driver of behavior and bring people into the store which gets them to buy more. And I didn't even talk about gift cards in this episode, but they also have limited edition gift cards and fun styles that can sell out quickly. I remember when the Seahawks ones came out and they were so popular you could only get one if you put a minimum of $20 onto the card and they made the really smart choice to incorporate the design of the cards into the app so I can have my Seahawks card even if I don't want physical clutter. That's a lifestyle brand in action. Which gets to the next point. Habits Making your brand a habit is about more than caffeine and sugar. Starbucks puts effort into getting more customers to choose them more often for more things Things There's a reason this is a weekly podcast as I've talked about before. Sure, it would be easier to release content monthly or every other week, but then you don't become part of people's lives and rhythms. You want customers, clients, members, what have you to be anticipating your content, products and services to be excited about them. And it's your job to be there when they want you and encourage opportunities for them to get more when they want it. So what got your brain buzzing as you learned about the behavioral economics of Starbucks today? For me, I love so much about Starbucks. I fully accept that I'm probably biased being from Seattle, but they do so many smart things that go against the choices most everyone else makes, and I love those examples. There's something about the way you can see that they test and are thoughtful about so many of the reasons, rewards and contests and specialty items they put out there. It's a really great brand with a lot of fun behavioral elements going on. A very brainy business to be sure. And this is also an interesting time to share about their loyalty program because you might have seen that they've had some pushback on some recent changes they made to the program. It's interesting because there are actually a lot of good things they did, like making their most popular products easier to earn and redeem, with stars like the iced coffee and tea coming down from 150 stars to only 100 to redeem them. I'm curious and hopeful that my iced chai is in there, but some of their other items like hot coffee and tea are going up from 50 stars to 100. From what I've heard, they sell a lot more ice drinks than hot ones. So this was intended to be a benefit overall, but there's a lot of backlash, as often happens when you change anything people have become very accustomed to we have some loss aversion here. We have some anchoring issues here. It's a really interesting behavioral analysis to take a look at. I'm willing to bet that today's outrage will be a distant memory soon, maybe even by the time this episode airs as we quickly settle back into our new status quo bias. But it made it feel like an extra good. Time to refresh this one from the back catalog. What did you think about out with your own loyalty or incentivizing you do at your company. It doesn't have to be a formal program like this one at Starbucks, or the irrational loyalty program from McDonald's that we're going to discuss on Friday. Leaning back to last Tuesday's episode on Surprise and Delight, there's a lot of value and loyalty that comes from delightful, unexpected experiences, and a less formal program is perfect for that. Who will you delight today? Come tell me about it on social media. You'll find me as the brainy biz pretty much everywhere and as Melina Palmer on LinkedIn. There are links to make it easy for you in the show notes for the episode, along with related past episodes, books and articles. They're all waiting for you in the show notes@the brainybusiness.com 278 and just like that, episode 278 on the behavioral economics of Starbucks is done. Join me Friday for a brand new episode with Lauren Kemp and Steven Springfield to talk about how they created an irrational loyalty program at McDonald's. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me. And remember to be Fox. Thank you for listening to the Brainy Business Podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.