Today, the Duetto credit card is kaput. What happens to those highly caffeinated "best customers" who showed their affinity to Starbucks each and every day through their Duetto usage? How does Starbucks continue to "extend the Starbucks experience" --especially for these typically heavy users-- despite the end of the card?
The Duetto was a 7 year partnership between Chase and Starbucks. Jamie Dimon, in their joint 2003 press release, called it a "glimpse of what the future of payments looks like... This two-in-one co-branded rewards card is going to change the way many view the plastic in their wallet." Howard Schultz, in the Good to Great PBS special, heralded the Duetto card as Starbucks' "entry into financial products."
Alas, despite the initial hype, the Duetto is no more. Perhaps it was because of the new (and generally consumer-friendly) rules now imposed on credit cards, or perhaps it was just the awkwardness of the dual card structure.
In any case, Starbucks handled the end-of-lifecycle extremely well, using three basic tactics:
- Communication. Starbucks sent their own well-crafted letter in addition to Chase's ominous "important notice." You would think that this is a given for any co-brand, but others simply have not bothered: I remember, for instance, that Barnes and Noble did not do this when they severed their relationship with BofA (then MBNA). MBNA just sent a note saying that the program was being cancelled and that a different card will be appearing in my mailbox. B&N later hooked up with Barclays to issue new cards.
- Fairness. Starbucks will be sending any unused balance from Duetto cards in the form of a gift card. In my experience, others have not done that, which is really utter suicide for a brand! Barnes and Noble did not transfer the points, nor did various other cards including Sony (admittedly, Sony was a bit different, as they had cancelled my unused credit line - but still the same problem). Imagine earning 2400 points and having them disappear just short of the 2500 necessary to redeem an award. How is that any different than literally saying "go f*ck yourself" to a loyal customer?
- Free drinks. Nothing like bribing your best customers to stay your best customers when you are taking away something as personal as a credit card. Starbucks sent 6 drink coupons that can only be used once per month in the next 6 months (i.e. one coupon for April, one for May, and so on.). This keeps Starbucks close to their customers hearts, minds and wallets for the next 6 months, arguably with an even better feeling than getting small fractions of a frappuccino at every purchase.
This was an expensive proposition--I'd guess $20 average per customer--but a bargain compared to alienating the people that love your brand the most.
P.S. Yes, Starbucks, I believe that this is actually a venti thank you.