While we don’t drink very much Starbucks coffee, we are fascinated by the reaction of Starbucks customers – and what they seemed to miss.
of Starbucks’ total sales every quarter since early 2021, thanks in part to the popularity of iced drinks among Gen Z customers.
This means that for a large share of Starbucks customers, one part of the rewards program is actually getting more generous.Loss aversion , a key concept in behavioral economics, provides a simple explanation. Loss aversion means people perceive something they lose as a bigger deal than something equivalent they gain. People who need to spend 50 more stars from now on to get a hot coffee feel more pain than customers who will spend 50 fewer stars to earn a free iced coffee. This extra pain leads to more complaints from those hurt and little praise from those benefiting.
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