Customer Experience at Starbucks
The success that Starbucks has achieved, and the wide spread of its branches around the world, invites reflection. What made coffee — a drink humans have been consuming for hundreds of years — sell at Starbucks for ten times its actual cost? What draws frequent visitors back, time and again? Is it really true, as the Arabic saying goes, that “a water vendor’s partner never loses”? Yes, the saying is true to a degree — but why haven’t all cafés achieved the success Starbucks has? Some readers might shrug it off, saying “it’s just coffee.” But I promise you your view will change once you finish this article.
The cover image and many scenes from the wonderful film I Am Sam — released in 2001 — remain etched in my memory. The film promoted this brand indirectly, in what’s called in marketing product placement (also known as embedded marketing) — the idea of marketing through channels not typically considered advertising. Brands don’t appear in films by chance; in most cases, this happens through prior agreements between the brand owners and the film’s producers. Yet while the designs used in Starbucks’ products may be the most attractive among all their competitors, brand marketing can’t be the sole reason for the success. So how did this brand’s star rise to the point where it is now valued at around $85 billion?
I also recall reading many case studies on Starbucks’ use of marketing research to understand specific markets and align with consumer preferences there. The Japanese market is one example. When Starbucks decided to enter that market in 1996, they hired a consulting firm whose main recommendation was that Starbucks’ entry into Japan would be a disaster. But they didn’t listen — they took the risk and ran extensive Japanese market research to study Japanese behaviors and the foundations of their preferences. The research helped them build a beverage and food menu suited to Japanese culture and general taste — a culture dominated by tea consumption rather than coffee. From that beginning, despite the fact that planting new habits and building new cultures in any society is difficult and very costly, they succeeded within seven years in opening over a thousand branches there. This shows their flexibility, applying the proverb: “If you’re in their house, behave like them.” Worth noting: Starbucks does not apply the franchise model except in very rare cases. They open all their branches themselves, and they all fall under the same umbrella in the United States. But this too isn’t the main reason for their success — it’s just one of them.
Coming back to the question: what distinguishes Starbucks from other cafés is the exceptional customer experience. Crafting an exceptional customer experience isn’t as easy as some might imagine, because a distinguished experience is an equation containing many elements: employees, processes, culture, listening to the voice of the customer, quality control, continuous improvement, creativity and innovation in many new products centered on human needs — and others.
“The key ingredient in our success has been that our brand was not built through advertising and promotional campaigns, but rather through the customer experience.” — Howard Schultz
Starting with the Employees
Starbucks implemented a system that allows all employees working there to become partners in the company through receiving a share of company stock, and that share grows with their years of service. Through that partnership, the employee won’t feel like a hireling working for wages but will feel like a partner, working as if they were working for themselves. In the end, the bad or good treatment from employers toward employees reflects, like a mirror, in employees’ performance and treatment of customers. That’s why market-research experts advise their clients to run employee satisfaction studies alongside customer satisfaction studies — there’s a direct relationship between the two. Lastly, Starbucks recently announced its intention to raise beverage prices to improve employee income, not to increase profit. Imagine how their employees feel when they see such bold steps from their management. Their employee attrition rate may be among the lowest in the industry compared to peers.
“If you treat your employees beyond their expectations, they will deliver your customers service beyond their expectations.” — Howard Schultz
Processes and Quality Control
Having documented work procedures, detailed to the point of being almost tedious, is extremely important to ensure a uniform standard of service across all branches — with the caveat that these procedures should not constrain employees’ spontaneity, especially when that spontaneity is positive and serves to build a good image of the company. These procedures can also include branch design standards — Starbucks attends to the finest details here, which the customer may not consciously notice but which seep into their subconscious and make them come back to buy again without realizing all the reasons behind it. We often hear about restaurants or cafés that made a splash on opening, only for their reputation to deteriorate and their quality to fall — and this is principally linked to the absence of, or non-adherence to, procedures and standards that ensure delivering the best quality consistently.
At Starbucks, their procedures include, for example, mechanisms ensuring the best coffee suppliers are chosen — beginning with visiting farms in different countries and ending with supplying different coffee varieties to all branches around the world, so the taste of your favorite drink in the Far East matches its taste in the Far West.
Voice of the Customer and the LATTE Model
The internet is full of stories whose authors talk about receiving a free drink on the house — either because they were unsatisfied for some reason, or because their order was unavailable due to a shortage, or for the very simple reason that they accidentally dropped their coffee cup without having a single sip. Which other cafés you know do that? Treating customer complaints as a gift from the customer is a company culture — at a time when we see many Arab companies inventing ways to avoid registering complaints and offering channels to discourage them.
The voice of the customer at Starbucks is heard through several channels, including social media and the My Starbucks Idea bank that relies on customer contributions. Meeting customer needs is critical to ensuring loyalty and repeat visits — and customers’ requests at coffee shops are strange and varied: one wants sugar, another artificial sweetener, another wants decaf, another wants a specific flavor added, another wants skim milk for their diet, and another wants something not on the menu at all. Customers are demanding, and each has their own taste.
As for the LATTE model, it is one of the models used to train employees when they join Starbucks — beautifully named after one of the most famous drinks: Latte. Author Charles Duhigg covered this model in his book The Power of Habit.
Designing the Finest Details
I covered this in my previous article on designing the small details. If you ask about and look closely at most distinguished cafés and restaurants worldwide, you’ll be amazed at how meticulously they attend to the finest details and how they set standards for everything that can affect a human being and their five senses. Scent now has dedicated companies offering recommendations on the fragrances to diffuse in a particular space and the frequency of diffusion (catering to the sense of smell). Other companies also offer consulting related to acoustics and music that can be played to suit what’s being served and the surrounding ambience (catering to the sense of hearing) — and Starbucks has a particular taste in choosing specific music. As for sight, that relates to the interior design of the branches and how food or drink looks and is presented, lighting and its intensity and reflection. You as a customer might not have stopped to think for a moment that all of this is researched and discussed in detail — you don’t know what’s happening behind the scenes.
Service Philosophy
Without a clear vision of the service that must be delivered to customers, it’s difficult to have a unified tone of service — and you’ll find every employee singing their own tune. Joseph Michelli, in his book The Starbucks Experience, summarized the chain’s success in five core pillars. I’ll present them briefly as I understood them after reading the book, in no way as a substitute for going back to the book itself.
Be Welcoming
Have you noticed that few service outlets, when you enter, greet you or offer help? Personally I’ve walked out of several stores when I didn’t find anyone to greet me or offer help, considering it a lack of regard for me — and that’s natural, because one of the core needs in Maslow’s hierarchy is the need for esteem. It’s a need Starbucks management has not overlooked. While many cafés and restaurants don’t welcome a customer staying for a long time, there’s a culture among Starbucks staff not to disturb the customer even if they stay a long time. Elsewhere you find people clearing their throats, eyeing you, and sometimes returning to you multiple times to push for additional orders.
Be Genuine
When we talk about every service pillar, remember the employee is a partner. How will the employee act with customers when they feel their excellence ultimately serves their own interest? Can you think of an incentive stronger than this for employees who otherwise only get the company’s monthly paycheck? I don’t think so. From this came the principle that the employee should be genuine and authentic in their conduct, not feigning — because customers easily distinguish heart-driven service from service driven by fear of punishment. At Starbucks every employee becomes something like a customer relations manager — knowing more about each customer, remembering their name, the names of their children, and their favorite drink. This is what a relationship manager should do to maintain the relationship and grow the customer’s future business. And when Starbucks employees act as themselves and build this kind of relationship, this doesn’t only benefit customers psychologically but benefits the employees too — easing the weight of routine boredom, turning their jobs from featureless processes into relationships full of joy and energy.
Respect Others’ Wishes
Through many initiatives serving the community and the environment, starting with using renewable energy sources, donating to relief projects in developing countries, building schools and health clinics, banning smoking inside their branches since 1971, supporting coffee farms and trying to provide an acceptable standard of living for their workers. Starbucks has specific standards it sets for its suppliers as a condition of doing business and buying coffee from them. They also support volunteer initiatives that benefit the community and environmentally friendly projects.
Be Knowledgeable
According to Fortune 500 magazine, the budget allocated to training exceeds the advertising budget. Unfortunately, most Arab companies are very stingy in training their staff, operating on the principle of “what if I train them and they quit?” Successful companies operate on the principle of “what if I don’t train them and they stay?”
The Green Apron Book
A booklet that helps the employee build emotional intelligence and teaches them how to add a personal touch to their relationship with customers. A copy is given to every employee. Anyone who has visited a Starbucks branch, especially in the West, will have noticed the vast difference in how staff deal with customers.
Take a look on your smartphone at the website called Starbucks Coffee Passport, which aims to build awareness about coffee, its varieties, brewing methods, roasting, and the drinks they serve at their cafés — and it’s one of the requirements for passing the probation period. Every employee at Starbucks must read coffee content exceeding 100 pages and be tested on it after 90 days. The site is open to the general public to educate themselves too, and serves as a platform for getting customer feedback through their comments on the café’s products — killing two birds with one stone: education, and providing another channel for the voice of the customer.
Be Involved
There’s a vast difference in performance between companies whose employees do what’s expected of them — specifically what will affect their annual evaluation based on KPIs — and those other companies whose employees take initiative and consistently do more than what’s expected. Initiative within the branch itself, at the company level, and for the community. Starbucks’ employees — or partners, to put it better — contribute to inventing new products through listening to customers. They submit suggestions to management to improve specific aspects of daily tasks, and management listens to them and values their input. Success here consistently rests on employee-initiated solutions instead of complaints and blame. As for what they offer the community, the examples are many and varied — take a look at some of their programs.
In Closing
Let me get ahead of things and dedicate this paragraph to anyone who might object to my writing about a café rumored to support Israel. I’m not here to prove or deny that, and I don’t really care — behind the scenes, nearly all the world’s companies support the Zionist entity. The point of the article is to highlight a success story and benefit from the successful practices Starbucks has pursued — not to promote the café itself; I’m personally not even a frequent visitor. Wisdom is the lost property of the believer.
There are more than thirty books authored about this café chain. Imagine the size of the success that came from their good practice — and the size of the inspiration that drove more than thirty authors to write about them.
Related framework notes: Voice of Customer (VoC), Moments That Matter, Customer-Centric Operating Model, Closed-Loop Feedback
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