Customers Rock!

A blog about customers, their experiences, and how businesses can make sure their customer experiences rock!

Re-Experience Starbucks, Update 9: Customer Loyalty

Posted by Becky Carroll on July 29, 2008

Part 9 of the ongoing ReExperience Starbucks project with Jay Ehret from The Marketing SpotDon’t forget our survey, which is still open, at the end of the post. Please tell us what you think about the changes at Starbucks!

How does Starbucks create customer loyalty?  John Moore at BrandAutopsy said this a few years back:

“For years, Starbucks Coffee has used high-touch methods to build and maintain a loyal customer base. In his book, “Pour Your Heart in It,” Howard Schultz, in supremely succinct fashion said, “If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.” That is the true description of a high-touch way retailers can connect with customers to build enduring loyalty.

John was writing this post to contrast the approach of high-tech methods of building loyalty with high-touch methods of building loyalty.  Which approach is Starbucks using today?  Let’s look at what they have been doing lately to improve customer loyalty and the customer experience.

Customer Service

Starbucks closed all of their US-based stores for a few hours earlier this year to conduct partner (employee) training.  Right after the training, it was observed that Starbucks partners were making it a point of asking for customer names again (something they had moved away from) when taking drink orders. They also seemed pretty cheerful and upbeat.

Fast-forward to July 2008.  At my most recent experience in a Starbucks I regularly frequent, there was no recognition or asking for names.  My mother-in-law was with me, and she pointed out how “grumpy” one of the partners seemed to be.  I had noticed this before with the same person.  I did notice signs on the wall, directed at partners, which pointed out how to manage fresh bananas (a key ingredient in their new Vivanno smoothies).  

I have also noticed a quieter, more subdued attitude from employees at other Starbucks I have been to lately (including my most commonly visited store near my house).  I wonder if a combination of store closing news and the introduction of new, time-consuming drinks has weighed-down our barista friends.

Customers Rock! Take: Keep focusing on your employees, especially when things are difficult.  They are your brand ambassadors to the outside world.  Customers will notice the change in customer service right away!

New outside seating!

New outside seating!

Customer Experience

 

 

 

 

 

I am not sure if this is happening at other Starbucks, but one of our local stores has put in nice, comfy seating – outdoors!  Now if they can just 1) keep the tables cleared of trash and 2) put some more cushioned chairs inside, we might have a winner.  (Note – that is my Passion Iced Tea on the arm of the chair…)

 

Introducing… New Products

Starbucks has really been focusing on the introduction of new products in their stores these past few months.  First came Pike’s Place Roast, a new blend of coffee meant to hearken back to early days when Starbucks was a true coffee experience.  Although it has had mixed reviews, the idea of grinding in the store has helped boost the coffee aroma (which was sorely missing before).

Most recently has come Vivanno smoothies (mentioned earlier), the Orange-Mango Banana and the Banana Chocolate.  These two new smoothies are high in protein and fiber, and not horrible with respect to calories (compared to the Frappuccino).   Reviews of the Vivanno so far have been mixed.  One interesting thing I noticed in the comments to the blog post Starbucks’ Vivanno vs Jamba Juice was how customers felt like it was out of place to order “smoothies” at a coffee store!  Others who are comfortable with the use of protein powders really seemed to like these drinks (see comments in this BusinessWeek post on Vivanno).  Personally, I would rather stick with my iced tea and get smoothies somewhere else.

Customers Rock! Take: The Pike’s Place Roast has been a good way to try and re-focus on being a coffee store.  It still needs some work, but they are on the right track.  The smoothies are a good option for someone coming to Starbucks looking for something nutritious to drink.  However, is this really why people come to Starbucks? 

Does It Make a Difference?

Here are the real questions to be answered.  Do these new smoothies help Starbucks get back to the “third place” experience?  Does the Pikes Place Roast bring in new customers?  Does the Starbucks Loyalty Card bring back loyal customers?  So far, the reviews are conflicting.  It takes more than new drinks, free WiFi, and comfy chairs to retain customers.  It is not just about high-tech vs high-touch approaches.  It takes building relationships, one customer at a time. 

Starbucks has the opportunity to do so through many channels, both high-tech and high-touch: the daily interactions with customers, the registered Starbucks Reward cards (they have yet to try to interact with me, and I have three cards registered), and their site MyStarbucksIdea (which is heading in the right direction but lacks a true dialogue between customers and partners).   However, it just hasn’t really happened yet.

Starbucks, I would like to see you be successful in re-inventing yourselves through the customer experience.  It would set new standards for other companies who know they should be more customer-focused.  It would make your existing customers happier.  It would help insulate you from your competition, and they are charging up fast. 

There is just one thing you still need to do: look at your stores truly from the customers’ perspective.

What do you think?  Fill Out Our Survey!

Jay and I have put together a short survey to see what you, our readers, think about Starbucks and its “re-Experience” project.  Please take just a minute to click on this survey link and fill it out.  You could even win, what else, a gift card to Starbucks!  We will be report results on our blogs shortly.

(Photo credit: TAlex)

About these ads

8 Responses to “Re-Experience Starbucks, Update 9: Customer Loyalty”

  1. Katie said

    the survey link does not work for me.

  2. Please try it again, Katie, and make sure you are clicking on the link and not on the Snap shot of the site that comes up. A little tricky! It worked when I tested it just now.

  3. Becky,

    I think there are several reasons for Starbucks to be where they are now, but probably the most important in mind mind is that the brand feels tired and old. Some time back, right before breakfast sandwiches, they stopped innovating. It seemed as if they said, yeah – we are done… SBUX is built and it works, now let’s focus on keeping it this way. That is one of the classic mistakes made by just about every single mass comsumer brand in recent years (think McDonalds, Burger King, Jamba Juice). They were all faced with the same: stagnant revenues due to mostly saturated markets. The vivanno, just as it was with the tiny hot chocolate which name i cannot recall, or brekfast sandwiches, or other products since were no more than tries to introduce new revenue streams. Alas, in the process, SBUX managed to destroy their key legacy (coffee and coffee drinks in a hip atmosphere). Pike Roast was a feeble attempt at re-introducing that, but it has not really paid off (not to mention that the experience is mixed, somedays is good – others bad… not the same — the intended result with it).

    For SBUX to fix itself they need to figure that they are commanding a saturated, highly competitive market and go back to the drawing table and make themselves the leader (again) in that market. That means becoming the best at selling coffee and coffee drinks, ignore the distractions of other things like smoothies and sandwiches, and just be the best they can be.

    As I was writing these final words, I sorta remember reading something similar to what I am writing here before. So, I won’t take all the credit – will give some back to Seth Godin and his book the Dip.

    Great entry, nice project… keep going!

  4. Eric Brown said

    Becky, Great Post
    Esteban makes some great points; Starbucks need to Reinvent Themselves, which is no small undertaking. This seems to be a case in point that there are no “easy or quick fixes”, based on history of other greats, there never is. And it must be such a challenge, and perhaps a pretty humbling moment to be so on top of your game, only to realize that the only real answer is to start over and do it all again. And, it seems that lots of once great brands trick themselves into thinking is doesn’t or hasn’t happened to them as the drift off into mediocrity

  5. Esteban, thanks for your observations on Starbucks and their loss of innovation. I agree that is a key factor in their current race against competitors (who have copied Starbucks in many ways). I think if Starbucks can get back to great coffee in a great atmosphere with a fabulous customer experience, they can keep their customers and gain some new ones, too!

    Eric, good to see you! You are right; once someone gets to the top of their game, it can be a challenge to see where to go next. Starbucks is trying so many different things. I am hoping they truly focus on the customer, just as Howard Schultz laid out in his corporate memos. This will not be a quick fix, as you point out, so let’s hope they can hold out through these low stock prices and play for the long-term.

  6. [...] Re-Experience Starbucks, Update 9: Customer Loyalty « Customers Rock! [...]

  7. [...] Update 9: Customer Loyalty July 29, 2008 [...]

  8. [...] This is post #10 of the reExperience Starbucks Project joint blogging venture with Becky Carroll and the Customers Rock! blog. See Becky’s most recent post: reExperience Starbucks, Update 9: Customer Loyalty [...]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
Follow

Get every new post delivered to your Inbox.

Join 53 other followers

%d bloggers like this: