Re-Experience Starbucks, Update 9: Customer Loyalty

Part 9 of the ongoing ReExperience Starbucks project with Jay Ehret from The Marketing Spot.  Don’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!

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)

Is Retail Customer-Focused?

I heard a very interesting observation from a 14 year old young man the other day.

“Why don’t they sell swim trunks in July?  That’s when I need them.  Seems like stores aren’t very focused on what their customers need!”

Now, I know all you folks out there in retail-land have your reasons for why this occurs.  Seasons for the industry are not the same as the seasons for consumers.  Inventory needs to be cleared out for next season’s merchandise.  I am sure you can share more.

However, let’s look at this from a customer’s perspective.  It took driving to 6 stores and over 50 miles (total) to find a pair of swim trunks that fit.  This is due to the fact that most swim trunks are no longer in stock.  If we had wanted to find a winter outfit, or something for back-to-school, we would have been set!

Putting Customers First

There needs to be some type of balance between the needs of the business and the needs of the customer.  Sure, it is difficult when a whole industry is set up to operate on a certain schedule.  However, our next generation is looking for a new, practical approach to business.  They want to feel important, like they matter to companies.  This will be key in building relationships with them.

We can build all the cool social media sites we want, connect with our customers on Facebook and MySpace, and even get them to spread our message virally.  But if they come into our shops and retail spaces and we don’t have what they need, that creates shaky ground for any relationship already built. 

Organizations need to stay in tune with what their customers need, want, and desire.  One of the best ways to do this is with ongoing customer conversation.  Keep in touch, remind them you are there, and meet their needs.  These steps will help strengthen any shaky foundations that may have developed due to thinking more about ourselves than our customers.

Blogs Hit the Mainstream

It seems to me that when the US Army Corps of Engineers is blogging, blogs have hit the mainstream.  There was an interesting article in The Military Engineer, May-June 2008, about Lt. Gen. Robert Van Antwerp, USA, Chief of Engineers and Commanding General, US Army Corps of Engineers (USACE), and his new blog Corps-e-spondence.  In the blog, Gen. Van Antwerp covers a variety of topics such as flooding in the Midwest, the current state of New Orleans, the water crisis, as well as hiring, leadership, and even baseball (see the picture of him throwing out the first pitch at the Cardinal’s game)!

Gen. Van Antwerp was quoted on why he is blogging in the article, as well as in this video on the Army’s media site:

“This is the way of the future.  We should be out there, too – clearly and openly communicating with the American public every chance we get.”

Is it effective?

The blog seems to be a great way to communicate more about what the Army Corps of Engineers does, as there may be many people that don’t really know what types of projects they take on.  It also gives readers a view into the Gen. Van Antwerp’s leadership tenets and style.  The blog is updated every few weeks, and it is already getting a variety of comments.  It could be improved with more interaction from Gen. Van Antwerp back to his commenters to really create a conversation, rather then just a communication tool.

The Army is blogging – what about you?

Does a blog fit into your organization’s goals for interacting with customers?  Could you use it to better listen to what customers have to tell you?  Perhaps your company could use a blog to create a discussion around certain topics of interest to your customers.    Setting goals before starting a blog is key to making this social media tool successful.

Who Speaks Louder: Marketing or Customer Service?

Overheard the other day from a cashier at my local grocery store (a large chain, by the way): “Can I get a bagger over here?  You aren’t paying me enough to have me bag the groceries, too!”  I heard this as I was coming up to the check-out counter with my purchases (which were only a few items).

Wow, what does that do to the brand’s marketing messages?

The issue here is this: the customer doesn’t differentiate between what marketing is saying and what they hear from customer service personnel.  All messages, regardless of medium or origin, add up to communicate the brand’s image to the customer.  Yet too often, marketing and customer service are managed separately in a company or organization, they don’t speak to each other, and they don’t have common metrics (you know, those things that drive the behaviors?).

When we look at it from the company’s perspective, we see silo-thinking, each department focused on their own area.  When we look at it from the customer’s perspective, what do we see?  One brand, with everyone working together for a great customer experience?  Or many experiences, looking like many brands, with the experience differing based on how customer service personnel are asked to behave?

Customers Rock! was started to focus on highlighting companies that understand these concepts.  Customers Rock! doesn’t mean the customer is always right.  It means we should view our customers as one of the most important assets that we have; therefore, we should plan each step of how we are going to get, keep, and grow these assets.

Who is speaking more loudly to customers at your organization?  Do you need to bring those messages into alignment?  What do customers think about your brand, from all perspectives?  These are critical questions to answer as companies consider how to weather the current economic storms.

“The relationship that is formed when marketing and customer service meet is like saying that you’re making good on your promises.”  Meikah

Teaching Social Media

As the astute reader will have noticed, I recently began teaching at University of California San Diego Extension.  I am teaching the class Marketing via New Media.  So far, it is very interesting to hear what the students think about social media, how they view it with a fresh set of eyes, and what the perspective is around the world (several of the students are international).  

In the first class, we discussed what social media is, what it could mean to companies, and what the potential pitfalls could be.  We have had some great debates in class, and through the assignments, about what social media can, and cannot, accomplish.

I decided to start up another blog, Teaching Social Media, to chronicle the experience of teaching this class, in the hopes that others who also teach could learn something from my journey.  I am also using the new blog as a method to communicate with my students, and they with me.  For example, I gave them a homework assignment to create a blog, and I am including their student blogs in my blogroll at the new blog.

I am still going to continue with Customers Rock!, so don’t worry.  There will just be another place to find me if you want to hear more about social media from the student (and teacher) perspective.  Come check it out!

On another note, I have joined Plurk.  Here is my Plurk, and here is my Twitter (for those who prefer the latter).

(Photo credit:kjpargeter)

Tell 3000: The Voice of the Customer

I always encourage my clients to listen to their customers using a variety of mechanisms.  One of the best ways, however, is to listen to or read customer verbatims.  In other words, listen to customers tell stories about your company in their own words.

So of course, I am very interested in this new project put together by Pete Blackshaw.  He is doing it to help promote his new book, “Satisfied Customers Tell Three Friends, Angry Customers Tell 3000”.  Over at his book’s blog, you can find a series he is starting up showcasing consumer interviews .  These feature various consumers talking about both good and bad experiences from companies.  I listened in on a few, and here is a line I liked from a recent consumer interview about Southwest Airlines.  Mike, the consumer, said this about one of the reasons he likes Southwest:  I feel as though they see me as a person, not just as a ticket and a way to make cash.  Prompted by the interviewer, Mike then goes on to share a story about a Southwest employee that went out of her way to help him feel better about a certain situation at the airport.

Pete, this is a great idea!  I would love to see this sorted by good vs bad experiences, as you are doing with your feedback.  We all need to hear more good experiences -that’s why this blog was started over 1.5 years ago!

Check it out, and let Pete know what you think (and tell him I sent ‘ya).  Readers, talk to me, too.  How do you best listen to your customer’s pure, unfiltered voice?  Monitoring the internet?  Social media?  Reviewing feedback letters?  Surveys?  Focus groups?  Tell us how you do it either via comments or by sending me email to becky at petraconsultinggroup dot com.

Mighty Fine Customer Experience

Here is a tasty tidbit for a Monday.  John Moore at BrandAutopsy Twittered me about a store with a great customer experience, Mighty Fine Burgers in Austin, Texas.  Here were some of John’s comments about them: “…friendly front-line faces, all food prep in full-sight (incl. grinding/hand-forming patties), simple decor, upbeat vibe.”

Here is what I like about them, in addition to their simplicity and their friendliness: FISH.  No, not the seafood, but the customer service philosophy of Mighty Fine Burgers.  They have taken advice from the book called Fish! (if you have never read it, you should check it out), which suggests that the way the Pike’s Place fishmongers deal with customers is a good lesson in how to have the right attitude at work (and in life):

• Make Their Day – Look for ways to create memories for guests and co-workers.
• Be Present – Make every guest feel they are the most important person when you talk to them.
• Choose Your Attitude – Learn to love what you do, even if you aren’t doing what you love.

Living in California, I can’t easily experience this attitude at Mighty Fine for myself, but I will take John’s word for it!

This reminds me of another burger joint out here in the West, IN-N-OUT Burger, which, according to their website, created California’s first drive-thru hamburger stand in 1948.  The menu at Mighty Fine is very similar (simple, meaning basically fries, hamburgers, and shakes), and Mighty Fine has the same “everything is fresh, and you can even watch us making it” behind-the-scenes window to watch food prep that they have at IN-N-OUT.  Let’s hope Mighty Fine are as wildly successful as their Western counterparts have been!  My guess is they will be if they keep up the simply good food and service.

Drop a comment if you have been to either one of these establishments here in the USA, and let us know what you thought about the experience!

Update: I just found a great blog post on Doug Meacham’s NextUp about Five Guys Burgers and Fries; check out the Thank You Customers sign he included.  You rock, Doug!

(Photo credit: khz)

Starbucks and Store Closings: How will it affect the experience? Update 8

Custom latte photo from Starbucks

Starbucks recently announced they will be closing 600 domestic stores, which will mean Starbucks partners at those stores will be “placed” at other stores or let go.  Reactions to this announcement are varied, and they include John Moore’s post on the need for Starbucks to “prune” (which he wrote last year and is still relevant today), Jay Ehret (my partner in the Re-Experiencing Starbucks project) and his post on the commoditization of Starbucks, as well as partner discussion over at the Starbucks Gossip blog about who will stay and who will go.

Here is the official word to customers from Starbucks as part of their press release on the closures: 

Starbucks will reach out to customers who are impacted by the store closures in a variety of ways including directing them to the Starbucks Store Locator at http://www.starbucks.com. Customers who have questions or comments on any store or their Starbucks Experience may contact Starbucks Customer Relations via the web at www.starbucks.com/customer/contact.asp.

Until the store closings are announced to the partners, the Store Locator won’t help (I checked for my area, and nothing has changed yet).  In the meantime, customers appear to be reaching out to Starbucks about their favorite locations.

Customers Want to Help

Per feedback from some Starbucks baristas in the comments at the SB Gossip blog, there are customers who are asking what they can do to help [clarifications in brackets added by me]:

“Every customer who asked today wanted to know what they could do to ensure my store wouldn’t close. (That’s like 50% of the cafe, and 80% or the DT [drive thru] customers).

My DM [manager] was in house, working on his computer when a couple of the folks asked, so I pointed them to him. He, and they, were more than happy to have the discussion.”

Customers are even reminiscing about the Starbucks they have visited and are offering suggestions of which stores to close/open on MyStarbucksIdea, the Starbucks customer community:

On memories:

“I have traveled much of the US for work and pleasure and have visited many of your locations. I have many fond memories at your locations in Seattle, San Fran, Atlanta, and NYC and interested in knowing if they closed without having to go through the list (as they are long and remembering some addresses is difficult.)”

On which Starbucks to cut:

“Close the stores in Safeway and Target and open another drive up store on West Main – Close the drive up store in Bloomfield, NM the drinks there are sub standard and so is the service. “

The Customer Perspective

From the customer perspective, the Starbucks experience is as much about the people as it is about the coffee.  As I have said before, the people make the difference.  Will customers follow their favorite baristas to their new assignments?  What if they go to a competitor?  Relationships built up with people count for a lot – we build trust with other human beings, not with a company.

It remains to be seen whether these closures will impact the customer experience in a negative way.  If going back to the customer experience is really what the Starbucks “Transformation Agenda” is about, then one wonders where increasing the number of store closures fits in.  If the stores that remain open are staffed to the proper levels so customer service doesn’t suffer, this may help the experience in the long run.

Per John Moore, pruning is important for the health of a plant (or a business).  It allows for new growth.  I agree with you, John, and I am glad to see Starbucks focusing on their key business, including those stores that offer the most success to the company. 

However, too much pruning, or cuts in the wrong places, can severely damage the plant.  What remains can be ugly.  I am trusting that Starbucks is not going into “cost cutting” mode (and I hope you are right, John, that they are not) but is truly using the shears as part of a long-term strategy for business health and happiness.