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 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.
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!
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)