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)

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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.

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)

Recognizing Customers

 I have seen restaurants with their “customer wall of fame” before, but I think this one takes the cake!  Lighthouse Ice Cream and Yogurt is located in Ocean Beach, CA, just down the street from the Ocean Beach pier in San Diego.  I just happened to wander towards the back of their cute shop and noticed several sheets of white poster board hanging from ribbons, plastered with photos.  As the boards were unlabeled, I asked the lady behind the counter what they were.  She explained they have been taking photos of their customers for the last 10 years and posting them on the boards for all to see.  Then she took our photo and told us where it would be placed later in the month!

This is a quick and simple low-tech idea (she used a disposable camera – not digital).  It gives the impression that this ice cream shop has many, many fans.  In addition, it is a “feel good” for customers to have their photo added to the display.  As San Diego is such a dog-friendly community, there is even a “pet board” with photos of customer pets who have come in (the ice cream shop keeps a doggie water bowl outside the door for thirsty pups).

I love this display of customer recognition.  One way they could take it further would be to use a digital camera (or have the film developed onto a CD) and create a flickr or Facebook group of fans.  That way, anyone who visited there could interact, and it would raise their visibility on the web.  Maybe one of their local customers could even do it for them!

Either way, this is a fun way to let people know that you love your customers.  People want to frequent establishments that care about customers, and every little bit helps these days!

You rock, Lighthouse Ice Cream!

(Photo credit: B Carroll)

 

When Things Don’t Work: Tolerate or Leave?

 All of us have days when things don’t go the way they should.  Companies have those days, too.  Service goes down.  Planes don’t take off when they should.  A chef doesn’t show up for work.  Someone slams a product on a blog. 

When things get tough, the company’s response to the problem can make or break their reputation – and their customer base.

The outcome often depends on what kind of relationships have already been built with customers before the problem occurs.  Has the company had a history of listening to customers and reaching out to them in their own language?  Does the company empower employees to take care of things when they go wrong?  Does the company respond to blog posts and other social media conversations?  Does the company build customer loyalty by understanding their customers, then communicating with them the way they want to be communicated with?  These are all part of a strong customer strategy which will help organizations weather the storms which inevitably come.

If a company does have strong relationships with its customers and has built a loyal customer base, customers may cry foul but will most likely tolerate the issues.  They may be very forgiving, even sticking up for the company when others are trying to pull them down.  The customer base will remain with the company – critical in slow economic times!

On the flip side, if a company is only focused on trying to squelch negative comments, if they only talk about themselves, if they forget to take the customer’s perspective – then any falter or trip can result in disaster.  Grumpy customers and their comments come raining down.  Customers spray their problems all over the place, then leave – and take others with them.

Which kind of company do you want to work for? 

If you work for the first type of company, kudos to you!  Let’s hear some of your great stories!

If you work for the second type of company, I know a good customer strategy consultant that can help you… 😉

(Thank you to Brian Solis for the inspiration on this post!  Photo credit: ccaetano)

Re-Experiencing Starbucks: Update 6 – The Card

 Part 6 in the ongoing Re-Experiencing Starbucks series in partnership with Jay Ehret at The Marketing Spot.

Update!  I was just at my local Starbucks and had the opportunity to speak with two Starbucks partners (employees) who were there to review that store and its customer experience.  I was very impressed by the questions they were asking their customer (me) about the experience, as well as how they were seeking out my opinions for improvement.  Kudos to you, Starbucks, that you have great people working for you like Kevin and Marcus who really care about their customers!  🙂

Now, back to the post:

What is the latest on the Starbucks experience?  Let’s listen in to the Starbucks CEO, Howard Schultz.  Per Schultz’s latest Communication (#14),

I would like to reiterate that we are still in the early stages of our transformation and efforts to enhance our customers’ experience.  There is still much work to be done, but we will succeed.  Our summer, fall, and holiday promotional periods are coming up, which, I believe, will be enthusiastically embraced by our customers and partners.

I would tend to agree here with Mr. Schultz.  The Starbucks re-experience is still in its early stages as evidenced by the inconsistent execution of their revamped loyalty card program.  Now, my long-time readers know that I focus on the positive here at Customers Rock!, so I am reluctant to criticize.  However, I have not had good experiences with the new Starbucks card program, and I am not alone. Both Leslie Price at Racked and John Blue at InnovationCreation have recently blogged about some frustrating card experiences.

The main concern seems to be the process by which Starbucks partners (employees) apply the discounts that should be available to the owner of a registered Starbucks card.  According to the Starbucks website, benefits of a registered Starbucks card include free shots of syrup, free brewed coffee refills, and free coffee with a whole bean purchase.  I was pretty excited about this, since I like to add syrup to some of my coffee drinks.

However, I also discovered that, unless I inform the barista ahead of time that my Starbucks card is registered, the discounts are not applied.  In other words, the Starbucks card database is not tied to the cash register system.  In one case, I told the Starbucks barista that my card was registered before I ordered my sweetened Iced Tea, and her response was, “Well, it doesn’t make any difference with your order.”

I do know that if someone has a problem with their drink or transaction, Starbucks will fix it for you; often they will give you a free drink coupon for next time.  However, this doesn’t always make up for the inconvenience for the customer doing the ordering (or the customers behind them in line who have to wait).

Recommendations

As with any new program, there are always kinks to be worked out.  However, it does seem a little short-sighted to implement this type of program and expect the customer to take full responsibility for reminding the store about the discount.  For this very reason, it is always recommended to think through a new customer-facing program (especially a loyalty program) before implementing.  This should include goals for the program, operational details, the stages of the customer’s experience, and the measures of success.

I would recommend that Starbucks quickly have each barista ask a simple question of each customer using a Starbucks card: “Is this card registered?”  They may have a few people that sneak in, but for the most part, customers are honest and will do the right thing.  It would certainly make the customer experience much better.

Also see Jay Ehret’s blog The Marketing Spot for more Starbucks insight.

Related Customers Rock! posts in the Re-Experiencing Starbucks project series:

Re-Experiencing Starbucks

Part 2: Transformation Starting

Part 3: The Training

Part 4: Little Things

Part 5: MyStarbucksIdea

(Photo credit: mightykenny)

Coldwater Creek Gives Customers the Royal Treatment

 I love the way Coldwater Creek keeps their customers engaged through their marketing.  Of course, there are the regular catalog and emails that come out; nothing too special about those.  However, I just got an offer from them to be treated like royalty, and it made me smile.

I received a note card from Coldwater Creek with this on the front:

“Fashion and relaxation fit for a queen.  Without those annoying hats.”

The graphic shows pictures of crowns and tiaras, along with their brand.  Inside, I find that my friends and I are invited to Coldwater Creek’s version of High Tea, along with a product demo and drawings.  This particular store is well suited to this, as they also have a Coldwater Creek – The Spa at the same location.  The copy inside the card is “royal”, talking about “courtly prizes” for you and “your entourage”.  Very nicely done.

Of course, I called the store to find out more.  Between the hours of 4 and 7 pm, they are basically holding an open house for customers with lots of goodies to eat (pastries, cakes) and drink (tea mostly!), along with the chance to show-off both clothing and spa products.  It is not just for those who received the invitation; anyone shopping that evening can also partake.  But only existing local customers received the invitation.

Royal Treatment

This particular mailing was refreshingly different.  It made me feel special.  It made me feel noticed.  Too many direct mailings are to push products or send invoices.  Coldwater Creek did a great job of standing out with a fun direct mail piece that caters to their customers.  Yes, “old school” techniques still work in this social media world!

You rock, Coldwater Creek.  Cheers!

(Photo credit: Scanty)

Focus on the Customer Experience

 There are so many ways we can focus on our customer.  I wanted to share a very cool post from one of my favorite bloggers, Doug Meacham of NextUp.  Doug is one of the first bloggers I started a conversation with back when I began this blog at the end of 2006 (he has also been one of those trying to get me to start Twittering – I am getting closer, Doug!).

Doug’s post is a great list from another Doug, Doug Fleener at Retail Contrarian, sharing 50 ways to improve the customer experience (note – there are actually 51 – added value).  This is near and dear to my heart!  Most of these apply directly to retail and consumer-based businesses, but they should also be considered for other customer-friendly folks.  Here are a few of the items that I especially liked:

“8. Send handwritten thank-you notes. Come on, do you really do it?”

Come on, really.  Do it!

“15. If you can’t fulfill a customer’s need, suggest another company that may be able to do so.”

Zappos.com does this if they can’t find the shoes you are looking for.  Awesome customer service.

“46. Partner with restaurants and other stores to present exclusive discounts and offers to your customers. (A win-win-win. The other company gets incremental revenue, your customer saves money, and you’re the nice person doing it for both of them.)”

I like this one because, through partnering, your company is able to offer added value (there’s that phrase again!) to customers. This can be a key factor in increasing customer loyalty.  I heard a recent example of this in some interviews I was conducting for a retail client.  The retailer’s store is on a street in a shopping district with several other retailers.  In order to give a reward to loyal customers, the street is holding a drawing for Mother’s Day.  The lucky winner will get one prize from each store or restaurant on the block, including free meals, spa treatments, and clothes.  How fun is that?

Of course, as I mentioned to the Doug(s) in my comments, the best way to take care of your customers is to do the above within the framework of a proactive strategy.   Planning for a great customer experience will make all the difference between “random acts of customer service” and a consistent experience. 

What works for you?  Please share some of your best customer experience ideas with us either by email or in the comments on any of the above blogs.  I will be sure to link to you here at Customers Rock!

(Photo credit: jchambers) (Note – WordPress.com’s photo uploader isn’t working; this photo is coming soon!)  Finally working!

Right-Selling Customers

 I read an interesting article on “Scientific Selling”, which started with the following tagline:

“The way in which a customer is handled has much to do with results obtained.”

How true that is!  It goes on to discuss how a customer cannot be “up-sold” unless that customer is thoroughly understood.

“The worst evil in selling is the action of the man who merely gives the customer what he asks for.  The man who does this is not a salesman, he is just a clerk.”

This article, by the way, is from the New York Times and was printed June 18, 1922!  It still rings true today. 

We need to understand not just who our customers are and what they say they want, but we also need to understand how they are currently using our products and services.  Yesterday, I spoke with Nancy Arter and Suzanne Obermire at RRW Consulting (their blog here) about the marketing basic of “right selling” customers.  We agreed that the most-satisfied customers tend to be those who are using the products and services which are a best fit for their needs.

For example, when I was at HP, I worked in the division where we marketed service subscriptions for HP’s mainframe computers to businesses.  Part of the service subscription included software updates and the ability to contact the call center (this was before eSupport was prevalent!).  At the end of the year, a customer could decide whether to renew their subscription.  If they never called in with a problem, they might have felt that they didn’t get value from their investment.  The most successful subscription services salespeople (say that three times fast!) were those that helped a business find the right level of service for the next year, rather than trying to renew them on the same (under-utilized) level of service.

Some of you may be thinking, hey, they left money on the table!  You should just try and get the most from the customer.  This, readers, is short-term thinking – trying to maximize the amount of revenues this quarter or year.  This type of thinking backfires when a customer realizes they have been over-paying for services they don’t use, and they then get upset that they weren’t told they could have switched to a subscription which was a better fit. (Does this sound familiar – cell phone plans come to mind…)

The long-term viewpoint says we want our customers to have the right level of service.  That may mean that they reduce the level of service they have with us.  However, if it is the right level of service, the customer will ultimately be more satisfied.  Customer satisfaction equates to long-term loyalty, which equates to increased positive word of mouth.

And that is what right-selling is all about!

(Flickr photo credit: TimParkinson)