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)

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)

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)

Advertising Trends – It is All About You

 Something different drove past us this weekend here in the San Diego area: a Safeco-sponsored truck with a moped, cello, and chair on pedestals.  Not just a picture of these things, but the actual objects.  It certainly caught my eye, and we snapped a quick shot of it with a cell phone (yes, the text in the photo is in Spanish – the other side was in English, but we would’ve had to run into traffic to get that one!).

I have noticed more and more advertising, from television to radio to mobile billboards touting the ability for customers to make it personal.  I grew up on “Have it Your Way at Burger King” jingles, so this may not seem new.  Here at Customers Rock!, we always encourage companies to customize their offerings (in the most efficient way, of course).  My observation is that companies are finally starting to see this as a differentiator and are advertising it.

However, it won’t really make the desired impact unless the customer knowledge gained from working on personalizing products and services is used to improve the customer’s experience – leading to a longer relationship.  In a slowing economy, the strength of these relationships will help companies weather the difficult times.  Not slick ads (although this truck really did look pretty cool!).

What do you think?

(Photo credit: T. Carroll)

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)

Focus on WOW for Customers

 I just got back from my local branch of Wells Fargo, and something caught my eye behind the friendly teller, Jennifer.  Another employee was preparing a chart to go on the wall entitled, “11 Ways to WOW the Customer.”  Of course, being the customer-focused professional that I am, I had to ask about the chart.

Great Customer Service

Jennifer told me it was to help remind the team about customer service, with the main goal being that customers feel welcome each time they come into the bank.  They want the experience to be such a good one that customers will seek them out for their future banking activities, even if this is not their home branch.  Most of the items on the chart are simple, such as welcoming customers into the bank verbally when they come in the door.  Smiling.  Or, as she said, “Keeping your grump to yourself!”

This is consistent with Wells Fargo’s corporate focus on customers.  Here is an excerpt from the Customer Service page on their website, describing the 11 Ways to WOW.

“Welcoming”

• you make me feel at home.
• you care about me.
• you make me feel special.

“Delivering value”

• you give me the right advice.
• you provide me value.
• you keep your promises.

“Following up and building relationships”

• you help me when I really need it.
• you know me.
• when you make a mistake you make things even better.
• you thank me.
• you reach out to me.

Employee Retention

Jennifer said this customer focus makes the branch experience not only better for customers, but also better for her and the other employees that work there.  She enjoys her job more when she is able to truly help customers with their needs.  She spends time talking to them about the task at hand, but she also spends time listening to them talk about their lives.  Customers have become her regulars, and one of them even brought in not one, but two cakes for the team.  The pace at this branch is a little more leisurely, so the employees there have time to chat with customers, their kids, and even their dogs!

I love this line, again from the Wells Fargo website: “We’re only as good as our first impression and last connection. This is all about culture and attitude.”

That, my friends, is what this blog is all about. 

 

WOW Your Customers

I encourage each of you to think of how you can WOW your customers.  Don’t leave it to chance or count on just hiring great employees.  That is not enough.  Customers Rock! companies set a goal for WOW customer interactions, then they make a specific plan to meet that goal.  Finally, they check back with their customers to see whether they made a difference from the customer’s perspective.

Jennifer, you guys rock!  Thanks for making it special, and I will work on baking you some cookies for the next time I come in…

(Photo credit: ChrisL_AK)

Bungie Rocks! Fixing (someone else’s) Customer Service Error

 When a person sends in a device to customer service for a repair, there is a certain amount of trust that is given by the customer. They trust it will be fixed.  They trust it will come back in one piece.  And in the case of a loyal Halo video game fanatic, he trusted it would be returned to him will all his memorabilia still intact! (Hat tip to bs angel at Hawty McBloggy , who gets full credit for the info on the story details and these images.)

The Problem

Nathaniel is a fan of the Halo video game franchise created by Bungie.  When he purchased his XBox 360 (pre-ordered it!), he started taking it with him to get autographs from the folks involved with creating his favorite game.  He had accumulated quite a few autographs from the gaming studio and the XBox 360 team, in addition to some artwork from notable gaming artists, which were written in black permanent ink directly onto his gaming console (see photo at top for a view of some of the goodies he had on there).  Notice I keep using the word “had”.  Nathaniel’s beloved XBox 360 console stopped working, and although he debated about it, Nathaniel sent it in to Microsoft to have it repaired. 

To ensure his valuable console would be returned unscathed, he called customer support at Microsoft to see if they could promise to protect this decorated casing.  They said they wouldn’t harm it and would return it the same way it came to them.  Not convinced, Nathaniel also included a letter with his XBox 360 when he sent it in asking that the technicians be careful not to smudge the artwork.  He additionally requested that if the inside of the console needed to be replaced, would they please be so kind as to return his original case with new innards.

Crushed! 

Well, Nathaniel did get back his original case (the serial numbers match his original one), but it was wiped completely clean.  No autographs.  No cool artwork.  Only a few hints of permanent marker remained where previously there had been treasured memorabilia.  To read the full story, you can go over to Hawty McBloggy, who documented the letter that Nathaniel sent and the results in this first post on the subject.

Now hang in there with me, Customers Rock! readers, because even though this story took a negative turn, the ending totally rocks!

Nathaniel was crushed, as you can imagine.  The Hawty McBloggy blog decided to help him share his story with the gaming community to make sure none of them got stuck like he did.   At the time, all of Nathaniel’s questions to Microsoft were going unanswered.  The gaming community, however, rallied around Nathaniel – there are over 700 comments to bs angel’s original story on this!

Heroes to the Rescue

 Bungie Studios, the creators of Halo (and their most recent version, Halo 3), also heard about what happened.  Even though they weren’t remotely responsible for this error made in console tech support, they wanted to do something about it to help make it right.  Only a few days later, a huge box arrived on Nathaniel’s doorstep – absolutely stuffed with cool Bungie “swag”.   Bungie is well known by the gaming community for treating their fans like royalty, but this one must be a record, even for them!  Here is a list of what he received (documented by bs angel):

Included in the Halo swag bag were :

• Legendary Edition Helmet signed by most–if not all–of the studio staff (see photo)
• Halo 3 Soundtrack (two disc) signed by Marty O’Donnel (with “DO NOT ERASE!” written under his name)
• Bungie Jacket
• Bungie T-Shirt
• Halo 3 Messenger Bag
• Two Halo 3 Limited Edition Wireless Controllers (one covenant, one human)
• Halo 3 Faceplate and Skins for Xbox 360
• Four McFarlane Action Figures (MC, EVA Spartan, Brute Chieftan, Jackal Sniper)
• Halo Actionclix Preview pack (Target exclusive sticker on the front)
• Halo Actionclix Game Pack 4
• Halo 3 Wall Graffix
• Halo 3: Ghosts of Onyx Novel
• Halo Graphic Novel
• Halo 3 Wristband
• Halo 3 Hackeysack

Nathaniel was overwhelmed by their generosity and the support of the whole gaming community.  Here is his reaction:

“And finally, to the staff of Bungie Studios: I cannot thank you enough for the outpouring of support that you have lavished upon me in the aftermath of the release of my story. Long have I known of your dedication to your fans and community, but I find this single act of kindness mind boggling. Apart from the fact that a few of you had signatures adorning my console, you had no involvement in what occurred. As such, you have far surpassed any response I could have anticipated. I don’t think I could ever repay you for this.”

This unexpected response from Bungie totally rocks!

The Community’s Response

Yes, Bungie Studios now has a fan for life in Nathaniel, and in his friends I’m sure, as he will be spreading the word far and wide.  bs angel’s blog has also helped to spread the word – both the sad saga as well as the happy ending.  There are over 200 comments to the second post detailing the “swag” sent by Bungie, and most of them are Bungie fans saying how cool the company is for doing this!  Here are some sample (verbatim) comments:

• bungie rocks. i’ve never seen a company so in touch with their fan-base before.
• Just more confirmation why we all love Bungie so much.
• It would be a massive boon to society as a whole, if somehow most of the corporate world would follow Bungie’s lead. They seem to always give back that huge amount of extra.
• Good Job Bungie.
  Handled like a company that appreciates its customers.
• Class all the way.
  It’s little gestures like this that make a good business truly great.
• More companies need to do more things like this. The world is losing sight that back in the day “mom and pop” shops would do things like this all the time.

And these comments, folks, are only a few from this gaming community.  Bungie just created a huge list of raving fans by how they responded to this incident. 

How did Bungie do it?

– They were listening to their customers, using social media.

– They had previously built up a strong community (see their website for forums, insider information, and an open and honest attitude including Bungie podcasts, photos, and webcams!)

– They decided to “do the right thing”, even though they were not the ones in the wrong (the console manufacturer made the error, not the video game studio)

– Bungie has prioritized customers as a critical success factor for their business – and has acted on it.

Clearly, Customers Rock! for Bungie Studios.  Way to go, Bungie!

Social Media Live!

 

The more I talk about and use social media, the more I have been stressing a few key points.

• Social media is one tool in the toolbox for interacting with customers.  It will work well if customers are willing to engage in that medium!
• Social media is a great tool to help create and strengthen relationships.
• It is all about the people.

In my recent talk on Social Media and Customer Loyalty for the Direct Marketing Association, I used the case study of the Washington Humane Society.  Tara de Nicolas is their director of marketing, primary author of their blog, and director of their social media strategy – which includes Facebook, MySpace, flickr, and YouTube, for the moment.  (For more info on their blog, see Geoff Livingston’s post where he interviewed Tara – thanks for the info, Geoff!)  Tara and her team use their social media channels to connect with potential adopters, families that have already adopted, and donors.  Quite a community has developed, with the photos of the WHS staff being one of the areas that are most widely viewed.  As Tara told me in my interview with her, it is all about connecting with the people and putting a face on the Society.  Way to go, Tara and team!

Blogging is also about connecting with others, mostly online.  Recently, I have had the opportunity to connect live with two wonderful blogging friends: Doug Hanna of ServiceUntitled and Toby Bloomberg of Diva Marketing Blog: see the photos at the top of the blog post!

As much fun as it is to send emails and connect via blogs, there is nothing like a good ole fashioned face-to-face meeting to strengthen relationships.  Doug and I had the opportunity to connect in San Francisco for the Customer Service is the New Marketing conference, put on by Get Satisfaction, where we both gave workshops.  Toby and I met up for dinner when she came to San Diego to give a workshop for the American Marketing Association.  Both meet-ups were great fun, and I could see the blog personalities in the person, very clearly.  Toby even sent me a nice thank-you note afterwards, with a small toss of her trademark pink boa.  Thanks, Toby!!

A whole group of marketing and PR bloggers is getting together next month in New York City for a Blogger Social, put on by CK and Drew McLellan – wish I could be there!  Steve Woodruff is even profiling all the bloggers who are attending to help them get to know each other better.  You guys all rock!

Social media is indeed about building relationships and making existing bonds stronger.  It is a great way to get to know customers, as well as to make your organization seem more personal and authentic.  Use it as part of your marketing strategy, but be sure to complement it with the old-fashioned way of building relationships – face time – where you can.

Which Customer Matters Most?

 In a recent post, I gave an example of doing little things to grow a customer relationship.  It was a good reminder about using long-term rather than short-term thinking when it comes to customers.   An individual could look small now but be coming into a growth period due to their lifestage/change in status.  A small business customer today could acquire (or be acquired) tomorrow and become very valuable.

When I was with Peppers and Rogers Group, we spent a lot of time helping clients figure out how to measure this very thing, as well as creating action plans for each customer value segment.  Don Peppers and Martha Rogers also wrote a great book about this called Return on Customer.  I highly recommend it!

In a down economy, increasing the value of existing customers may be a critical success factor.   Here are some questions to ask yourself as you think about your customer base:

• Are we focused on growing our business organically through increasing share of wallet with each customer?  

Expanding business with existing customers is often the easiest way to grow.

• Are we looking for ways to get our community of customers engaged with us to the point where they become “passionistas” for our brand, sharing their enthusiasm with others?  

Brand ambassadors can do more for sales than our own marketing departments.

• Are we doing something as simple as thanking our existing customers for their continued business – without trying to sell them something? 

Whenever I speak to groups, I always get feedback on how many are making a point to simply thank their customers.  Most aren’t!

As on most Mondays, I was a guest today on the Big Biz Show, a nationally-syndicated radio program.  I was asked which company I considered to be tops at customer service.   I answered, “The Disney resorts.”  Each Cast Member (ie. employee) at a Disney resort goes out of their way to make each moment magical for guests (visitors).  I have had many wonderful experiences myself at Disney resorts, including an experience this past fall where I was overwhelmed by the generosity of a Disney Cast Member.

Over fifty years ago, Disney was one of the first to put customer service first and foremost; today, the Disney resorts are often viewed as a standard for other organizations.

Companies, such as Disney, that are held up as shining examples of customer service or customer focus usually do things a little differently.  They view their customer service department as a key contact point with customers – and measure their agents on customer satisfaction rather than talk time.  They put the customer experience at the center of their strategy.  They hire for people-skills first and foremost.  They empower employees to do the right thing for the customer.   They set expectations properly – then exceed them.  And they consider each interaction with a customer to be critical to the brand experience… 

Because you never know who will be your most valuable customer next month – or next year.

(Image credit:solarseven)