What Starbucks Can Teach You About Business Strategy
Todd and Brian are leaving Chicago for L.A. and I can’t be any sadder. When Brian broke the news today I have to say I teared up a little thinking of all the things I’ll miss about them. I’ll miss Todd’s sunshine smile. Brian’s whimsical wit. How they sang Chaka Khan in perfect tune. Pretty attached to two people whose last names I don’t even know.
They both work at Starbucks and other than being a lesson in how I get too easily attached to strangers, the moral of this story reveals one of the most underrated lessons of business strategy–giving good customer service.
Good Customer Experience: A Winning Business Strategy
Yeah we know, you’re busy. People order stuff and they complain when they get it, even though THEY ordered it wrong. We understand. Customers can be difficult. But they’re also how you pay the rent. And if you don’t keep them coming back they’ll just go somewhere else. In a recent Accenture report, about 85% of 13,000 customers surveyed said they get frustrated with companies that do not make it easy to do business with them. And they’ll switch to another provider just like people switch cell phone companies.
Customers aren’t loyal anymore.
From the moment your customer finds you online, to the minute they click on “buy” to purchase and all the way until the product is shipped to their home, you have to be sure they’re satisfied or you’ll have more bills than money.
Bottom line: Focus on the customer experience or risk a blow up of your business strategy. How a customer feels about your company matters. A lot. From the Accenture report:
- 51 percent of U.S. consumers switched service providers in the past year due to poor customer service experiences, up five percent from 2012.
- 91 percent [of survey] respondents are frustrated that they have to contact a company multiple times for the same reason
- 90 percent frustrated by being put on hold for a long time
- 89 percent frustrated by having to repeat their issue to multiple representatives
Starbucks Business Strategy for Customer Experience
I don’t even drink coffee and I go to Starbucks about three times a week. That’s a good business strategy. Todd and Brian often served me tea or a refresher on my way to work. Their cheery disposition, the fact that Todd ALWAYS spells my name right or that Brian has my order ready before I can whip out my credit card is why I go to Starbucks.
Serving more than 5 million customers a day can’t be easy but Starbucks works hard to make it look so.
Here’s how they do it:
- Satisfying customers is in their core values. “With our partners, our coffee and our customers at our core…Creating a culture of warmth and belonging, where everyone is welcome.
- They trained employees on how to deliver great customer service. A Starbucks executive tells about this in a 2003 Harvard Business Case Study: “In our training manual, we explicitly teach partners to connect with customers—to enthusiastically welcome them to the store, to establish eye contact, to smile, and to try to remember their names and orders if they’re regulars. We also encourage partners to create conversations with customers using questions that require more than a yes or no answer.”
- They measured the impact of customer service. That same Harvard case study tells how Starbucks executive Christine Day came up with an idea to invest $40 million to improve customer service but wanted data to back her up. Starbucks found increasing customer service increased a customer’s spending by 9%. That justified the investment.
Starbucks Business Strategy Takeaways for You
Your turn. In a brilliant blog post “Improve Customer Service in 60 minutes or Less,” customer experience shaman Jeannie Walters offers some great, easily done ways to make your business more customer-focused. Some highlights:
- “Grab a cup of coffee with a front-line employee.” If anyone can tell you what’s going on with customers it’s the people who deal with them everyday. If you’re one of those people then grab a cup of coffee with your CEO and let him know how customers are faring. And if you’re the CEO and dealing with customers you might want to think about hiring someone to provide the customer experience that it’s difficult for one person–even someone as awesome as yourself–can provide.
- “Turn the weekly metrics report into definable action steps.” If you’re thinking “What weekly metrics report…” it might be time to start tracking customer experience. You can do so easily just by tracking three events–response time, complaint resolution and customer satisfaction.
- Find the right people and allow them to do what they do. Training your employees to deliver great customer experience or, as Zappos calls it, “happiness,” is the first step. The next is finding people who do this naturally and put them in charge. You know the person who always has the birthday cake and card ready for the whole shop to sign on the birthday of the guy you can’t remember his name. Or the woman who sings “Good morning,” every morning as they come into the office. Or the guy who always has a good word to say about everyone. Those people. Put them in charge of helping others help your customers.
Business Strategy Begins with Customers
No business strategy would succeed without customer growth. Your customers demand a lot from you. Don’t whine. Deliver. Invest in a good customer experience strategy. It can only help you.