I think it’s safe to say that Starbucks is a true love brand, with fans all over the world being genuinely happy when they find their favourite drink in a foreign city. That’s not a coincidence, of course. Starbucks worked hard to get where it is today – almost 33.000 cafes globally, about half of which outside the US, in 83 countries in total – and it works even harder to maintain that position in a pandemic world where retail and touch have been severely under threat. It goes without saying that their customer experience obsession has played an enormous part here.
This is what we can learn from them with regards to CX:
During my keynotes, I often get the question “Where should we focus on if we work in a commodity business?”. I always confront them with questions of my own, when they do: “Is there really such a thing as a commodity business? Isn’t that just something that happens when we allow ourselves to become boring and by not being unique?”
Every organization has a unique story to tell. Every organization can add services on top of the products that they deliver. If you are in a “commodity” market, just figure out what the services are that you can build around it. Starbucks completely understands that. When they launched themselves, Americans bought coffee beans in the store and made their coffee at home, resulting in low coffee quality and experience. They believed that US customers might embrace the Italian coffee culture, if they only added local elements to mix Italian coffee culture with the US culture and created a personalized experience. And to make sure that the customers would keep coming back they invested a lot in customer service and in-store experience.
There is no such thing as a commodity. If it’s boring, make it interesting again. Starbucks did it with coffee, Nike did it with sneakers and Lumi did it with diapers. And so can you.
You can drink your favourite Starbucks beverage almost everywhere in the world: Europe, the Americas, Africa, Asia and Oceania. Starbucks knows that diversification is not just linked to product and service, but to location as well. It literally has the ambition to be everywhere, in cities and increasingly in suburbs as well.
But it does diversify its products and services just as much. From new types of (seasonal) flavours, to premium segments with a sub-chain of top-tier stores, the Reserve Roastery & Taste Rooms, or new forms of payment, pickup and delivery: it keeps investigating how it can offer a better experience to customers. An important part of this strategy is offering a seamless blend (pun intended) between the online and offline contact points: ordering via the app and picking it up curb side on designated parking spots, having the drinks delivered through Uber eats or even ordering through the Alexa skills marketplace.
Especially in so called “commodity” businesses, diversification is key to keep reinventing yourself along with the customer.
Prior to the pandemic, Starbucks had already discovered that about 80% of US transactions were “on the go”. So it was already planning to facilitate that direction for its customers. When the pandemic hit, it was prepared. But being prepared does not equal to knowing how to react quickly to certain trends, of course.
Starbucks did have that intelligence of reaction and speed, though. Partly because it had no other choice, partly because it was prepared and partly because, as an organization, it was agile and resilient. And so it was able to quickly scale its minimum-contact concepts like the Starbucks Pickup, (order via the app and go to a pick-up only location), its drive-thrus (from 60% of its stores to 80%), walk-up windows and curb-side pickups. You have to realize that this fast shift was not easy for a brand that had a unique and physical “third place” strategy: “the place between work and home that customers could go to meet friends, get work done, or simply hang out”. But they were able to realize the transformation with great success.
The “Save the world” strategy is one of three three pillars in my latest book “The Offer You Can’t Refuse”. Here they are, to refresh your mind:
- Transactional convenience,
- Partner in Life,
- Saving the world.
I believe that companies which want to stay relevant in the coming years, will need to find ways to turn the immense environmental and societal challenges that we are facing into opportunities for both their customers and themselves. I’m not talking about nicely sounding but empty slogans and missions but about genuine endeavors to change production, collaboration, energy use etc. in ways that are better for all.
Starbucks has for instance made the commitment to purchase 100 percent ethically sourced coffee. And today, it is only 1 percent away from meeting that goal. What’s more, a Microsoft blockchain solution allows its supply chain participants to trace both the movement of their coffee and its transformation from bean to final bag.
Starbucks also has a strategic partnership with Feeding America, donating food at closing time. It also supports farmer loans and forest conservation programs and creates opportunities through education, training and employment. It’s continuously looking to reduce its environmental footprint through energy and water conservation, recycling and green construction. And it aspires to be resource positive – storing more carbon than it emits, eliminating waste, and providing more clean freshwater than it uses.
I’ll never get tired of saying this, but how you interact with your employees immediately reflects on how they treat your customers. Treat them right and they will be happy and that happiness will be passed on to customers. Howard Schultz too – CEO of Starbucks from 1986 to 2000 and from 2008 to 2017 – was a big believer in the fact that happy employees would lead to higher customer satisfaction.
Starbucks employees are in fact called partners. They are purposely paid more than the industry average and receive many perks, like health coverage, profit sharing, training support and all kinds of bonusses. For instance, Starbucks offers 100 percent tuition coverage for employees through a partnership with the Arizona State University. Since the launch of the program in 2014, more than 6,500 partners have earned first-time bachelor’s degrees. It’s also very focused on driving diversity, through veteran and refugee programs or youth hiring initiatives.
If you enjoyed this article, please check out my latest e-book ‘The CX leader’s manual to customer excellence’ where I describe the essential basics for great customer experience + 9 more cases like the one in this blog.
You can download the free e-book here!