Moments of Buying @ Starbucks

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Since most purchases are driven by emotions–the conventional measurement methods either focus narrowly on selling process, or measure customer satisfaction on products, services and related attributes–there is a wide gap between how customers buy and what companies measure. We recommend a different approach* to address more than just our rational brain (Thinking), by assessing the selected criteria in physiological (5-sense), psychological (Emotions), time (Memory), and objective (BUY). Emotions are being quantified into measurable metrics by combining the art and science of customer experience management (CEM).


Moments of Buying @ Starbucks North America

Not all the sub-processes or attributes are equally important in influencing our buying behaviors. Diagram at the right shows the Moments of Buying (MOB)——attributes or sub-processes with the highest level of experience ratings and a high level of importance to purchase——for Starbucks North America**. By well covering our physiological and psychological needs, we know which attributes / sub-processes are currently driving customers to buy (the green dots); and which are driving customers away. (The red dots: sub-processes / attributes with a high level of importance to purchase but poorly performed, such as ‘See and be seen’, ‘Confortable seat’ and ‘Newspapers/magazines’)

With almost no exception, companies want to close sales today and make customers buy again tomorrow. This is the foundation for continuous cash flow and a profitable business. The question is: How effective are you in driving immediate purchase now and repeat purchases tomorrow?

Problems of High Churn and Low Closing Rate

Recently I have moved house from the West side to the East side. To save transportation time, I decided to find a new hair salon nearby for hair cut. There was one with nice decoration, reasonable price, and good service. At that moment, I thought I would settle there as a loyal customer. However, throughout the hair-cutting process, the hair stylist kept cross-selling me expensive treatment for baldness prevention. That was quite an annoying experience that became my unacceptable pain! Though I admitted that he cut my hair quite nice, I decided not to go back and this became my one off buying experience at the hair salon. (Effective in driving immediate sales but ineffective in driving repeat purchases)

I am always attracted by one retail fashion chain. Every time when I pass by, I can’t resist walking into the store and am in a ready-to-buy mode. It has great clothing, good services, pleasant atmosphere, affordable prices and nice in-store decorations. But strangely, I have left empty-handed in 90% of my visits. Though I have good impressions and feelings, I just don’t find any stimulus to make my purchase on-the-spot. The visits made me happy but didn’t make me buy. (Effective in driving repeat visits but ineffective in driving on-the-spot purchase)


Effectiveness in Driving Immediate and Repeat Purchases

Dilemma of Cost Control and Sales Effectiveness
I flew Singapore Airlines lately. Though the hot towel is still there and it has the widest selection of in-flight entertainment, the quality of meals is way below its normal standard and the smiles of the flight attendants are less genuine and warm. I heard the ever-increasing fuel expenses drive cost-cutting measures which may affect the quality of meals, and rescheduling of work shifts also reduce the rest time of flight attendants. Maybe I should go for Emirates next time!?

How to Drive Sales and Cut Cost, Simultaneously
It is expensive and requires tremendous efforts to acquire new customers. Are you retaining and growing the newly acquired customers, or driving them away? (Like the hair salon) To make customers happy should be the means——but not the ultimate goal——to make them buy. Are you making customers happy but forget to do the most important thing: close deal? (Like the fashion chain) Besides following cost-cutting practices such as United Airlines to end free meals for international flights, how could you handle the dilemma of cost control and retention in a downturn economy? (Like Singapore Airlines)

One approach is to find out what——attributes or moments (sub-processes)——really drive your customers to buy on-the-spot and to buy from you again. Align your resources to excelling on those attributes or sub-processes, eliminating the wastages and overspending on those non-influential ones——to improve sales and save resources, at the same time.

*Purchase Experience Assessment and Optimization Method is a management method for assessing and optimizing the baseline performance of touch-points in delivering an effective purchase experience. It includes four models: Purchase Experience Measurement; Moments of Buying Identification; Moments of Buying Synergies; and Purchase Experience Optimization. This methodology is created by Sampson Lee, president of Global CEM.

**The results are generated from the Global Starbucks In-store Experience Survey, co-organized by CustomerThink Corp. (U.S.) and Global CEM, September~October 2007.

2 COMMENTS

  1. Hi Sampson

    Great post. It is great that you share some of your methods and results from your CEM work with CustomerThink’s readers, unlike practically all of the other CEM vendors.

    I would be interested to see if you have any documented evidence that supports your suggestion that customers should BUY during each and every in-store visit, rather than sometimes simply being positively influenced. What if being pursuaded to buy led to post-purchase regret and future avoidance of the shop or negative word of mouth. Or worse, to shopping addiction and customer bankruptcy.

    Even in times of recession, retailers have to balance short-term sales with long-term value creation. Value is created by much more than just sales. That implies that not all store visits need lead to purchases by customers.

    So back to my question. What documented evidence do you have that customers should BUY during each and every in-store visit

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. Hi Graham

    Thanks, and I am glad you like this post.

    In fact, not only I don’t have the documented evidence to support that customers should BUY during each and every in-store visit, I also don’t think it should be the sole objective when designing any touch-point experience.

    That’s why even for Moments of Buying (MOB), we have options to identify the MOB(i) in driving an immediate purchase on-the-spot, and the MOB(r) in driving repeat purchases in future. It’s really important to strike the balance: “What if being pursuaded to buy led to post-purchase regret and future avoidance of the shop or negative word of mouth.”

    To achieve purposes other than sales, we have other options to identify the Moments of Differentiation (MOD) in delivering a branded experience, and the Moments of Truth @ Experience (X-MOT) in creating positive emotions and memories. As you said: “Even in times of recession, retailers have to balance short-term sales with long-term value creation. Value is created by much more than just sales.”

    We have the methodologies to drive and deliver the strategic focus on Sales, Branding or Satisfaction. Now it’s the call for business executives to make their own choice and combination at different touch-points (e.g. in-store, web, call), in different periods (e.g. at the beginning or in the middle of a recession), and for different customer segments (e.g. VIPs, low-value customers, high-value prospects).

    Sampson Lee
    The Effective Experience

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