NAME: HEMANTH KUMAR R

SUBJECT: STRATEGY AND LEADERSHIP

LECTURER: JOHN LEO

DATE: 06/07/2012

STARBUCKS CUSTOMER SERVICEREFLECTIVE JOURNAL

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EXECUTIVE SUMMARY:

Starbucks captures people who are on the go into a slow and relaxing European

lifestyle. With the potential to capture customers, Howard Schultz brought back the café late.

This was gourmet coffee introduced to America. Through tradition, advancement, rhetoric of

advertising, growth of demand for gourmet coffee, customers become loyal to a Starbucks

Nation. Within this nation, customers are able to spend as much time as they want, either

reading a paper, or surfing the web. Starbucks customers are also allowed to enjoy its

natural-looking habitat.

Starbucks also follows a unique strategy wherein the employees have the power to

take decision without taking up the issue to his/her manager. They also want to minimize the

waiting time for the regular customers and take the customer and employee relationship to

next level. Starbucks make sure that the employees are aware of the drinks and the

preparation of the drink so that, if a customer wants to know the steps to prepare it the barista

should explain them step by step.  To increase customer satisfaction, the company is debating

a plan that would increase the amount of labour in the stores and theoretically increase speed-

of-service. If customers have suggestions to improve Starbucks, they are able to input their

own ideas on the Starbucks website.

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BODY:

Key Findings:

Starbucks is the leader in coffee shop retailing. They have accomplished this through

superb products and priding themselves on customer service. By creating positive customer

service, Starbucks has created a large base of loyal customers. Mr Schultz, owner of

Starbucks stated, “We aren’t in the coffee business, serving people. We are in the people

business serving coffee.” (Serwer, 2004) Directly alongside product quality is customer

satisfaction. Starbucks wants to encourage purpose, commitment, and enthusiasm among

employees. Starbucks has found that in order to accomplish this, they must have the best

front line workers.

Creating strong customer service begins with the employee. If the employee does not

take pride in his/her work, it will be reflected in their service to the customer. One of

Starbucks key concepts is, “employees should be fully versed in how to make drinks and how

to market them as well. They should be able to describe contents and, especially if it’s part of

the job description, spell the item correctly on a chalkboard or a menu.

Strategy of Starbucks Customer Service:

Authority to take decisions:

Employees are encouraged to make their own rational decisions when dealing with

customer problems. Starbucks likes to see the employee fix the problem instead of running to

the manager for assistance. Some people might be apprehensive to this, but “Starbucks wants

you to use your best judgment to create satisfied customers, and Starbucks will stand behind

the decision you make.” By giving front line employees this control, the employees feel more

like their own manager instead of just a “worker bee.” The employee’s positive attitude is

reflected on their work and relationships with customers. (Filipczak & Bob, 1995)

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Minimizing the gap between Customer and Employee:

Starbucks wants employees and customers to interact on a personal level. In some

stores, when a regular customer pulls up, they begin making the drink and have it ready by

the time the customer has parked and reached the counter. This goes a long way in customer

satisfaction. (Filipczak & Bob, 1995)

Employees are more knowledgeable:

Being knowledgeable, employees can point customers in the direction of the perfect

coffee. If the product desired is not exactly on the menu, it will be altered to the customers’

preference. These concepts would not be attainable if the employees didn’t truly love their

job. Also by knowing the entire menu inside and out, drinks can be produced at a very fast

rate leaving customers standing for a short time. This also helps with lines in the morning

when everyone wants coffee before work.

Most of the customers ask baristas how to make their favourite drink at home. Every

barista asked has always taken the time to thoroughly describe the process and has never said,

“Sorry, I’m too busy.” (Filipczak & Bob, 1995)

By providing these strategies Starbucks has a competitive advantage compared with

its competitors. These strategies also create a positive atmosphere and customers are

immediately drawn in. Schultz stated, “Starbucks is a place to feel comfort. Place to feel

safe. Place to feel like you belong.” (Starbucks) He goes on to say when speaking of a foreign

café he experienced, “It was on extension of people’s front porch. It was an emotional

experience.” Schultz wanted this feeling in his own stores and through proper employee

training; he has accomplished a high level of comfort with customers.

Consider ways in which your brand can learn from your customers. Starbucks does a

great job of listening and interacting with its people. Through MyStarbuckIdea.com,

Facebook and Twitter, Starbucks solicits customer feedback and creates one-to-one and one-

to-many relationships.

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Starbucks obviously values great customer relations. Unlike many companies who

claim that good customer relations is priority-one but often fail to prove it, Starbucks

continually lives up to this claim. That is why they are successful. Well, that and good coffee.

Limitations of Starbucks Customer Service:

From training the staff, they might face with the brain drain which might create more

rivals later on because they have chance to learn the firm core competence betray them later.

Due to an increase in number of Starbucks customers and highly customized drink

demand, the workload per worker is very high. This fact results in a decrease in service time

and conversation between Starbucks baristas and the customer, and more stress on baristas.

Moreover, the research found that a large number of customers emphasize that they are

treated as a valuable customer, friendly staff and fast service are the most important factors in

creating customer satisfaction.

Starbucks has focused on various aspects in order to deliver excellent customer

satisfaction. The key factor that they need to recognize is that they need to realize how they

are serving their customer. Starbucks does have other factors that it ranks high in, but that is

only part of the picture. Customer service is the key to Starbucks being recognized as the

industry leader in gourmet coffee and coffee drinks for years to come.

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RECOMMENDATIONS:

They must increase labour hours per store in order to solve the problem with the

quality of service. Starbucks should also set up an internal strategic marketing team. This will

allow Starbucks to have a proactive feedback of customer satisfaction and hence faster

improvement. We also noticed that labour cost is high for Starbucks North American

operations. To keep labour cost at reasonable level, Starbucks should reduce waste in making

drinks, keep consistency in drinks, and improving productivity. (Lockyer & Sarah, (2004)

Starbucks have the feature for the customer to provide the feedback about the service.

However, every Starbucks customer does not get a survey completion receipt upon purchase.

It’s rare and occasional. They must give the survey to everyone so that, they have more ideas

from the customer to look into it.

Survey offered to the customer must be completed before the expiration date or else

the valuable Survey receipt will go waste. They must work in this so that, the customer is

provided with some considerable time to complete the survey.

Risks of entering a scam Starbucks survey is there if the customers don’t get into it

through the official site. This is important for every Starbucks customer to know since it

would be then wasting time in completing a survey questionnaire which will eventually get

them nothing.

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REFLECTIVE COMMENTS:

Starbucks' employees share common goals, such as believing in the product they sell.

Starbucks employees are referred to as partners, and even part-time employees are eligible to

receive health-care, owning stock in the company, and get free coffee! All Starbucks'

employees are well trained. The investment in training obviously pays off, as Starbucks has a

far lesser turnaround than the industry average. 

Employees should continue to be Starbucks' most important asset, and resource. The

extremely low turnover rate of employee has contributed to the development of Starbucks'

image, and brand image is vital to the future success of the expanding company.

Employees are trained on both “hard skills” and “soft skills” when hired to work for a

Starbucks retail store. This equal emphasis on the “hard” and “soft” skills further highlighted

Starbucks strategy to make the experience pleasant for the customer.  The “soft skills” were a

way to teach the employees on how to connect with the customer, by establishing eye

contact, smiling and greeting them with their names when the customers were regulars. In

addition to that there was also the “Just Say Yes” policy for which the employees went

beyond company rules in order to satisfy the customers. These again created a friendly

environment for customers who felt special and in combination with the two points

mentioned above increased their customer satisfaction.

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References

Filipczak, & Bob. (1995). “Training.”. Business Media , p. 73.

Lockyer, & Sarah. ((2004). “Full Steam Ahead: Starbucks Plans Strategies to Keep Growth .

Nation’s Restaurant News, p. 4.

Serwer, A. (2004). Hot Starbucks to Go. Fortune, pp. 60-64.

Starbucks. (n.d.). Starbucks. Retrieved from http://www.starbucks.com