When Starbucks set out to create a customer experience that nurtures loyalty - not only to the product but to the brand itself - the company drew up five core business principles that brought about its success, according to the new book, 'The Starbucks Experience', by Joseph A. Michelli, Ph.D.
In the book, The Starbucks Experience - 5 Principles for Turning Ordinary into Extraordinary (McGraw-Hill Industry), Michelli explores the coffee seller's rich mix of ideas and techniques that define the Starbucks vision and creativity.
The Starbucks name is now synonymous with coffee. Some 40 million customers visit a Starbucks location on a weekly basis, and the most loyal customers visit an average of 18 times per month. Moreover, the company's employee turnover rate is 250% below the industry average. The company now opens an average of 5 new locations every day of the year. This, Michelli argues, suggests that Starbucks is doing something right. Very right.
The right combination
The book shows how employee motivation, excellent customer service and satisfaction, and community involvement all go together to build a great company.
"Whether you're the CEO of a Fortune 500 company, a part-time entry-level worker, a middle manager, or the owner of a small business, Starbucks' five core business principles can be applied to your career, workplace, and company," explained Michelli.
The five principles
In summary, the five principles used by Starbucks include:
- Make it your own
Starbucks "partners" (employees) think about customer service in a way that allows each of them to connect with their customers on a very personal level. According to Starbucks chairman, Howard Schultz, "We are not in the coffee business serving people; we are in the people business serving coffee."
- Everything matters
Paying attention to absolutely every detail gives Starbucks a competitive advantage because it builds loyalty among patrons. "Managers have to constantly put themselves in the shoes of their customers, seeing everything from the other side of the counter," explained Michelli.
- Surprise and delight
Starbucks insists that it is critical to deliver consistent product and service to delight customers. But on top of consistent quality, Starbucks partners look for ways to surprise and engage consumers in a process of discovery. In an example of the importance of surprise, Starbucks gave out free cups of Calm tea on 15th April - in anticipation that their customers would be frazzled by their tax deadline.
- Embrace resistance
Starbucks encounters many forms of resistance from communities, international organisations and, at times, customers. Both at the leadership and front line levels, Starbucks has benefited from criticism and used it to become stronger and better able to meet the needs of those who share their input.
- Leave your mark
People want to do business with and work for companies that are socially conscientious. In addition to its corporate philanthropy and grant-giving programme, Starbucks encourages employees to be more involved in their community, by matching cash contributions in support of their local efforts. Furthermore, Starbucks leadership makes business decisions in accord with their own social values.