What a difference a year makes. In the second quarter of 2009, Starbucks was closing stores, laying off staff, and hunkering down to weather this deep and prolonged recession that has cut deeply into the latte budgets of the majority of Americans. This year Starbucks has returned as a darling of the stock market as defined by the price per share / earnings per share ratio.
Reacting to changing tastes and tighter family budgets, Starbucks made some smart changes in menu and pricing. Certainly those have made a difference in Top Line Revenue – particularly their pursuit of healthy alternatives to traditional fast food breakfast and lunch choices.
But these changes did not make the key difference. What kept Starbucks customers coming to stores — even if they ordered more plain drip coffee and fewer lattes was Starbuck’s atmosphere and ethos. At Starbucks the most important product is a great customer experience — each and every time you are in one of the stores or online at their website.
For example, a Sundays ago, I misplaced my old and battered Starbucks card — probably at the Campbell,Califoria store. A week later, as I was paying for my Sunday morning coffee (black, no room for cream), I asked the clerk if anyone had found the missing card. It was really a rhetorical question —expecting no answer — an awks sucks, gave it a try — question.
A few minutes later, the store manager came over to the table where I was sitting with a group of my friends. She brought the Starbucks Customer Service 800 # and suggested calling Customer Service right then. To make a long story short, a new card loaded with the remaining balance from my old card arrived in the mail by the following Wednesday. Like the old, the new card is now registered with Starbucks.com –
This commitment to the Customer — first and foremost — is at the heart of Starbucks enduring success. Unlike Direct TV(Customer Dissatisfaction Hurts Your Bottom Line) and T-Mobile (You Gotta Make Noise to Get Satisfaction from T Mobile), Starbucks grows its business by increasing its customers’ stickiness not with steeply discounted introductory pricing and short-term gimmicks.
As we’ve illustrated in these three blogs, its not the most expensive customer strategy that works the best, its the most consistent and the most sincere that gives a company a great reputation and an Excellent Bottom-Line!