Starbucks Experience and the New Economy


We all heard the hype generated by Starbuck's 3.5 hour shut-down on Wednesday. I'm sure now, many of us are wondering if steps the company is taking will restore and renew the "coffee experience" to save more than 100 poorly performing stores in their 7100 store chain.

If you didn't hear about this, you can read all about this here.

I tip my hat to CEO, Howard Shultz for making time to properly rally the troops and train people to bolster the Starbuck's experience. It was an interesting decision to conduct this training during normal business hours, when it could have easily been done before or after hours: Using the shut-down during normal business hours is a highly promotable move -- and it does underscore to the public the company's heartfelt desire to better the quality of the product.

What I want to know is whether retraining baristas to create a better latte is going to cure the ills the company faces?

As the leader in the coffee experience, Starbucks set the bar high, and has succeeded through innovation for years. However, what we know in Customer Experience Management is that those who set the bar don't always have an easy time of things: The standard they set soon becomes the norm. As such, the experience leader must consistently raise the standard to create better experience and retain a loyal and enthusiastic customer base. Meanwhile, the competitors forego some of the experimentation and investment raising the bar requires, and merely copy the leader...and so it goes...

Raising the quality bar is a great move... but is it enough?

I can't help but wonder, how Starbucks can raise the bar in an increasingly sagging economy?

The link I posted above serves as an excellent reinforcement for this point. Check out the "Related" vignette on the left-side of the body copy in the article: It is called "Eye on the Economy".

I don't want to get all "doomsday" here.... but the truth is this: In yesterday's economy, I didn't think much about my daily $4 cup of coffee (or two of them and a snack!). In today's and tomorrow's - I will probably be more careful with my dollars - and so will many other people! If every loyal customer cut back to one latte per week what would happen to revenues?

It will be really interesting to watch and see what happens as Starbucks adjusts to these market conditions.

1 comments:

Eric Karjaluoto said...

Hi Leigh,

Good post. It's interesting, we were chatting about just this situation last summer on ideasonideas.

http://www.ideasonideas.com/2007/07/starbucks-growth-paradox/

Cheers!

Eric

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LEIGH DURST

LEIGH DURST
I’m Leigh Durst, a 20 year veteran in business, operations, customer strategy, ecommerce, digital & social media and marketing. Simply put, I’m a strategist that helps companies (start-up to blue chip) achieve business shift, create more compelling online and offline experiences. I also write, speak and teach about experience design and next-generation business. I’m a futurist, visionary, strategist, doer and connector with a passion for people and helping others. When I’m not on the road, you’ll find me in the San Francisco bay area, working, beaching it and hanging out with my family and dog.

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