Starbucks: Delivering Customer Satisfaction: An Outline
1. What factors accounted for the extraordinary success of Starbucks in the early 1990’s. What was so compelling about the Starbucks’ value proposition? What brand image did Starbucks develop during this period?
Factors:
• Environment/atmosphere
• Quality of the product
• Customer Service
• Employee satisfaction
• Specific demographic targeting
• An almost untapped market
Value Proposition:
• The customer (and customer service) above all else.
• Coffee drinking as an experience
• ‘Coffee culture’
• Emotional benefits of drinking coffee
Brand Image:
• Customer-centric
2. Why have Starbucks customer satisfaction scores declined? Has the company’s service declined, or is it simply measuring satisfaction the wrong way?
Why?
• Customers are evolving and expecting more
• Declining level of service
• Change in atmosphere
• Increase in competition
Measuring satisfaction the wrong way?
• Subjective way of obtaining results o Leaves many questions
3. How does the Starbucks of 2002 differ from the Starbucks of 1992?
• Growth from 140 stores to 4000 stores
• Change in atmosphere. Less intimate.
• Customers viewed Starbucks much differently in 2002 (seeing Starbucks as more corporate).
• More sales complexity/diversity in 2002
• Different demographic profile o In 2002, the average customer was younger, less affluent and less educated
4. Describe the ideal Starbucks customer from a profitability standpoint. What should it take to ensure that this customer is highly satisfied? How valuable is a highly satisfied customer to Starbucks?
Ideal:
• Loyal, repeat customer who is highly satisfied
• Visits 18 times per month
What should it take:
• Follow through on its value proposition
• Better service
• Increase/emphasis on factors listed above in Q1
How valuable (Ideal):
• $4.42 on average per visit
• Average customer life 8.3 years
• $954 per year
• $7924 over average customer life
How
Factors:
• Environment/atmosphere
• Quality of the product
• Customer Service
• Employee satisfaction
• Specific demographic targeting
• An almost untapped market
Value Proposition:
• The customer (and customer service) above all else.
• Coffee drinking as an experience
• ‘Coffee culture’
• Emotional benefits of drinking coffee
Brand Image:
• Customer-centric
2. Why have Starbucks customer satisfaction scores declined? Has the company’s service declined, or is it simply measuring satisfaction the wrong way?
Why?
• Customers are evolving and expecting more
• Declining level of service
• Change in atmosphere
• Increase in competition
Measuring satisfaction the wrong way?
• Subjective way of obtaining results o Leaves many questions
3. How does the Starbucks of 2002 differ from the Starbucks of 1992?
• Growth from 140 stores to 4000 stores
• Change in atmosphere. Less intimate.
• Customers viewed Starbucks much differently in 2002 (seeing Starbucks as more corporate).
• More sales complexity/diversity in 2002
• Different demographic profile o In 2002, the average customer was younger, less affluent and less educated
4. Describe the ideal Starbucks customer from a profitability standpoint. What should it take to ensure that this customer is highly satisfied? How valuable is a highly satisfied customer to Starbucks?
Ideal:
• Loyal, repeat customer who is highly satisfied
• Visits 18 times per month
What should it take:
• Follow through on its value proposition
• Better service
• Increase/emphasis on factors listed above in Q1
How valuable (Ideal):
• $4.42 on average per visit
• Average customer life 8.3 years
• $954 per year
• $7924 over average customer life
How