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The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary by Joseph Michelli
More than Free Refills
Starbucks Coffee, Tea and Spice opened in 1971. It was different from other coffee shops because it offered customers high-quality beans, careful preparation of drinks, nice stores and good design. Since then the company has grown to have 11000 stores in 37 countries with 35 million customers visiting Starbucks weekly. Today they buy about 4% of all the coffee sold worldwide.
Starbucks went public in 1992 and is now worth $650,000 if you invested $10,000 then. It opens a new store somewhere in the world every day of the year and has 500 stores in Japan including the busiest Starbucks in the world. In some places it has opened stores across from one another.
Starbucks has been a successful company because it focuses on its employees, products, customers’ experience and relationship with the community.
The Starbucks Experience
Starbucks has become a top global brand by adhering to five key principles. First, customize the experience for your customers. Second, focus on every aspect of the job and never lose sight of what’s important: your customer’s point of view. Third, do unexpected things to keep people coming back (surprise and delight). Fourth, learn from mistakes; don’t be afraid to make them. Fifth and finally, leave a lasting impression with your work so that people remember you long after they’ve left the store.
The Partner Ethos
Starbucks’ success is largely due to two of its corporate values:
Employees are partners, and they’re encouraged to contribute ideas for improving the company. They also help develop new products, which is a huge part of Starbucks’ success.
Starbucks executives believe in profit sharing. Employees receive company stock and medical insurance because of their belief that employees should be rewarded for the profits they help generate. The chain also gives bonuses to hourly workers who perform well above expectations.
Starbucks spends the most money on employee training and has one of the lowest turnover rates in its industry. They also have a high job satisfaction rate compared to other fast-food chains, which is likely due to their extensive worker training program.
Starbucks pays great attention to their employees and makes important changes quickly. When an employee group wanted to extend paid parental leave for adoption, it was changed within 2 weeks.
Principle One: “Make It Your Own”
Starbucks founder Howard Schultz has said that he is not in the coffee business but rather a people business. He believes it’s important to connect with customers and their communities. In order to do this, Starbucks teaches its employees five principles: 1) Be welcoming; 2) Engage in conversation; 3) Listen actively; 4) Anticipate needs; 5) Be empathetic.
“Be genuine” – Partners must be active listeners and good observers. Noticing that a new customer looked as though she was about to cry, a barista offered her a toffee nut latte. She thanked the barista for his kindness by sending him flowers.
In the business world, it’s important to be considerate of others and the environment. For example, we can reduce carbon dioxide emissions by using wind energy and planting trees in communities.
Nespresso partners are trained in coffee. They learn about tasting, handling and service through internal publications and classes. It ensures that they use the product they sell as well as motivating them to share their passion for coffee with others! Additionally, some Nespresso partners become “Coffee Masters” by enlisting in a three-month program consisting of lectures and exercises.
“Be involved.” Staff at one store realized that they had many deaf customers. To help them, the staff took lessons in American Sign Language and adjusted their work flow to accommodate those customers. Other stores have done similar things as well.
Principle Two: “Everything Matters”
Retail businesses either do well or fail because of their details. Therefore, Starbucks focuses on every detail of its business, such as image, employee concerns and product quality.
Starbucks has an in-house architecture group that designs its stores. The company uses store design to build its brand. One enthusiastic customer claims, “Starbucks could very well operate without even selling coffee. They could charge an entrance fee and offer nothing else but a room and mellow Bob Marley music softly playing in the background, and people would still come.”
Cleanliness is important for customers. Starbucks has a checklist that all stores are required to follow, and workers must come out from behind the counter at least every 10 minutes to check their work environment. One barista said she liked this requirement because it gave her the chance to interact with customers and clean up their area more often.
Starbucks customers are particularly appreciative of the clean restrooms. One customer said: “The music, drinks and wireless aren’t that important. What I really appreciate is the cleanliness and availability of their toilets.”
Starbucks is aware of the importance of packaging. In fact, it spent two years developing a sleeve for its cups out of recycled paper so that customers can carry their coffee without burning themselves. It also introduced a takeout cup made from recycled materials.
Starbucks found a way to keep coffee fresh for up to six weeks by reducing waste.
Principle Three: “Surprise and Delight”
People like surprises. The Rueckheim brothers introduced Cracker Jacks at the World’s Columbian Exposition in Chicago, and sales grew when they advertised a surprise prize inside every box. Psychologists say that people need security and safety, but unexpected things keep them from getting bored. Many companies try to avoid surprising their customers, but Starbucks uses surprises to build customer and employee loyalty.
Starbucks has given away ice cream in the past. For example, they shipped it to 6,000 locations by Federal Express to celebrate National Ice Cream Month. They also gave away books and displayed artwork at stores depending on what customers wanted.
Principle Four: “Embrace Resistance”
It’s impossible to please everyone. Starbucks addresses mistakes and problems by taking responsibility for them, preventing them from happening again, and changing when necessary. The company works closely with some of its critics to develop coffee-buying guidelines that call for good working conditions for farmers and minimize pollution because it buys so much coffee worldwide.
Store managers are the first to hear criticism, because they’re on the front lines. For example, in Beijing, China, a Starbucks store was criticized by government officials for having too many customers stand up and not enough seating. The manager changed that so people could sit down and drink their coffee rather than take it with them. In order to emphasize its community involvement, Starbucks donated $5 million to a Chinese educational fund.
Principle Five: “Leave Your Mark”
Starbucks is a company that aims to be socially responsible and community-oriented. It requires its managers to communicate well with vendors, have high standards for product providers, and to be environmentally conscious. The company’s mission statement says it will develop innovative solutions to problems, treat its employees well, and meet fiscal responsibilities.
Starbucks is a socially responsible company that uses a triple bottom line to measure its success. The senior vice president of corporate social responsibility works with the board and the Starbucks Foundation to find ways to contribute to communities where stores are located.
Starbucks also has a low turnover rate. Studies have found that companies with high levels of community involvement experience lower turnover rates. When employees work together on charitable projects, they build team spirit and deepen their connections to the community, each other and Starbucks.
