How to Improve the Customer Service at Starbucks - Research Proposal Example

How to Improve the Service at Starbucks Introduction The Starbucks coffee company grew from a small, regional business into the undisputed leader in the coffee industry by purchasing the best quality of coffee with facilitating an unmatched store experience. The coffee buyers of the company have maintained long-lasting relationships with the farmers and have believed that it paid the premier prices in the industry for top quality beans. With time passing by, Starbucks grew into one of the world's largest and the most recognizable brands. It has become tantamount with the highest quality coffee, inviting vicinity, personalized service and a fervor for innovation. The Starbucks continues to grow with over 13,000 locations, and customers all over the world can now benefit from the Starbucks experience (Fortune, 2007). Starbucks initiated with retail stores where customers could enjoy a relaxing atmosphere and buy the high-quality whole bean coffees which are roasted, modified beverages, food offerings, and other coffee-related products. In addition, Starbucks Entertainment introduces a diverse selection of music, film, literature and art to its customers. They have always been looking for innovative and exciting ways to expand the coffee-house experience. The fact that Starbucks workmen avail more benefits, stock options as well as promotional opportunities, not only amuses them, but it results in a positive energy which can be experienced by most of the customers who visit their stores (Francois, 2006). Even though, Starbucks' performance is terrific, there is always an opportunity to better it. However, practically talking, in the company's race to make more money, it is sacrificing its relationship with the customers, thereby, eroding its brand value. It's the relationship with the customers and not the innovation in its products, which will form or sever the company. This research paper delineates the research proposal on the way through improvising the relationship between the company and its customer, and the need for do so. 2. Need for this research There is no restaurant chain in this world which would be able to take lightly the decline in its customer traffic. However, for Starbucks, it is an indication for all chains to re-examine their positions in the market and take efficient steps towards securing their existent customer base and attract new customers. The Starbucks Company lost its customers for the first time ever in its fourth quarter, with traffic dropping down by 1 per cent through successive years, although, the store sales rose up to 4 per cent simultaneously (Cebrzynsky, 2007). There could be many reasons to this decline. Starbucks grew so rapidly that it ignored the fact that it initiated as a neighborhood coffee-house, and thus, the consumers do not possess the same emotional feeling for Starbucks which they once had. In order to find a solution for that, the company has planned to improve its services in which the field managers shall spend more time in the stores in order to ensure the quality of service, and the new stores receive additional training. The economic context in which Starbucks was forced to act was the promises to improvise services, reduce growth and expand the marketing efforts, being the typical respondents to decline in the customer traffic. The customers of Starbucks gradually realized the impact of this economic slowdown and, as a result, the Starbuck's customer depreciation has a great significance for the restaurant industry. It is crucial to know that if a hallmark as strong as Starbucks, which was once cognizant as the most inaccessible to bad economic news, can experience a decline in its customers, restaurant chains which do not share the same class are just too accessible, even if they are not in a weaker position. For the restaurant industry, there are many reasons for the lowering of consumer interest over the restaurants, chiefly including the rising gas prices, declining home values, weak dollar, tighter credit, and anticipated increment in the energy bills (Cebrzynsky, 2007). All in all, these factors could point to dark days ahead for the restaurant industry resulting in a perfect storm affecting the consumer. The result to this research is that the consumers deeply consider the way of spending their money which results in gradual creep out of restaurants from their thoughts. Majority of the customers plan to eat out less during winters and only a mere 20 per cent of them plan to order appetizers, deserts or higher-priced entrees (Cebrzynsky, 2007). As a result, it is necessary for Starbucks to pay attention to these worrisome stats and chiefly, at this point of time, should pay even more attention to its customers. Since, this restaurant chain let its attention wander, it requires to take steps in order to improvise the operations to regain the customer traffic which is lost. Moreover, Starbucks should have expected the shifting competitive battlefield in the coffee segment. During the past years, there have been emerging a number of restaurant chains who improved their coffee products and promoted them as prime products at a comparatively cheaper rate. Certainly, Starbucks noticed the growth of competition, but in context to the developments, this restaurant chain fell in to the inevitable position of enforced reaction to a downturn in the customer traffic instead of taking an action beforehand so as to prevent it. This research on Starbucks need and steps for improvisation on customer service could definitely assist in the restaurant chain's actions to some extent. It construes to the fact that Starbuck should not lose sight of its brand heritage, as it is the key to building customer relationships for the future. Customers flee when a brand forsakes the values it has achieved, as competition in every segment of food-service has been as intricate as it could be. However, there is a pressure on the consumers to cut short on their expenses on eating out and wisely choose where to spend their money. 3. Starbuck's Retail Strategy The retail strategy of Starbucks is designed chiefly to maintain the loyalty and repeat business amongst its target market which comprises of the upscale coffee consumers. This strategy encompasses hiring and training knowledgeable counter servers, such as 'Baristas' in order to edify their customers about the specialty of coffee drinks and other associated products of Starbucks, thereby, providing them with an opportunity to take a break from their busy lives in a relaxing atmosphere (Case Study). Starbucks has also introduced itself in some of the creative partnerships to put its caf' in certain stores as well as serve its coffee on United Airlines, for the reason that, licensing the brand name for food products and beverages would efficaciously increase its brand awareness. With regards to the location, individual sites are selected in the most highly visible places, where centralized cities serve as hubs or regional centers for the roll-out expansion in to the nearby markets. Starbucks' merchandise market is based on sales distribution and is composed of coffee beverages which account for around 58 per cent, whole bean coffee accounting for 17 percent, food items for 16 per cent, and coffee-associated implements accounting for 9 per cent (Case Study). Where coffee beverages are standardized across Starbucks outlets, food offerings vary from store to store. The product pricing of Starbucks is prime, since, the company commits to facilitate quality products and a high level of customer service. Personal selling as well as customer service are promoted by training new hires to deal with the product associated customer complaints on the spot without checking with a manager. Moreover, they are also trained to modify each espresso drink and explain the origin of different coffees. Nonetheless, the potential major challenges faced by the Starbucks group are the incremented competition from other retailers involving similar concepts, and their lack of experience in promoting business in a price-sensitive market (Case Study). For Starbucks, it is necessary to defend its position against these competitors for the reason of the extensive initiatives it has included in the sustenance of its brand advantage. Moreover, the only foreseeable intricacies which Starbucks may encounter would be due to the economic conditions. Starbucks never conducted its business during an expanded economic decline, and this nature of its retail strategy might prove to be too upscale for most of its loyal customers, even if the economy takes a down-turn. 4. How to Improve the Customer-Service of Starbucks There has been a great deal of conversations as well as discussions regarding Starbucks about its plans to improvise the customer experience. However, even after many strategic plans, successful and unsuccessful, the company still surrounds the question on how can it improve its customer service. Before any further strategic planning and actions to it, focus should be upon the actual needs and requirements the customers have from Starbucks. Starbucks has grown at a rapid pace and shops, now, possess more of a corporate feel. It is necessary for the company to regain the individuality as well as the uniqueness which it once possessed when in initiated in the 70s. Another fact of distress in the minds of people is that Starbucks has transformed itself into another McDonalds or Gap where customers are treated like merchandise or commodities (Sayers, 2008). In order to maintain effectual customer relationships, it is necessary for Starbucks to regain its mission statement which states that Legendary customer service is their top priority (Starbucks, 2004). It should strive to make every customer's experience pleasant and fulfilling, with respect and dignity. This construes to the need of indiscrimination amongst their customers. On the other hand, the recession in recent years of the value of Starbucks stocks, and of the brand, stems from its inefficacity to maintain a highly trained work-force through equitable financial compensation and appropriate working conditions. For example, in order to save on the labor costs, Starbucks degraded its Barista jobs to part-time in a low-wage position. All the non-salaried caf' employees were compulsory part-time workers, construing to the fact that none of them received any guaranteed number of work hours per week. Barista units at the company also receive a poverty salary, which rises at a little above the least of salaries in some of the markets. Starbuck may seek the opportunity to interact with its customers through many channels, both high-tech and high-touch, so that it may get to know the services it lags behind in, and may also call for suggestions and innovations to it. The Starbucks name and reputation is built on the foundation of trust. Many of its policies delineate the choices one can make about how they collect and use the information of their consumers. To enhance its consumer relationships, it may collect personal information, which may involve the know-how about an identifiable individual and may include his/her name, address, e-mail address, financial information, and employment related information. It may also compile aggregated data, from which the identity of an individual cannot be determined. The reason for collecting the information about the customer is that Starbucks may use this information in order to process and manage their purchase of Starbucks products and services, which include the usage of the Starbucks card (Privacy Statement, 2008). It would help them to communicate with their customers regarding the order or purchase, and the accounts or a contest entered by the customers. This communication would allow Starbucks to communicate with the customers regarding specific jobs, job opportunities, or any sort of information about employment at Starbucks, or may be an event in which any customer might have created a personal profile or submitted the resume. Moreover, this information of the customer would let Starbucks to publicize about their brand, products, events or other promotional purposes, inclusive of co-branded offers, if at all the consumer has opted to conceive such communications through the information he/she provided earlier. Also, Starbucks could communicate to the extent needed, with and maintain the relationship with the Starbucks consultants, strategic partners, agents, distributors, suppliers, contractors and other related companies which are affiliated to Starbucks so as to improvise the products and services by Starbucks, thereby, meeting the legal as well as regulatory requirement (Privacy Statement, 2008). There has been a lot of discussion about brand engagement in recent times. Many advertising agencies have come up with Engagement Planning departments, with the purpose of helping communications better connect with the consumers in multitudinous channels with 360 degree ideologies. Moreover, there have been taking place many marketing conferences regarding the brand engagement planning, however, only a few of them focus on the customer experience. Great brands like Starbucks not only need to engage, they also need to deliver (Perlmutter and Kramer, 2008). In order to become a great brand, Starbucks does not only need to get their customers hooked, but also needs to take good care of them. In order to deliver their brands, they need to work in accordance with the understanding of their customers. Where many marketers have turned out good at acquisition, they fail to work upon retention (Perlmutter and Kramer, 2008). It is quite obvious a fact, that it is way more challenging and expensive to win over new customers than to retain the existing ones. Starbucks needs to earn the trust of their customers. This can be attained by showing the customers respect while they interact with the brand, thereby, treating them in the most respectful manner. For earning trust and a loyal customer base, it all commences with a highly motivated and satisfied workforce which translates directly to the customer experience. The employees and other workmen should be incredibly attentive to the customer needs and requirements for they exceed anticipations when responding to customer inquiries. They should leverage every opportunity to surprise and delight their customers. Brand construes to the very best customer service, as such customer service is not any department, it is the entire company (Perlmutter and Kramer, 2008). The root of all understanding lies with learning how consumers make decisions when it comes to the consideration of the brand's offering. Understanding, analyzing, innovating as well as prioritizing; which contribute a thorough analysis of the customer's journey is a very helpful way of comprehending all the stages of the customer experience. Starbucks may better understand the customer experience from their perspective, as it can help them discover new and innovative opportunities for improvement. 5. Conclusions In today's market, grand customer experience, and not just grand advertising leads to strong emotional connections with brands. Customers can acquire a lot of attention by telling others about their experience with a brand. As a result, it is important that brands not only engage its customers, but also deliver them. Mere acquisition with entire focus on retention leads to uneven menace for companies. Meanwhile, the marketers who focus on improvising their customer experiences can avail advantages with the help of competitive differentiation, incremented brand loyalty, encouragement and revenue growth, for it is highly important in today's competitive world to focus on understanding the customers and improvising their experiences with the brand. Due to the successive decline in the customer-service of Starbucks with years passing by, now is the time for it to make improvements in areas which are currently having the grandest negative influence, and the areas where there is the greatest opportunity. Where, in some cases, small transformations can have a large influence, in other times, large-scale changes are worth the investment ((Perlmutter and Kramer, 2008). The most significant criteria in prioritizing the opportunities developed by Starbucks are whether or not the improvisations will add to the value for its business. Elected opportunities need to put a stoppage to the erosion of current customers and perform in a much better way so as to attract new ones. Improvised customer satisfaction by itself is mot a wise and strong enough reason. Moreover, it is necessary for Starbucks to trigger an increment in buying though the eradication of resistances, strong enough loyalty, and encouragement. It is significant that such an analysis is compared to the customer desires at each step of the customer journey. They should scrutinize the needs of customers at each stage, for if they become disloyal after making a purchase, it could be because of the product's performance or the technical support personnel, the account representative, or may be some other functional or emotional constraint which the company has never thought about before. The objective is to improvise customer's attraction and retention by removing the resistances which cause the customers to quit one brand and head elsewhere. This strategy could enhance the experience so that it will result in more loyalty and advocacy. Within this analysis, Starbucks should focus upon uncovering the answer to the actions it should continue upon, and the innovations to it. Technically talking, by reducing the number of openings, Starbuck may optimize its resources and potentially reduce cannibalization of its existent stores. Based on the company's orientation, with the help of this fall, Starbuck's store count would considerably increase. Their actions with which they will get back on track in redefining the customer experience and expanding the differentiation in the market between them and the others in the coffee business is legitimate. Starbucks' customers need to see it as prosperous in rediscovering itself through customer experience. In this way, it could set new standards and grades for other companies who know the fact of being more customer-oriented. It would make the existent customers glad and happy and would help them insulate from the prevailing competition, as they are charging rapidly. References 1. Case Study. CASE 35: Starbucks Coffee Company. [Online] December 16, 2008 . 2. Cebrzynsky, Gregg. 2007, Starbucks' customer drop-off is a warning to other chains to anticipate bad news. Nation's Restaurant News (Dec 10, 2007). 3. Fortune. 2007, Starbucks Coffee Company: 100 Best Companies to Work For. [Official Website] Starbucks Coffee Company. 4. Francois. 2006, Why is customer service at Starbucks consistently great - while the service at most other take-out joints sucks'. Worst Practises (June 12th, 2006). 5. Perlmutter, Kevin and Kramer, Michelle. 2008. Creating and managing brand value. Paper, Interbrand. 6. Privacy Statement. 2008, Starbucks Coffee. Starbucks Corporation. 7. Sayers, Shaun. 2008, How Starbucks could really improve, 08 May 2008. [Online] December 16, 2008 < http://blog.capablepeople.co.uk/blog/_archives/2008/5/8/3680637.html>. 8. Starbucks. 2004, Starbucks Standards of Business Conduct. Asia Pacific Support Center v.1.1E. Read More