Bill Bittner

BrainTrust Query: Lessons From the Starbucks Turnaround

February 3, 2010

FROM RETAILWIRE:
Who would have wanted to be in Starbucks' shoes a year ago? McDonald's had launched low priced alternatives, the economy had stalled and consumers were balking at spending $4 per drink.... Fast forward a year later. What do you think of My Starbucks Idea?      [more...]

After reviewing their 10Q for the period ending December 31, 2009 verses 2008, it appears that most of the improvement came from cost reductions. I don't know how many customers may have suggested ways for them to save money. The largest savings appears to have come from reducing store costs. I assume this is because of the vast number of closings, not something customers would have appreciated. But since they were able to keep revenues relatively flat in light of the store reductions, maybe better customer communications had something to do with the results.

So, as with many CRM activities it is difficult to know what really motivates customers. I would imagine that some of the more loyal customers appreciated the opportunity to provide feedback. Whether that caused them to buy another cup, or drive farther to reach a less convenient location, is difficult to know. Personally, I don't think an online screen would cause me to change my habits. I attribute more to the retraining program and emphasis on new products. A smiling employee who appreciates a customer's business goes a long way.... The bigger lesson to take from Starbucks is the way they manage their employees, train them, provide employee benefits, and support them.