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My Starbucks Ideas Boost Customer Loyalty, Profits, and Employee Engagement That U.S. Restaurant Chains Can't Afford to Ignore (SBUX)

By June 30, 2012

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In my e-mail yesterday was a message from Starbucks (SBUX) about the newest ideas that have been implemented in Starbucks stores as a result of its My Starbucks Idea website. Starbucks wasn't promoting anything, trying to sell me anything, or trying to persuade me to take any kind of action. They just wanted me to know that they care what their customers and partners (employees) think, and as proof of that care, they take action on the feedback they receive.

Message received. Loyalty reinforced.

The My Starbucks Idea system is a formidable best practice that creates customer loyalty, employee engagement, and profits that the U.S. restaurant industry can't really afford to ignore.

The ideas that are being implemented because of the My Starbucks Idea system are neither small nor insignificant. It probably took Starbucks user AB523 about 10 minutes to type out a very detailed and thoughtful suggestion about how to accept mobile payments at the Starbucks drive-thru windows. But for Starbucks to implement that idea effectively, it took a significant investment of time, talent, and capital.

Sourcing the technology, installing the hardware, and deploying the training necessary for a drive-thru mobile payments solution that is both customer friendly and operationally sound is no small task. First and foremost it took a commitment by Starbucks leadership to care about improving the Starbucks customer experience.

At this point in the evolution and adoption rate of mobile payments, it's a nice-but-not-necessary option for Starbucks drive-thru customers. But founder Howard Schultz and the current Starbucks leadership team know that building a world class brand is not just about eliminating the negative aspects of the customer experience, it is also about proactively making improvements in order to create the feeling that "things just keep getting better and better" at Starbucks.

Truth be told, the idea of accepting mobile payments at the drive-thru had probably been discussed by more than one Starbucks executive prior to the posting by AB523 on the My Starbucks Idea website. But providing the forum for ideas to organically emerge from the customer community helps the Starbucks leadership team to get a genuine read on the urgency and priority for improvement projects. When the Starbucks customer community makes it clear that something is important, then the Starbucks management team clearly knows what should be important to them as well. Nothing is more annoying to customers than to see a bunch of changes being implemented that nobody cares about while the "important" things are left unchanged.

Ask customers what they want and then find a way to give it to them. It seems like such an obvious retailing formula, it's difficult to understand why every retail company in the world is not more aggressively focused on doing it. Who would have better ideas and suggestions than the consumers of your products and services anyway?

That question is not completely rhetorical. The people who might have even better ideas for your business than your customers is your employees. When I observed a fast food manager barely listen and then do nothing with a customer's suggestion (Customer Satisfaction Ratings May 20, 2012), it was a strong indication that there was either no formal system available to employees for communicating suggestions, or if an idea processing system did exist, there was little motivation for employees to use it.

The partner suggestions that have been implemented through the My Starbucks idea system, seem to be not nearly as complex to implement as most of the customer ideas have been. Requesting smaller steaming pitchers, hand lotion, and pocket-sized training cards are not big-deal employee suggestions. And that's exactly why Starbucks should (and did) implement them - because they are no big deal, but they help eliminate employee hassles.

What is big about collecting and responding to employee suggestions is the care, respect and appreciation that it demonstrates. Engaging the minds of your employee team in making your business better creates a level of employee ownership that has value beyond any number that could be included on any balance sheet.

"Ownership" is another concept that seems nice, but is often difficult for retail leaders to fully imagine. Here is one great example of ownership that I observed just yesterday.

Sitting in the lobby of a privately-owned boutique hotel, I observed the owner interacting with the guests as they were checking out. With each departing guest Tony went through the necessary check-out procedure and before sending his guests on their way he asked one additional nice-but-not-necessary question... "Where are you headed today?"

In each case when that question was asked, a friendly exchange followed, during which Tony had the opportunity to offer a suggestion, a brochure, an added piece of advice, or a solicited opinion about whether a certain destination was "worth it." In each case when that extra few minutes of conversation was concluded, the guests walked away with smiles and obvious feelings of appreciation. It was a brilliantly simple way to make a positive last impression.

I shared how impressed I was with what I had observed with Tony, and his response demonstrated his clear and conscious commitment to creating an excellent customer experience. He told me that he saw his role not as providing lodging facilities, but rather as contributing positively to the traveling experience of the person in front of him. Specifically his goal is to "make a substantial contribution" to the quality of each person's trip and when he had made every effort to do that, it was a successful transaction.

Tony and his wife built the hotel from the ground up, so obviously his ownership stake is inherently high. But as Starbucks has demonstrated, a "partner" that is truly treated like a partner can have a sense of ownership that is just as high.

Leaders create the engagement, employees with ownership create engaging customer experiences, loyal customers create profits. Sometimes retail success is much simpler than we allow it to be.

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Comments

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(1) Joseph Michelli says:

This was a simply brilliant post. I am the author of a 2006 book entitled The Starbucks Experience and am working on a new book about the company to be released in 2013. I would love to talk to you about using a portion of this blog in the book. Again thank you for your brilliant analysis.

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I find it most distressing when I go into a Starbucks to have a cup of coffee with my friends and we find there is no place to sit because there is an abundance of people sitting at tables with their computer! I am wondering just why Starbucks can’t designate certain tables for computer use, thus leaving space for those of us who choose to do our computer work at home. Why do the computer users feel they have to have an individual table for their computer work? They don’t talk so why can’t they share tables with each other? This lack of space does not keep me from purchasing your wonderful coffee, but it does keep me from enjoying my coffee with my friends at your various establishments. I very much doubt that by designating certain areas for computer use, Starbucks would suffer a lack of customers. In fact, you might find that you have more and happier people in your establishments.

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