Starbucks : Delivering Customer Service
Starbucks: Delivering Customer Service
Starbucks: Delivering Customer Service
The elusive goal of customer satisfaction has long provided companies with endless headaches and difficult decisions. In the end, associating specific customer satisfaction metrics to company profit and loss would provide the undeniable proof needed to make changes, and then invest the required capital to address any concerns. Starbucks, not unlike the rest of the business world, has found itself in the same situation. At a basic level, the argument that more investment in customer service creates higher customer satisfaction has already been fundamentally agreed upon. However, more specifically, Starbucks must decide if a reinvestment of $40M annually in labor will translate into equivalent or greater net income over the long run. Confronted with strong evidence indicating the greater value of satisfied customers over unsatisfied customers, Starbucks must not only take into account the short term implications of such a decision, but also the long term consequences. At what point do the unsatisfied customers deteriorate brand equity and thus diminish future profitability? Finding the company at a major fork in the road, Starbucks must face a problem that eventually faces every company – invest in the future by spending now, or forego the expenditures in hopes that the negative effects will not outweigh the cost savings.
Recommendations
The goal of Starbucks is to offer excellent customer service. The company must change their current focus on growth, and enhance the customer experience that has enabled their growth to date. Implementing the increase in store hours will increase customer satisfaction by decreasing wait times. The costs involved with additional hours will be easily offset by increased customer satisfaction and more return visits per month. Additionally, the long term effects of a decrease in customer satisfaction will ultimately result in loss of
Starbucks: Delivering Customer Service
The elusive goal of customer satisfaction has long provided companies with endless headaches and difficult decisions. In the end, associating specific customer satisfaction metrics to company profit and loss would provide the undeniable proof needed to make changes, and then invest the required capital to address any concerns. Starbucks, not unlike the rest of the business world, has found itself in the same situation. At a basic level, the argument that more investment in customer service creates higher customer satisfaction has already been fundamentally agreed upon. However, more specifically, Starbucks must decide if a reinvestment of $40M annually in labor will translate into equivalent or greater net income over the long run. Confronted with strong evidence indicating the greater value of satisfied customers over unsatisfied customers, Starbucks must not only take into account the short term implications of such a decision, but also the long term consequences. At what point do the unsatisfied customers deteriorate brand equity and thus diminish future profitability? Finding the company at a major fork in the road, Starbucks must face a problem that eventually faces every company – invest in the future by spending now, or forego the expenditures in hopes that the negative effects will not outweigh the cost savings.
Recommendations
The goal of Starbucks is to offer excellent customer service. The company must change their current focus on growth, and enhance the customer experience that has enabled their growth to date. Implementing the increase in store hours will increase customer satisfaction by decreasing wait times. The costs involved with additional hours will be easily offset by increased customer satisfaction and more return visits per month. Additionally, the long term effects of a decrease in customer satisfaction will ultimately result in loss of
References: Kotler, P., & Keller, K. L. (2009). A framework for marketing management. Upper Saddle River, N.J: Pearson Prentice Hall. pg. 13, 185. Moon, Y., Quelch, J. (July 10, 2006). Starbucks: Delivering Customer Service. Harvard Business School. pg. 13