Leading the Starbucks Way – Joseph Michelli [Book Summary]

by Nick

Joseph Michelli, Business Management Consultant, talks about Starbucks strategies that have helped it become one of the world’s most popular brands. With access to employees at all levels, from coffee makers to CEO Howard Schulz, Michelli talks about everything from everyday little things to strategic vision.

Reflections on the work of the company in India coexist with the rules for mixing tea with lemonade. Michelli talks about the methods that help the company maintain the enthusiasm of employees, about innovations in the field of electronic commerce, about the support of local communities.

He writes in unpretentious language and sometimes abuses jargon, and some of the methods described by him from the practice of Starbucks seem too common for a “better company”.

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“Love, Humanity, Modesty”

Starbucks has many loyal customers who adore this brand. Over 60 million people visit Starbucks Café weekly. The company’s Facebook page has more than 54 million followers.

When the corporation launched a dedicated website to discuss customer suggestions and wishes, Starbucks fans offered it more than 150,000 ideas.

According to the employees of the corporation, the basis of its success is not only a cup of good coffee. The main secret lies in the sincere human contact between Starbucks employees and customers.

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“We take something ordinary … and give it a new life, in the belief that what we created can change the lives of other people, because it could change ours.”

Corporate growth strategies are based on its relationships with customers, employees, suppliers, shareholders and local communities. Starbucks CEO Howard Schulz says: “If we manage to become the embodiment of love, humanity, and modesty at the world level while remaining an organization aimed at results, we will be invincible.” Starbucks customer relationship is based on five principles.

1. Savor and Cheer Up

Starbucks executives believe human relationships are at the core of a successful business. They support the desire of employees to serve customers in such a way that they feel a close relationship with the company. All aspects of the company’s work – from staff training to the design of coffee houses – are seen as an opportunity to strengthen relationships with customers.

For employees to truly love their customers, they need to be taught this. Starbucks employs enthusiasts and skillfully supports its interest in the company’s products and services. New employees study in depth the history of coffee, modern coffee production, and marketing. During the first three months of work, all newcomers participate in the Coffee Passport program, getting an idea of all the varieties of the drink offered by the company.

“Sustainability is needed … not for marketing or advertising purposes. This is a natural desire to ensure the resilience of your business in the future and to ensure the satisfaction of a new generation of customers. ”

Starbucks fosters excellence in employees by publicly acknowledging their merits. They compete for awards testifying to the high class of work, and often the employees themselves nominate their colleagues.

Each employee can earn the right to wear a black or brown apron – a symbol of the received certificate “Master of coffee” or “Ambassador of coffee”.

The corporation cultivates team spirit by observing corporate rituals whose task is to “support the pursuit of high results and respect for corporate values”. Starbucks builds customer relationships through efforts in the following areas:

  • Interior design. Starbucks coffee shops are designed for visitors, and in addition, it helps organize the workflow so that baristas can fully focus on customers.
  • Sensory factors. The atmosphere of coffee houses pleasantly affects the senses of visitors through music, paintings, coffee aromas, and food.
  • Listening skills. Managers listen to the wishes of customers and adapt to them.

“If you do not want to develop your brand in new areas, people will lose interest in it as soon as others offer them new products and new ideas.”

To captivate customers and employees with your business:

  • Tell employees in detail about the products they work with.
  • Organize a continuous training cycle that will help staff maintain a love of their work and improve their professional level.
  • Reward employees for their professionalism and quality of work.
  • Make sure that every employee of the company is able to formulate its mission. Conduct training that helps staff see the company through the eyes of the consumer.
  • Look at your premises from a customer perspective. Evaluate their comfort, impact on the senses and the effectiveness of service organization.

2. Love and Will Be Loved

Your goal is to maintain the trust of customers and employees, turning it into a love of the brand. In order to gain trust, a company needs to ensure the high quality of goods and services, fulfill its promises, act in accordance with the declared values and fairly resolve problems.

“Starbucks executives … make it clear to everyone that the only way to be loved is to love yourself.”

In order for clients to trust you, a company must first achieve the trust of its own employees. Starbucks CEO Howard Schulz calls it “investing in a store of trust.” The corporation made such contributions, providing its employees with sickness benefits and the possibility of acquiring shares.

In addition, Starbucks collaborates with local universities, so employees can receive credits in certain disciplines through training in the workplace. The company has a Caring United Partners fund (the Society for the Care of Partners), which organizes voluntary donations of employees for their colleagues who find themselves in a difficult life situation.

Special programs have been developed for the staff, for example, “immersion programs”: top managers go to coffee houses for a while to work with visitors.

“Socially responsible actions are likely to bring not only short-term sales growth, but also long-term success in the future.”

The main component of the struggle for the trust of regular customers is maintaining a consistently high level of service. Each employee must be able to quickly respond to customer complaints and show empathy.

Starbucks teaches its employees to always put the interests of customers first, to consider them more significant than the interests of the company.

Employees are provided with the necessary knowledge and freedom of action so that they can fulfill the obligations undertaken by the company. To make your brand trustworthy, the following steps are required:

  • Maintain the physical, financial, and emotional well-being of employees.
  • Create preferential programs for staff with local organizations.
  • Develop procedures that allow each employee to voice their opinions and be heard.
  • Promote the idea of guaranteeing quality service, encourage your employees to maintain high standards of service.

3. Look for a Common Language

Entering new markets, you need to find the right balance between the international standards of service that customers around the world expect from you and local cultural backgrounds. Starbucks uses its methods of establishing relationships with customers not only at home but also in other parts of the world.

The company proceeds from the belief that the basic wishes of customers are the same in all countries, and in order to satisfy the specific tastes of residents of a particular country, it establishes partnerships with local companies. Starbucks sees these as universal customer needs:

  • Attention. The employee must establish friendly contact with the client.
  • Appreciation. Employees should thank the client, invite him to come back again or otherwise express their appreciation.
  • Community support. The company promotes the well-being of local residents, in particular, encourages the participation of employees as volunteers in events held by the district or city.
  • Comfort and variety. Starbucks Cafe guarantees quality services and design; at the same time, local motifs are included in the interior.

“Modern technologies then work wonders when you see in them a way to strengthen friendships and not a way to anonymize contacts with people.”

The company does not forget about cultural differences. Its range and programs – for example, loyalty – take into account local tastes and values.

So, French customers often asked for a lighter version of espresso, and the company offered them Blonde Espresso Roast (Light Espresso). Today, this drink accounts for 25% of espresso sales in France.

In order not to make a mistake in her actions in foreign markets, Starbucks creates joint ventures with local companies that help her to take into account little-known cultural peculiarities, make an efficient and thoughtful choice of the most suitable business methods, choose the best location for a cafe and understand the intricacies of consumer behavior. To successfully enter the foreign market:

  • Determine what universal customer wishes your business can satisfy.
  • Decide which key features of your products and services should remain unchanged in each market, and decide which new products should be added to the assortment and what changes can be made to existing ones.
  • Provide attention to each customer and their appreciation for the use of your goods and services.
  • Design topics and events that bring together customers, employees, and local communities.
  • Collaborate with your local business.

4. Engage All Channels

Starbucks is a leader in e-commerce, multi-channel marketing, and social media marketing. The company uses its own website, Facebook, Twitter and paid online advertising.

Advertising displays increase brand awareness while using a website and social networks, the company communicates with consumers (never trying to sell them anything there). In its Twitter account, the company reviews service issues.

On Facebook, she presents interesting information and responds to consumer emails. In addition, commercial platforms are used. In 2011, Starbucks launched its own mobile application that allows customers to pay for purchases and track orders using a smartphone.

“Brand integrity is the result of the actions of leaders who sincerely strive to ensure that their actions meet expectations.”

The multichannel approach includes:

1) building B2B relations with other companies providing services in the field of public catering;

2) the provision of licenses to large stores, such as Safeway, to open company establishments or kiosks;

3) joint ventures, for example with PepsiCo North America, which manufactures and markets packaged coffee beverages. Starbucks also takes care of its customers at home – thanks to a partnership with Keurig, a coffee machine manufacturer, and the sale of its own brand of instant coffee VIA in supermarkets. To expand your business beyond your own retail stores, you must:

  • Identify the main points of contact with customers and figure out where else you can offer them your products and services.
  • Use Internet resources to communicate with customers, based on the principles of trust, providing the necessary information and good relationships.
  • Provide customers with various payment options, including the use of credit cards and mobile applications.
  • Add a game element to loyalty programs. For example, Starbucks, along with singer Lady Gaga, organized a two-week game, during which participants had to find in coffee houses and decode hints using mobile QR readers, as well as information on the company’s website and blogs.
  • Create a position for an employee who will ensure the presence of your company in social networks, and give him all the necessary powers.
  • Provide their services to other companies so that they distribute your products in response.
  • Motivate customers to buy new products in addition to what they already buy from you, and try to use your products in new situations.

5. Appreciate and Develop Your Heritage

Strive to constantly maintain the spirit of entrepreneurship and innovation that reigned in your company at the very beginning; by all means, avoid the “complacency and inertia generated by success.” Starbucks supports business development energy through innovation and social responsibility.

The company seeks a balanced representation in the team of “innovators” who stimulate change and “operators” who maintain a consistently high quality of work. Evaluating new ideas, Starbucks looks at how they will affect the employees and customers of the company, as well as what benefits they will bring to the business as a whole.

“If you select people with natural aptitudes for service, give them the opportunity to learn more about your products and be genuinely interested in them, demand perfection from them in the production of products and customer service, then you will do everything necessary to make your consumers love you and proud of you. ”

According to Schultz, “consumers give the brand their loyalty if they feel that the mission and aspirations of the company coincide with their own.” Starbucks is a leader in environmental projects.

An example is a project for placing cafes in old containers for transporting coffee. The company is actively involved in social programs such as Jobs for the USA, which it launched with the organization Opportunity Finance Network. To ensure the long-term development of the company, the following steps are required:

  • Analyze if your strengths, due to which you have achieved success, are not limited by your further growth.
  • Maintain a balance of “innovators” and “operators” in your team.
  • Be prepared to take great risks when launching new products and business processes.
  • Assess the potential of new ideas by asking yourself how valuable they are to your customers, your employees and the business as a whole.
  • Develop ethical standards in vendor selection.
  • Determine what social problems your company can take part in.

Conclusion

  • Starbucks employees truly love the company and its products.
  • Starbucks employs enthusiastic employees and supports their dedication through training, corporate rituals, and high-quality work rewards.
  • Having gained the trust of customers, you will take the first step towards establishing and maintaining warm human relations with them. That is how Starbucks achieved popularity.
  • Actively ask clients to share their ideas and suggestions – personally and through social networks.
  • If you are connected with trust and friendship with customers, then these feelings may well spread to your new products and establishments.
  • Entering new markets, proceed from the fact that the wishes of customers are universal.
  • Subsequently, however, you will need to change a number of characteristics of your goods, services, and design of commercial interiors, adapting them to the tastes of local residents.
  • When evaluating the potential of innovation, think about what benefits they will bring to your customers, employees and the business as a whole.
  • “Complacency and inertia generated by success” can be obstacles to long-term development.
  • The business of a humane and socially responsible company is booming.

Why You Should Read “Leading the Starbucks Way”

  • To successfully operate a small business
  • To find out how to turn a small business into a retail giant
  • To develop strategic company plans

Get Leading the Starbucks Way:

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