On Starbucks, CRM, Coffee Shops and Customer Service
Posted by TheShot on 03 Aug 2006 | Tagged as: Consumer Trends, Starbucks
First CoffeeSM is a blog that generally focuses on issues related to CRM, or Customer Relationship Management — and generally not on anything having to do with coffee (go figure). Except today, where David Sims commented on how Starbucks‘ worldwide geographic sprawl has set new standards of customer service for coffeehouses everywhere: On Starbucks, CRM, Coffee Shops and Customer Service, Part I.
Mr. Sims writes that there is a lot of whining from mom & pop coffeehouses — making out Starbucks as the big, bad monster that moves into town and dares to offer coffee consumers better customer service. He notes that Starbucks has thrived in places that long needed a lifting of the local standards, that many mom & pop coffeeshops learned to improve with competition, and that there are places with good quality coffeeshops to begin with (such as New Zealand) where Starbucks has become superfluous.
I’ll agree with him that the world is littered with independent coffeehouse deadwood that could use a good, controlled burn. But I’ll argue that customer service is just gravy in the larger scheme of things. I’ve had some of the worst customer service in the world (at least at first) at Sant’Eustachio il caffè in Rome, and yet it’s one of my favorite cafés the world over. Instead, I’d argue that the quality of the coffee and the welcoming nature of the location itself are the biggest drivers for making people pass over their local mom & pops.
In the Days Before Coffee Perestroika
One of Starbucks greatest gifts to humanity was in raising a general awareness that coffee could be a luxury item, something to be enjoyed for its own sake — and not just a commodity to be endured for its desirable psychochemical effects. Granted, Starbucks could only push the quality formula so far before expansion and the corresponding dilution of quality capped them off. But standards were so low in some places for so long, Starbucks can be viewed as the nectar of the gods. (I’ve always likened Starbucks as the Mikhail Gorbachev of quality coffee’s Perestroika period: instrumental to the revolution, but irrelevant once unable to keep up with the pace of what they put into motion.)
Another standard Starbucks helped establish was that a coffeehouse doesn’t have to be a dirty, decrepit hovel with abused and mismatched furniture, gritty floors, and bathrooms that make highway rest stops seem good enough for surgery. In my own observations, this factor alone seems to particularly resonate with a number of women I know. Could you imagine a self-respecting tea parlor with the standards of many independent coffeehouses? A lot of women just don’t want to scrub themselves down with anti-bacterial wipes before entering and after leaving.
As for customer service, long lines are always a turn-off. Particularly for the set that prefers to have scalding-hot coffee poured directly into their bare hands (skipping the paper cup) to run out the door with … for nursing throughout the day. But if the quality is there, people are always willing to wait in line. (Ever notice the lines outside Tartine Bakery & Café? Or more to the point: the lines outside House of Nanking compared to the empty Chinese restaurants next door to it?)
He’s got the right argument — just the wrong reasoning. But what’s a guy running a CRM blog supposed to say?
6 Comments »
on 03 Aug 2006 at 11:02 pm PT 1.Clubbeaux said …
Hi Greg,
Excellent review of my article, the points and critiques you raise are spot on. Brief note of explanation: the name comes from the fact that I’m based in Istanbul, seven hours ahead of the East Coast, so I can get up and do a column that appears before 6:00 a.m., so you can read it with you first coffee in the morning. Of course I’m usually on my third by then…
The point you raise questioning how important customer service really is does have merit, the Part II of my column, coming today, is going to argue that a lot of people (he said from experience) prefer rather anonymous service, and are uncomfortable with “Hi Frank!” every time they walk in the door.
Not exactly Soup Nazi service, but more, ah, coolly professional. Smile, hand the coffee over and shut up. My wife and I ran a coffee shop in Antalya, on Turkey’s Mediterranean coast, for a couple years before moving up here in January, and we learned which regulars wanted to sit at the bar and chat and which preferred simply to be left alone. I believe that this is providing the finest customer service these people want — sometimes less is more.
For people like yourself, who obviously have the taste bud capacity where subtle grades of differentiation in the cup itself matter, customer service isn’t such a big deal, as you correctly point out, if balanced out by superior java, but the majority of people can’t tell the difference between Kenyan AA and Sumatran and go to coffee shops for the overall experience; to them the service, the atmosphere, heck even the music is very important.
I like your analogy of Starbucks and perestroika, what’d be interesting is to research out just what happened in New Zealand, I think. My wife’s a Kiwi, she said they were used to just drinking Nescafe until about 1990, when she left for Turkey. She came back around ‘93 and found you couldn’t just walk into a coffee shop and order either a cup of coffee or cappuccino anymore, which were your two options the way “white” or “red” are your two wine options in even fine Istanbul restaurants today, you had all these flat blacks and long whites and whole chalkboards of names she’d never seen.
We were there over December/January, I’ve never seen a place with such consistently high quality of coffee shops anywhere. Never seen a place with such consistently beautiful scenery anywhere else either. But it’d be interesting to know what happened in New Zealand in the early ’90s to so rapidly raise the country’s coffee awareness so high, it wasn’t Starbucks like it was everywhere else. Any historical insight?
And I might steal your description of what a coffee shop doesn’t have to be in today’s piece. It bothers me when people try to pass of “slovenly” for “comfortable” and “cheap” for “authentic.”
Keep up the good work,
David Sims
on 10 Dec 2006 at 6:20 pm PT 2.Espresso News and Reviews - TheShot.coffeeratings.com » Coffee: Drink or lifestyle? How about both? said …
[...] But when you check all the references, you quickly come to the realization that much of the cult of Starbucks and its ‘Buckniks has little to do with their coffee. More often, it’s about brand coziness with a clean, approachable, predictable, and convenient location and their variety of high-calorie milkshakes (with coffee added for flavoring). When you come down to it, the great irony is that a lot of people really don’t like the taste of coffee. Yet Starbucks thrives under a coffee identity by making the otherwise unpallatable pallatable for millions of consumers. [...]
on 06 Mar 2007 at 2:47 pm PT 3.Espresso News and Reviews - TheShot.coffeeratings.com » All the King’s Horses, and All the King’s Marketing Consultants… said …
[...] The genie is already out of the bottle, folks. Starbucks “going back” is akin to asking Gorbachev to rollback Perestroika (Gorbachev being my favorite Starbucks analogy) because too many of Putin’s critics are ending up dead and glowing. Today Starbucks has some 140,000 employees. Can you imagine the complete chaos, and expense, if even just 30,000 of their low-wage, push-button employees were suddenly asked to operate sophisticated machinery? May as well give every bicycle commuter in Ho Chi Minh City a Volvo and tell them to drive to work tomorrow. [...]
on 18 Jul 2007 at 7:14 pm PT 4.Espresso News and Reviews - TheShot.coffeeratings.com » Toronto's love affair with espresso bars heats up said …
[...] I don’t need to feel special.I just want good [...]
on 12 Jan 2008 at 11:05 am PT 5.bridget killen said …
looking to sell starbucks coffee in my resturant…. is this possible?
on 13 Jan 2008 at 2:36 pm PT 6.TheShot said …
They do it all over Carmel-by-the-Sea, for example, where the Starbucks chain itself isn’t allowed:
http://theshot.coffeeratings.com/2007/02/carmel-espresso/
So I can’t see why not. Particularly since you can always buy the stuff retail (though I’m not sure why you would want to — you’d be far better off with a local roaster).