Tag Archives: Starbucks

Live from #TMRE14: Disrupt Habit

Award-winning New York Times reporter Charles Duhigg took us at TMRE 2014 today to the edge of scientific discoveries that explain why habits exist & how they can be changed.

About 45% of what we do daily is habit, according to a study done. Your brain almost goes to sleep when going through pattern behavior.

The Habit Loop:
Cue
Routine
Reward

Some habits seem to matter more than others – keystone habits.

These keystone habits actually affect other behaviors, people who work out regularly, influences people to eat healthier the day they exercise, procrastinate less, and use their credit card less.

P&G created a Febreeze Habit Loop by adding a pleasing scent to reward cleaners and integrate a sensory pleasure into the habit of cleaning up. Sales explode!

Lesson: Make sure the reward is actually rewarding, deeply and meaningfully to the person rather than abstractly.

Lesson: The most powerful rewards contain emotions.

The Latte Method involves:

‘We Listen to the customer, Acknowledge their complaint, Take action by solving the problem, Thank them, and then Explain why the problem occurred.” – Starbucks’ Employee Training System

How to seize and/or disrupt habit:

  • Know your keystone habits
  • Build in rewards with emotions

ABOUT THE AUTHOR

 

Valerie RussoFormerly a senior copy editor at Thomson Reuters, a research editor at AOL,  and a senior web publicist at Hachette Book GroupValerie M. Russo is editor at large of The Front End of Innovation BlogThe Market Research Event BlogThe World Future Trends Tumblr, the Digital Impact Blog, and also blogs at Literanista.net. She is the innovation lead and senior social media strategist for the Marketing and Business Strategy Division of the Institute for International Research, an Informa LLC., and her poetry was published in Regrets Only on sale at the MOMA Gift Shop. Her background is in Anthropology and English Literature. You can reach her at vrusso@iirusa.com or @Literanista.

8 Stats Proving the Importance of Customer Experience

Is customer experience really that important? Well, the recent Fortune list of the world’s 10 most admired companies in 2013 includes seven that are renowned for excellence in that area: Apple, Google, Amazon, Starbucks, Southwest, Disney and FedEx. Here is some recent research by Business2community.comthat proves customer experience should be a top priority for companies today.
  • Dell has published internal metrics showing that 97 percent of dissatisfied customers can be rescued with proactive intervention and more than 40 percent of those people become raving fans.
  • Siegel+Gale’s 3rd annual Global Brand Simplicity Index reported last year that nearly one third of American consumers would be willing to pay an average of four percent more for simpler brand experiences.
  • Gartner estimated last year that by 2014 ‘failure to respond via social channels can lead to up to a 15 percent increase in churn rate for existing customers.’  
  • Research by Temkin Group last year reported that only seven percent of the 255 large companies it surveyed could be described as reaching the highest level of customer experience maturity, although 60 percent said their goal is to be the industry leader in customer experience within three years.
  • A July, 2013 Lloyd’s survey of 588 C-suite executives found that customer loss was their second biggest concern, exceeded only by worries about high tax rates. Respondents also indicated they are under-prepared to address this risk, with executives giving themselves only a 5.7 rating on a 1-to-10 scale. 
  • Sixty-two percent of B2B and 42 percent of B2C customers purchased more after a good experience, while 66 percent and 52 percent, stopped making purchases after a bad experience, according to a survey of 1,000 people who had had recent customer service interactions.
  • An Oracle survey of 1,342 senior-level executives from 18 countries earlier this year found that 97 percent agree that delivering a great customer experience is critical to business results, and that the average potential revenue loss from failing in this area is 20 percent of annual revenue. However, 37 percent are just getting started with a formal customer experience initiative, and only 20 percent consider the state of their customer experience initiative to be advanced.
  • A survey of 2,000 adults last year found that 83 percent are willing to spend more on a product if they feel a personal connection to the company. One-fifth said they would spend 50 percent more on companies that they felt the company put the customer first.

Amanda Ciccatelli, Social Media Strategist at IIR USA, has a background in digital and print journalism, covering a variety of topics in business strategy, marketing, and technology. She previously worked at Technology Marketing Corporation as a Web Editor where she covered breaking news and feature stories in the tech industry.  She can be reached at aciccatelli@iirusa.com. Follow her at @AmandaCicc. 

Starbucks’ New Brew: Faster Digital Customer Experience

Today, Starbucks Coffee Company has become almost as well known for its free WiFi as its coffee. The $13.3 billion company provides a model of combining a physical retail operation with digital channels. It has more than 34 million Facebook likes and more than 3.6 million Twitter followers, and is successful at using social media and mobile technology to create unforgettable customer experiences. 
In fact, recently Google and Level 3 Communications have partnered up to provide wireless service at Starbucks U.S. locations. The new Google WiFi will initially be seen at new locations over the next month and then be rolled out to its remaining 7,000 locations across the country over the next 18 months. According to Level 3 CEO Jeffrey Storey, the company is working with Google to provide Starbucks with a differentiated experience for customers.
‘We will do the things that we do best ‘ building and managing complex network services to support that infrastructure. And, Google will do the things that they do best and make sure that they provide a differentiated WiFi experience that they will at some point, use that portal and that interface to, for example, offer seasonal drink coupons to the customers as they walk in,’ he told Diginomica.com.
Starbucks Chief Digital Officer Adam Brotman said it’s the next step in the relationship between the coffee giant and Google. Currently, Brotman is responsible for delivering wider digital thinking at Starbucks, which is key to its customer experience (CX) strategy.
‘From the digital perspective, we spent the past several years building an engine of digital touch points with our customers that not only allows us a deeper relationship with our customers, but also pays off with incrementality for our business,’ he commented.
A critical tool for Starbucks is its loyalty card program which has seen a 100 percent year-over-year growth in dollars loaded via Starbucks mobile apps and Web properties.  Over 10 percent of all transactions in U.S. stores are made via mobile phone, according to Brotman. So, mobile devices have become important part of the CX as the fastest and easiest way to pay in stores and will continue to bring more innovation into the space.
‘One of the things that’s allowed us to get a lead in mobile payments is that we did not try to go for example, right to the cloud or right to some sort of tap to pay, although we do plan in the future on implementing whatever is suited and most convenient to our customers,’ he added.
Additionally, Starbucks recently passed almost four million Twitter follower mark, and while its global Facebook following allows the firm to engage with our customer’s every day, ‘Our internal measures tell us that these digital initiatives have added demonstrable impact to our US business with the promise of even greater growth in the months and years to come. We are not resting on any of our previous successes,’ said Brotman.
To date, Starbucks has a robust pipeline of developments in each area of its digital ecosystem and it expects to deliver a number of improvements and innovations through its existing programs and introduce new concepts. For instance, one new initiative is a partnership with Duracell to trial wireless charging for our customer’s mobile devices in select Starbucks stores in Silicon Valley. The installation of multiple wireless charging Powermat services in our stores will allow Starbucks customers to easily recharge their smartphones.
Brotman said, ‘This is a kind of improvement to the digital experience that our customers expect from Starbucks and the kind that we will deliver at scale moving forward.’
Furthermore, Brotman said work is underway to accelerate the digital strategy globally. China, for example, already has 2.5 million My Starbucks Rewards members without a mobile payment platform or eGifting in place. The company has even made mobile payment available to apps on Android and iOS to Starbucks customers in the Hong Kong market.
‘I truly believe that no other retailer is as far along as Starbucks in terms of building an end to end digital customer experience across a variety of digital touch points both in-store and out of store, across channels, and now across geographies,’ Brotman said. ‘We are truly only just getting started.’

Amanda Ciccatelli, Social Media Strategist at IIR USA, has a background in digital and print journalism, covering a variety of topics in business strategy, marketing, and technology. She previously worked at Technology Marketing Corporation as a Web Editor where she covered breaking news and feature stories in the tech industry.  She can be reached at aciccatelli@iirusa.com. Follow her at @AmanadCicc

Combining Digital Data with Traditional CRM to Enhance Customer Experience

Putting the customer at the heart of your business strategy has been the key to success. It seems obvious, however, data & CRM specialists agree it is still an aspiration for many. CRM systems that combined digital, mobile and social data alongside traditional touch-points are outstripping those that don’t.  In fact, brands like Domino’s Pizza and Starbucks have cracked the customer service game thanks to their combined approach.
‘The art of CRM doesn’t change, but the channel has. It’s all about talking to customer in relevant way, at the right time, on the right channel and adding value to the customer’s life. Combining the digital alongside offline data has enabled companies such as Pizza Hut and Domino’s, to identify individuals rather than just households,’ said Celerity’s Managing Director Jason Lark.
According to Econsultancy.com, the benefits of joining up digital, mobile, social and offline CRM data include:
No Duplication
Businesses that have integrated all touch points into a single view CRM system are outperforming those that aren’t because they don’t duplicate messages.
1-2-1 Conversations
Data drawn from Facebook, email and other social media channels means large multinationals have an opportunity to have a 1-2-1 conversation with customers.
Real-time Relevance
Using mobile as a channel to collect and harness data has allowed companies to create targeted, personalized offerings.
Agile Customer Service
Companies that have embraced social media, now respond to conversations with customers instantly, demonstrating agile customer service.
Personalization
By tracking offline and online activity organizations can personalize content to reward to the customer.
Tracking Former Customers  
Data created from the digital wallet allows you to track the consumer once they’ve left your site. 

The Importance of Market Research for a Successful Startup

Some say that successful entrepreneurs are born, not made.
Others disagree, saying entrepreneurship is a talent that can be learned. The
truth of the matter probably lies somewhere between the two. The desire to
create and grow a business, no matter the size, requires a combination of character,
talent, vision, timing, and market research.
As an entrepreneur, the market for your product is the pool
of consumers or businesses that have a need that your startup business may help
them address.  So, you need to define
your market before conducting research. Once you define the scope of your
potential business and the potential market for your product, you can then find
out why a consumer or business would purchase from you rather than a
competitor. Before investing in starting your business you need to find your
niche and determine your clients’ willingness to pay for your product ‘ which is
where market research comes in.
In order to gather this information, entrepreneurs use resources
to conduct market research including the chamber of commerce, the U.S. Census
Bureau, and the SBA, provide valuable information to business owners.  For instance, Shawn O’Connor, founder and CEO
of Stratus Prep, recently told
Forbes
about a tool made available by the SBA called SizeUp. It allows you
to put your business’s industry and city and it maps out your competition,
highlighting areas with a lot of competitors in orange and areas with potential
customers but few competitors in green.
In addition, be sure to conduct your own research to get
information specific to your business and the consumers you hope to attract. A
few research tools to consider include interviews, surveys, and focus groups,
which can identify information about the importance of price and features as
well as the strengths and weaknesses of competitors.  In fact, before starting Stratus Prep, O’Connor
held focus groups to determine the market size and willingness to pay for his
offering. This process also helped him identify which features were most important
to potential customer. Then, he compared the consumer information to cost
structure to ensure that after expenses; the business would be profitable based
on the price consumers were willing to pay.
According to O’Connor, it is important to be open-minded when
conducting market analysis as the feedback you hear may not be what you were
expecting. ‘You may feel attached to your business idea and wish to change
nothing about it, but after conducting a survey you may find that customers are
looking for different service or additional features. So, don’t scrap your
idea, but consider adjustments to accommodate your customers’ demands,’ he
explained.
An example of a company that performed this market analysis
is JetBlue, which prior to launching, determined that airline passengers cared
more about comfortable leather seating and TV entertainment than the other
‘amenities’ offered by legacy carriers. JetBlue invested in upgraded seating and
TVs and emphasized a relaxing journey at a modest price. Turns out, the
strategy was so successful that other airlines followed suit and numerous
imitators emerged.
Additionally, Starbucks identified and catered to unmet
consumer needs, which turned an everyday beverage into an experience. While Starbucks
is known for its coffee, it is also renowned for its atmosphere, where
professionals, college students and anyone who wants to kick back can set up
shop with free WiFi and a comfortable workspace. ‘The modifications made to the
industry standard drew an enormous and loyal following, which is why there is a
Starbucks on every corner,’ commented O’Connor.
By doing your market research homework before starting your
business, you will make company a powerful force in this competitive business world! 

Could segmentation lead to stereotyping?

Caleb Hannan of Seattle Weekly recently wrote a piece that questioned whether or not Starbucks was write in sponsoring Nascar. Was Nascar the right choice for them? Did Nascar fans drink coffee? Read the article here.

He does bring up an interesting point. Does your company seek out customers in places that might not be typical? While we see certain customers frequenting Starbucks and other frequenting races on the weekend, could there be an unexplored market you haven’t yet tapped yet? What are other examples of companies reaching out to markets that aren’t typically suited for them, but have found success.

As the article points out, racing fans are some of the most loyal customers in the industry. What does Starbucks have to loose from reaching out and investigating a new market? They’re both potentially letting new customers know about their brand and showing returning customers that they’re a diverse brand.

Twitter and its Multiple Usages

It seems as if the media has really taken Twitter under the spotlight the past couple of months. This article in the NY Times highlights how companies like Starbucks, Whole Foods, and Dell have used Twitter as a researching tool in order to find out what customers are thinking as they use one of their products. Amazon.com recently found out how important Twitter is when many consumers responded negatively on Twitter when certain books were reclassified as “adult” and so were removed from search rankings. The company felt it was necessary to respond to these tweets even over the Easter holiday.

Twitter’s usage does not stop at the consumer level though. Last week in Moldova, several protesters used Twitter as a means to rally up troops and to help them understand what was happening in their small country. Twitter has definitely created an enormous impact across the globe, but what are some other examples of its usage that you have come across?

Facebook as a research community

Social Media Today’s blogger Matt Rhodes recently pointed out something very significant. Facebook is not a great tool for market research. Yes, it’s a community where individuals come together and discuss certain topics (as the article points out, there are 34 groups in London alone that are based around Starbucks), but you can’t get the most out of the research experience. There’s a certain amount of research and insight you can’t attain on Facebook because you’re not in control of the conversation.

Do you agree with Matt? Have you found great ways to use Facebook to collect research for your company? What do you think?

Customer service winners

I recently came across BusinessWeek’s Customer Service Standouts slideshow. I took some time to look through the top ten to find out what made them so special when it came to their customer service. An overlying theme was treating your employees with respect. If employees love who they’re working for, love the products they’re selling, and are educated on them, odds are your customer service will be great. Here’s Business Week’s top 10 and why they made the list. 1. USAA ‘ With their service team of 12,400 receiving 250,000 hours of reinforcement training a year to service military personnel with they know their product. 2. LL Bean ‘ In the 2007 holiday season, they took time to store up their inventory, leaving less customers calling the call center to complain about items being in stock, even with the extra goods they had left over. 3. Fairmont Hotels & Resorts ‘ All employees get the luxury service when they start the job so they know what it’s suppose to be like for the customers. 4. Lexus ‘ They set up an online chatroom to converse with customers online who are thinking about buying Lexus vehicles. 5. Trader Joe’s ‘ They make an effort to pay their employees the average income in their community, and pride themselves on customer interaction in the store. 6. Starbucks ‘ January started, and they made customer service their number one priority, making changes to their current rocky business. 7. Jet Blue ‘ Their new terminal at JFK Airport in New York City will bring more security outlets, as well as more eticket kiosks. They’ve also added a Customer’s Bill of Rights. 8. Edward Jones ‘ In 2007, they implemented a system to recognize branch managers who excelled at customer service. 9. Lands End ‘ In Sears stores, their current owner, they’ve added in-store monogramming, and also computer kiosks so in store customers can browse online. 10. Ace Hardware ‘ The employees focus on being knowledgeable about their tools. This year, they’re having every employee carry around a skill matrix card, so if they’re not the expert on certain tools, they can quickly connect customers with the right person.