The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinaryby Joseph Michelli
WAKE UP AND SMELL THE SUCCESS!
You already know the Starbucks story. Since 1992, its stock has risen a staggering 5,000 percent! The genius of Starbucks success lies in its ability to create personalized customer experiences, stimulate business growth, generate profits, energize employees, and secure customer loyalty-all at the same time./p>/p>/b>
WAKE UP AND SMELL THE SUCCESS!
You already know the Starbucks story. Since 1992, its stock has risen a staggering 5,000 percent! The genius of Starbucks success lies in its ability to create personalized customer experiences, stimulate business growth, generate profits, energize employees, and secure customer loyalty-all at the same time.
The Starbucks Experience contains a robust blend of home-brewed ingenuity and people-driven philosophies that have made Starbucks one of the world's "most admired" companies, according to Fortune magazine. With unique access to Starbucks personnel and resources, Joseph Michelli discovered that the success of Starbucks is driven by the people who work there-the "partners"-and the special experience they create for each customer. Michelli reveals how you can follow the Starbucks way to
- Reach out to entire communities
- Listen to individual workers and consumers
- Seize growth opportunities in every market
- Custom-design a truly satisfying experience that benefits everyone involved
Filled with real-life insider stories, eye-opening anecdotes, and solid step-by-step strategies, this fascinating book takes you deep inside one of the most talked-about companies in the world today.
For anyone who wants to learn from the best-and be the best-The Starbucks Experience is a rich, heady brew of unforgettable user-friendly ideas.
After two years of access to the inner workings of the coffee-retailer behemoth, Joseph Michelli wrote The Starbucks Experience in an effort to explain the company's runaway success. From its establishment in Seattle in 1971 as a single-location coffee shop, Starbucks now has more than 11,500 non-franchised locations worldwide, annual sales of more than $600 million and has been rated as one of the best Fortune 100 companies to work for. Since 1992, its stock has grown a staggering 5,000 percent.
How has Starbucks prospered based on the supposedly absurd idea of a $3 cup of coffee? By having a progressive corporate culture, says Michelli, and passing its values to all employees - "partners" as they are known in the company. Michelli says that by using the same principles, almost any company can become more successful.
Concentration on Basics
While part of Starbucks' success is drawn from extensions of its core coffee business - retail sales, music, gift packs - the lion's share comes from its creation of experience. This is true not only for customers but, perhaps more importantly, for Starbucks' partners (employees). Going beyond things such as stock options and health insurance (provided even for part-timers), Starbucks "consistently spends more on training than it does on advertising," writes Michelli. Its program includes product information, how to create good customer relations, the basic principles of success and employee empowerment strategies.
This philosophy has helped keep Starbucks' employee turnover rate 120 percent below the quick-service restaurant industry average. Partners are encouraged to have fun, get to know customers' likes and dislikes and treat each other with respect. Management sticks to the same tenets. Michelli quotes Starbucks International President Martin Coles saying, "It's impossible to ask our people to behave the same way if we're not willing to go down that track ourselves." Michelli says that regardless of a company's resources, all principals can treat employees in a way that will inspire them to creativity and passion.
The Big Five
Michelli breaks down the Starbucks success formula into five parts. Number one is "Make It Your Own." By virtue of their stock options, partners consider themselves part owners of the corporation and most try to meet the firm's mission and priorities. In turn, the company makes it a point to encourage, listen and respond to partners' suggestions and comments. Additionally, partners are encouraged to find out customers' needs and respond to them on as personal a level as feasible. Partners are also urged to become involved in their communities, another Starbucks passion.
The second principle is "Everything Matters" - strive for consistency in quality and environment and pay constant attention to detail. It also means never compromising quality, making sure every partner in every location is knowledgeable and friendly, and ensuring that every Starbucks location offers a welcoming atmosphere that makes customers want to return.
Next is "Surprise and Delight," which Starbucks takes to new levels. This principle might involve something as simple as opening early for a customer waiting outside or as involved as creating a city-wide coffee-tasting day, where Starbucks' partners set up tables at train stations, offering commuters free coffee - both examples Michelli provides.
The fourth principle, "Embrace Resistance," addresses how Starbucks' partners are trained to turn negative feedback from customers into opportunities to improve the business and strengthen the relationship. All levels of management are asked to commit to this. Similarly, stores are expected to always seek options to seemingly "impossible" customer requests.
The last principle is "Leave Your Mark." This addresses the company's commitment to not only community outreach, but to environmental issues, positive change and fiscal responsibility.
Referring to his subtitle, Michelli concludes that any firm can become more "extraordinary" by using these five Starbucks' principles.
Why We Like This Book
In The Starbucks Experience, Michelli has produced something more than the typical Fortune 500 company profile. Through his use of personalized stories and quotes from present and former Starbucks' partners, he creates a framework of the Starbucks strategy useful enough for any business owner. Copyright © 2007 Soundview Executive Book Summaries
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Read an Excerpt
THE STARBUCKS EXPERIENCE5 Principles for Turning Ordinary into Extraordinary
By JOSEPH A. MICHELLI
McGraw-HillCopyright © 2007 Joseph A. Michelli
All right reserved.
Chapter OnePRINCIPLE 1 make it your own
"This is the true joy of life, the being used up for a purpose recognized by yourself as a mighty one; being a force of nature instead of a feverish, selfish little clot of ailments and grievances, complaining that the world will not devote itself to making you happy." —GEORGE BERNARD SHAW
Material Ownership versus Making It Your Own
Business leaders today want their employees to be fully engaged in their work rather than simply going through the motions. Often employees do not see how their efforts help the organization succeed. Similarly, employees cannot see how the business's success relates to them. When this type of disconnect exists, it is usually because senior management has failed to demonstrate to staff members the constructive impact they have on those they serve.
Like most companies, Starbucks has wrestled with ways to invite its partners to fully engage their passions and talents every day in every interaction at work. Simultaneously, the leadership has to ensure that individual partners' differences are blended into a generally uniform experience for customers.
Finding a balance between these two important, yet sometimes divergent, leadership responsibilities can be awkward. Yet through its principle of Make It Your Own, Starbucks has succeeded in creating a unique model that encourages partners at all levels to pour their creative energy and dedication into everything they do.
No manager can tell employees how to bring out their individuality while functioning effectively in accordance with the business's priorities; no scripted customer service approach can make this happen. But leaders at Starbucks have provided a structure that allows partners to infuse themselves into their work, so that they can inspire customers in legendary ways. The leaders call this the "Five Ways of Being":
To reinforce these concepts, Starbucks management developed a pamphlet that fits neatly into a partner's apron pocket and is appropriately referred to as the Green Apron Book. This book offers concrete ideas on how to personalize relationships with customers by giving to, connecting with, and elevating customer interactions.
In an article for Tom Brown's bankstocks.com, David M. Martin, chief training consultant of NCBS, an industry leader in retail banking solutions worldwide, states that the Green Apron Book, along with Starbucks Five Ways of Being, "truly encapsulates the core philosophies of Starbucks. Cover to cover, it may take five minutes to read ... and that's if you pause to sip your coffee a few times. Think about it. In essence, the company is marketing to its employees how important the principles and philosophies contained in this book are."
David notes that Starbucks leadership has built an optimistic message into the book: "Instead of overwhelming folks with reams of minutiae and too-rigid instructions, it gives guiding principles of the environments they hope to create and legendary service they strive to provide." This is leadership at its best: simple instruction provided in an appealing way, with a spirit that offers hope.
Since you probably don't have a green apron, let alone a Green Apron Book, let's take a look at how Starbucks guides its staff members into making the Starbucks Experience uniquely their own.
While most individuals would not think of inviting guests into their home, only to ignore them, many business leaders fail to make their companies equally inviting. At Starbucks, "being welcoming" is an essential way to get the customer's visit off to a positive start. It is also the foundation for producing a predictably warm and comfortable environment. It enables partners to forge a bond with customers so that infrequent visitors become regulars, many of whom end up customers for life.
Many important customer questions are answered in the first moments of a business interaction. Do the staff members care to get to know me? Do they remember me? Will they take care of my needs? Do I matter? Am I invisible?
Starbucks management recognizes that these are key concerns for every person with whom the company does business. The leadership emphasizes the creation of a welcoming experience precisely to let customers know that they are important. According to Starbucks International president Martin Coles, "People want to be recognized. They want to be celebrated in some way. They want to be made to feel as if they really do count for something. And they want a place where they can belong in the community that stands for something more than just an enterprise that makes money. The thing in our company and the thing that works universally is this whole notion of Third Place. It's about the in-store experience—all of it."
At its essence, Starbucks management defines be welcoming as "offering everyone a sense of belonging." The leaders emphasize that partners can and should use their individual talents and knowledge to create a place where people feel that they are a priority and where their day can be brightened, at least for a moment. This experience is what most customers seek from Starbucks. Therefore, the leaders expect that customers will consistently be welcomed at all locations, with the partners fully engaged in making that happen. With this expectation in mind, the leaders encourage partners to use their own unique style to produce inviting encounters.
What's in a Name?
Welcoming people by name and remembering them from visit to visit is a small thing, but it counts. The great Dale Carnegie recognized this in his book How to Win Friends and Influence People. Carnegie remarked, "Remember that a person's name is to that person the sweetest and most important sound in any language." Carnegie even suggested that a person's name may be his or her most valuable possession.
Barista Joy Wilson shows what is possible when staff members put their own individual style into being welcoming, "I'm the drive-through queen at my store. I always set out to do the best job I possibly can. One of the ways I do that is I learn people's names and drinks and the name of their dog and where their kids go to school and whatever else I can find out about them."
Joy is serious about knowing customers' names. In fact, after work she enters information about her customers into a spreadsheet, which she later reviews. Starbucks leaders helped Joy appreciate the importance of being welcoming and praised her approach. They do not expect or encourage others to use Joy's method. Instead, the leaders provide partners with the freedom to find what works best for them, their customers, and their stores. And it's through leadership's guidance, encouragement, and acceptance of their uniqueness that partners generate new ways to excel.
When someone actually notices us, as Joy notices her customers, it's almost shocking, particularly if we haven't visited that business in a while. In today's frantic world, most of us expect to just blend in with the crowd. Unfortunately, as much as each of us may want to stand out, we often fear that we are just another member of the herd.
Starbucks leadership understands that customers long to have their uniqueness recognized. Therefore, these leaders impart the importance of treating people in a way that leaves everyone feeling unique and special—whether they are customers, clients, or staff members. Paul Ark in Bangkok provides a perfect example of how a Starbucks partner made him feel truly important. A self-proclaimed "sucker" for Frappuccino® blended beverage with raspberry syrup, Paul hadn't been to the Chidlom Starbucks in almost two months, but as he was standing behind two other customers in line to order, one of the baristas looked over and said, "Grande Vanilla Crème Frappuccino® with raspberry syrup, right?"
Paul was shocked, but the experience made a deep impression on him. As he notes, "Most companies chant 'customer service' like some mantra, as if printing it enough times in their corporate glossies means they are actually paying more than lip service to the concept. But here is a Joe Schmo line worker at Starbucks defining what customer service means in real terms to real customers: building a one-on-one rapport in order to remember a customer's needs and preferences and creating a smooth and efficient in-store experience."
Successful business leaders emphasize, train, and encourage a respect for the discretion and uniqueness of their staff. At Starbucks, that discretion comes in the form of giving priority to being welcoming, demonstrating generally what being welcoming looks like, refreshing that image, and then letting people make that concept their own as they bring it into the lives of those they serve.
Starbucks leadership helps partners embrace the idea of being genuine and the importance of that idea to the Starbucks Experience. The concept of what it takes to be genuine is fairly straightforward, but profound. At Starbucks, being genuine means to "connect, discover, and respond." Focusing on these three elements in each customer interaction forms a quality relationship. By contrast, how many of us have been served by people who gave the impression that they couldn't have cared less?
Customers aren't looking for best friends; they just want a positive connection, and they want their needs to matter. They resent being treated as if they were just wallets with humans attached. In order for a connection to occur, a person has to feel heard. Genuineness requires listening through both verbal and nonverbal channels.
It is through this listening that baristas like Angela anticipate the needs of their customers. Angela recalls, "It was Saturday, and this poor woman who was just an emotional wreck came through. It was her first visit. Our menu can be a little intimidating, so she stared and then ordered just a plain coffee. When we asked her if she was sure she didn't want to try something else, she explained that she was confused and overwhelmed, and she looked like she was about to cry. In the meantime, we had someone make a Toffee Nut Latte, because who doesn't like that? We said, forget the plain coffee; we made you this Toffee Nut Latte—on the house today for you to try. She was thrilled! She drove off, and we didn't think much of it other than that we were happy to have made her happy."
But the story gets better, as Angela explains. "A couple of days later, we got flowers sent to our store thanking us for 'saving her life.' Her letter explained that she had been having a really, really bad day. After she had visited our store, she had a piece of joy in her and was able to take care of her problems and even help someone else to feel better. She is now one of our regulars."
Angela and her colleagues took the initiative to create an experience for a customer that was well beyond anything that the customer could have expressed. That's being genuine and making the business your own.
Expectations and Service: Connect
Legendary service comes from a genuine desire and effort to exceed what the customer expects. Repeatedly, customers have shared experiences of Starbucks partners doing the extraordinary—making a connection well beyond some formulaic greeting. Take Lydia Moore from Oakland, California, for example. Lydia met the love of her life in Starbucks. While that meeting alone created a special connection to the coffee shop for Lydia, partners strengthened that connection in genuine ways.
Lydia reports that she felt the staff cared about her, and so she kept them posted on the development of her relationship and her engagement. Lydia says, "When we went back and told the two clerks at Starbucks, they were so excited! They put our picture up on the board, and we were like celebrities at that store."
Lydia invited the partners to her wedding, and they, in turn, donated coffee for her special event. Unfortunately, in the first year of their marriage, Lydia's husband was diagnosed with cancer. Starbucks again served as an important connection: "While he was in treatment, in and out of the hospital, there were only two things he wanted—his Grande Drip and his Hazelnut Sticky Bun." Lydia's husband died just after their first anniversary. Lydia recalls, "When he passed away, I was devastated. Amazingly, the clerks from Starbucks came to the funeral, and you could see that they were genuinely affected by the loss."
Who wants to get connected and have to feel the roller coaster of emotions that comes with that? In many businesses, connections never happen. It's simply a matter of transactions. Then again, what's the value to customers if a service business offers only bland, sterile service? And why would employees want to participate in such empty exchanges? Ultimately, by connecting on a personal level, both customers and employees find enhanced meaning in ordinary moments.
When it comes to the ability of human contact to enhance a product, Howard Schultz, in an interview with Know™, put it this way:
We are not in the coffee business serving people, but in the people business serving coffee. The equity of the Starbucks brand is the humanity and intimacy of what goes on in the communities.... We continually are reminded of the powerful need and desire for human contact and for community, which is a new, powerful force in determining consumer choices.... The Starbucks environment has become as important as the coffee itself.
True leaders, in other words, show staff that their individual uniqueness gives them a special way to connect with others.
While listening is critical to creating a connection, business success requires the discovery of each customer's needs and individual situation. In a strange way, the customer relationship begins the same way a romantic relationship does—by seeking an understanding of another person's wants and desires. Sadly, many relationships (both customer and romantic) come to an end simply because one or both parties stop their process of discovery.
While customer service isn't about romance, Starbucks understands that discovery is essential to developing a unique and genuine bond. It is through inquiry that we find out the special qualities of all customers and sometimes help them gain an awareness of needs that even they didn't know they had.
Susan, a barista in Ohio, comments, "We get people who come into my Starbucks store to browse our merchandise. I love selling coffee machines because I know I can get behind our product. I've learned everything I can about all our machines, and I pair people up with the right one. I use the 'connect, discover, respond' model. I typically ask, 'Are you brewing it just for yourself? Because then a French Press might be great. If you need to brew 12 cups of coffee at once, then we've got our Starbucks Barista Aroma Grande™.' It's amazing how appreciative people are when you help them get their needs met."
While a lot of businesses actually do connect with their customers and discover those customers' needs, they don't always act on what they learn. They are long on interest and short on effort to address the customer's actual need. Customers feel betrayed when they are lured into believing that their input matters, only to find out that their preferences are ignored. Starbucks partners are trained not just to listen to their customers, but to take action immediately based on what they hear, and to learn from these experiences for future customer interactions.
Betty Doria from Middle Island, New York, reinforces this concept. Betty and her husband were traveling through Tennessee when they "made a wrong turn and accidentally found a Starbucks. There was a sign in the store for coffee with malt. Real malt! I got so excited because I hadn't seen anything like that since I was a kid in Brooklyn. I got to talking with the manager and started to tell her about how they made real malteds back then." However, says Betty, the manager "made my coffee with malt, and it wasn't that great." But instead of ignoring the customer's dissatisfaction, this manager listened to Betty and worked with her to make the drink to Betty's taste. Listening followed by action—those were the essential ingredients for the success of Betty's experience and the experiences of all customers and staff alike.
Connect, discover, and respond. Each of us can incorporate those elements into our relationships—with peers, supervisors, subordinates, and customers.
Excerpted from THE STARBUCKS EXPERIENCE by JOSEPH A. MICHELLI Copyright © 2007 by Joseph A. Michelli. Excerpted by permission of McGraw-Hill. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Meet the Author
Joseph A. Michelli, Ph.D., is the founder of Lessons for Success, a training, consulting, and keynote presentation company. He also hosts an award-winning daily radio show on KVOR-AM in Colorado and speaks to various organizations throughout the world. Visit josephmichelli.com
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Over the past few years Starbucks has become associated with coffee and the coffee house experience like Kleenex is with facial tissue. Starbucks has brought a huge change to the coffee industry and how Americans understand coffee. Many people will decry Starbucks as a monolith of burnt beans and bitter blends, and while I say to each his own, there is something special about the company behind the Siren. This book provides an overarching understanding of what drives Starbucks from its product lines, to the experience of its customers in their stores and how Starbucks connects to the communities that their stores are located in and from where their coffee is grown. Starbucks markets itself more than just a cup of coffee. The $2 Venti drip coffee is an entry key into its experiences in their stores. Working in Barnes & Noble Cafe and reading this book I understand how Starbucks has become the new "Cheers." Calling it the "Third Place" Starbucks-esque locations are where people meet up for relaxation or work. Their business model is being the place where people know you name, drink and face. A must read for anyone thinking of opening their own business or even just working in retail.
I expected this to be a book limited to what made Starbucks successful but to by 'surprise and delight' it caused me to look at myself and my business very differently. The Starbucks Experience also offered me leadership ideas from the top levels to the frontline of a rare American/International business. A MUST MUST read!
Everyone is so busy trying to network, make the right connections, finding the best opportunities and looking for the next big deal. Have you ever thought that maybe you should stop, breathe, and take some time to learn from those that have already paved the way for business success? These days with so much technology, we tend to concentrate more on getting the latest, faster speed, and improving our online presence while sacrificing business improvements, lessons learned, best practices, quality, mentoring each other and providing excellent customer service. Starbucks have the answer. Use Starbucks as a business resource to help you move forward. The Starbucks Experience is a must have for any business owner.
Hola, me gustaría comprar este mismo libro pero en español para Nook. Gracias,
Starbucks executives claim that the company's customer-friendly, socially responsible policies amount to a new business model, and author Joseph A. Michelli generally agrees. Certainly the company has been innovative and wildly successful. Unfortunately, Michelli's decaffeinated, artificially sweetened account of Starbuck's retailing prowess often reads as though the writer is giving a boost to the company's PR department ¿ and the book cover design doesn't help, with its Starbucks signature colors, logo (dutifully trademarked, as is every mention of every cup of Frappucino®) and inset of the brown, corrugated paper the company uses for cupholders. Some of Michelli's examples of Starbucks' caring policies are banal ¿ opening early or providing a free cup of tea are not major innovations, nor are they transferable examples. Yet the book usefully illustrates how far good service and community relations can go. Each chapter provides a readers' guide and sidebars about how to apply Starbucks principles to your business. We recommend sipping it for applicable tips and interesting stories.