Starbucks: A Customer Loyalty Story to Learn From

Starbucks has long been cited as a business with great customer loyalty and high levels of customer satisfaction. The company knows how to keep its customers delighted and thus build a huge fan base of promoters. The coffee giant enjoys a Net Promoter Score® of 77, an unparalleled customer loyalty for its sector. Let’s explore some of the tactics Starbucks uses to achieve such a high standard NPS.

1. My Starbucks Idea

In 2008, Starbucks launched “My Starbucks Idea”, an ideation site aimed at creating customer engagement and making customers feel like valuable stakeholders. With “My Starbucks Idea”, the American coffee company created a place for customers to leave their feedback on what they’d like to see as product and services from Starbucks, but also track how many and which of their suggestions are acted upon. As such, the beloved coffee maker was able to show customers their opinion matters and helps the company be more customer-centric. From its inception in 2008 till 2013, Starbucks has implemented over 275 customer ideas, ranging from product and services improvements to corporate responsibility ideas.

“My Starbucks Idea” has two important benefits for the coffee maker. One, it creates a base of satisfied and loyal customers, happy that their feedback is valued and acted upon. Imagine the positive surprise a customer has when they submit an idea through the community and see that it is taken into consideration by Starbucks’ management. Second, “My Starbucks Idea” also helps the company make business decisions on what products and services would be well received by customers, thus increasing their ROI results.

As such, “My Starbucks Idea” has become an innovative Voice of the Customer (VoC) channel, creating a loyal customer following and a place for Starbucks to directly interact with customers and make meaningful business decisions.

2. Reach out to detractors

According to the American Customer Satisfaction Index, in 2015 Starbucks’ satisfaction ranking fell 3% from the previous year, thus placing the company at #10 in the list of top 10 fast-food chains. According to analysts, the decrease in customer satisfaction levels was due to customer complaints regarding changes to Starbucks’ morning menu. Tracking customer feedback from the “My Starbucks Idea”, the coffee maker learnt that many of its loyal customers thought Starbucks moved too far away from its branded product line with the new breakfast menu.

“I’m not a fan of the new line. Their product has lost some of that freshness and flavor that it used to have.” - Starbucks customer feedback

“Feels too fancy,” a customer in Pittsburgh named Chris Lovett posted on Twitter. “I just want a donut now and then.”

Customer dissatisfaction with the new breakfast menu was so great that Starbucks felt their customer loyalty is jeopardised. As a result, the company decided to listen to its dissatisfied customers and bring back some beloved products from their old menu.

“We’ve got a few products that we are going to bring back from the old menu,” Troy Alstead, chief operating officer for Seattle-based Starbucks, said in an interview. “Some customers missed a few things.”

Following improvement changes, Starbucks’ customer satisfaction index inched up 1% to 75 in 2016.

American customer satisfaction index scores of Starbucks in the United States from 2006 to 2016*

3. Reduce Effort

Another step Starbuck has taken to delight its customers is the Mobile Order & Pay option. Using the Starbucks mobile app, customers are able to select and customise their food and drinks, select the collection store and pick it up in a matter of minutes. With the Mobile Order & Pay option Starbucks has managed to not only offer a superior customer experience, but also an effortless one. Customers who use the mobile app to order their coffee in advance can skip the queue when collecting it. Starbucks has recently revealed that Mobile Order & Pay option has been received great by its customers, comprising 6% of Starbucks 2016 US sales in the quarter overall and 7% in September, a figure up from 5% in Q2. Business Insider also reports that at some Starbucks locations, up to 20% of orders at peak hours have come through mobile order-ahead. Starbucks also noted that mobile order-ahead has lead to increased productivity in stores, which helped improve efficiency and further offer an effortless experience to customers.

Starbucks’ commitment to a superior and effortless customer experience has helped the brand build a loyal base of customers. Research by CEB has also shown that there is a correlation between Customer Effort Score (CES) and NPS. According to their study, low effort companies had an average NPS score of 51, while high-effort companies averaged -31. Clearly Starbucks’ commitment to offering an effortless customer experience are paying off, with the brand enjoying an NPS of 77.

Final Words

When it comes to NPS, Starbucks' applies a set of tactics to keep customer satisfaction and loyalty at a high level. Gathering customer feedback through the launch of the "My Starbucks Idea", reaching out to detractors and reducing customer effort are all factors contributing to Starbucks' NPS of 77. 

If you'd like to learn how to get to the root cause of customer dissatisfaction like Starbucks, make sure you read CustomerGauge's eBook below. The Root Cause Analysis Handbook will help you get to the heart of customer churn issues, as well as determine how to grow your NPS. 

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