Executive Summary
In order to better tie customer satisfaction to the bottom line, Starbucks should spread the $40 million across creating a marketing function from within, increasing customer convenience through online/call-in/text ordering, and integrating incentives into the pricing structure. A marketing function will ensure that strategic decisions are more fact based as data will drive decision making. Marketing will also help derive campaigns that clearly communicate the value proposition. Customer satisfaction will increase as speed of service, attentiveness, and quality will have a positive correlation. Finally, incentives will be attractive to new customers who have less income and help Starbucks show all customers that they are valued.
Situation
Starbucks believes that partner satisfaction equals customer satisfaction; however, they do not have metrics that directly support this claim. Although they have had rapid growth since 1971 with little to no advertising, Starbucks discovered through market research that they are not always meeting customers’ expectations in the area of customer satisfaction despite the partner satisfaction rate of 80-90% and intensive the training they receive. Day, the Sr. VP of Administration and her team responded to these concerns by devising a plan to invest an additional $40 million in the company’s 4,500 stores which is equivalent to an additional 20 hours of labor per week. The goal behind this is to improve the speed of service and customer satisfaction. With the customer landscape of Starbucks changing and lack of product differentiation, it is important to better understand the service gap.
Recommendations and Rationale
Starbucks customer base is changing, first time customers in the past ...