Yaro Blog

Reputation Management: Starbucks Offers A Simple Lesson In Good Customer Service

I was traveling around Queen Street West in downtown Toronto this week and as always I popped into a Chapters bookshop (like a Borders). In Canada most bookshops have either a Starbucks or a Second Cup coffee shop. Many of the posts in this blog were created in cafes inside bookshops around the world.

I ordered a tea and an oat brownie from Starbucks. The brownie was delivered instantly, but the tea wasn’t, so I walked over to the delivery end of the cafe and waited.

The customers just before me received their order and I expected mine next. The customers who ordered after me then walked up and collected their coffees. Then the next customer. Clearly my tea wasn’t coming.

I walked back around to the cashier section and spoke to the barista who took my order. He immediately realized that he had forgotten about the tea and in two seconds flat, made my tea and then blurted out something about a free tea and handed me a piece of cardboard that looked like this –

Starbucks Free Tea

In case you can’t read the print, here’s the bit that matters…

Starbucks Free Tea Fine print

Besides the funky design of this free beverage voucher, there’s nothing too groundbreaking about offering something for free when you don’t get good service, but let’s look at this a little deeper.

I waited about an extra minute longer for my tea than I should have. That is definitely not long enough for me to get angry and I was served very quickly once I notified them that my tea was missing.

Yet, despite this, the Starbucks policy is to offer a complimentary beverage even if their system is slightly out of whack. I walked away impressed that I scored a free beverage voucher, but not really because of the beverage itself, I was impressed with the customer service policy I just witnessed (hence I’m writing a blog post about it!).

Starbucks did not diminish in my eyes as a result of this incident. In fact they impressed me, so much so that I’m now writing a blog post that will be read by thousands of people proclaiming good things about Starbucks service (that’s some good word of mouth). Of course not every Starbucks customer has a blog they can rave to when something happens, but every person has friends and people they talk to, and this one policy of Starbucks will encourage word of mouth through normal social interaction too.

Standing Out In A Crowded Marketplace

Starbucks free beverage policy is just one example of how a business can rise above the crowd and go from average to good or even great. They do the little things better and they do them often enough that people notice.

The combined word of mouth of thousands of little positive anecdotes about a business circulating around society can add up to one powerful force of good will and positive branding. No advertising campaign can rival the impact of a good reputation and a good brand spread organically, born from a superior product delivered with superior customer service.

Most coffee shops, given the situation I experienced, would not have offered a free beverage. Sure, I would have received an apology and my tea promptly delivered, but the extra step of the free beverage is not standard practice for a one-minute late tea.

Some coffee shops can’t justify the expenditure of offering a freebie for every tiny mistake made by staff. Perhaps they can’t or just don’t train their baristas according to a well documented system or don’t take care when hiring staff to locate good people. As a result, staff mistakes are more common and thus it’s not realistic to offer compensation for tiny errors.

Of course Starbucks understands that the cost of giving away a few beverages is far less than the benefits gained in brand perception and positive word of mouth as a result of above average customer service. Sadly many small businesses owners don’t see the connection between good customer service and it’s impact on future sales, they only see the cost incurred today for giving away something for nothing or taking extra time and resources to train staff and build a system.

Reputation Management Through Customer Service

The real marketing trenches for companies is the “battle field” of customer service. Your best opportunity to make an impression is during direct contact with the people interacting with your product or service and spending their hard earned money for the right to do so. The point of consumption is your chance to truly shine, or the opposite, to completely destroy what good reputation you have.

Unfortunately one unhappy customer is likely to do as much damage as ten happy customers can do good, so you need to get this right a lot more than you get it wrong just to keep your reputation stable. If you want to go beyond the average and stand out from the crowd, you need to repeatedly impress your customers in many ways that your competition do not.

The lesson here for us is to find ways to look at the customer service function of our business as a huge opportunity to stand out from the crowd and create evangelists.

In the Internet business world, simply responding to email queries promptly is one thing we can do that still manages to impress people, because other companies do not do it. We can take a lesson from Starbucks and offer refunds, discounts and freebies whenever our system breaks down.

The key is to do more than whatever the market currently expects. Perception, as always, plays a huge role. While you might think responding to email queries personally is just common courtesy, people have come to expect poor service online especially when it comes to email communication and thus simply being readily available makes you look good.

In some markets though, you need to innovate and think of new and better ways to do things because existing businesses in the industry have already raised the standards high. As a business strategy you can look at how companies that perform at the top of similar industries to your own operate, and replicate their systems in your market as a means to establish competitive advantage.

Long Term Thinking

Reputation management is not something you feel the effects of immediately. It can take a while for a bad reputation to hit your bottom line, or a good one to increase profits. What’s important is you think about this as a long term business strategy built upon the hundreds of little things you can do right on a daily basis.

I believe customer service represents one of, if not the best opportunity for business to foster a good reputation, which can translate into a powerful and natural force of viral marketing.

Nothing is better for a business than a very satisfied customer – one so satisfied they are compelled to talk to other people about their experiences with your service, using a completely natural dialog. This outcome can be a daily event and it can happen to hundreds or even thousands of your customers, if you have a system that creates unusually satisfying experiences because you find ways to be better than what people perceive as good.

Think about all the little things you can do to impress your customers today so that tomorrow your brand perception is so good, you enjoy a competitive advantage because of how people think, feel and talk about your business.

Yaro Starak
Reputation Manager

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