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Starbucks CRM case study

By August 3, 2021August 18th, 2021Case Study

Introduction

Starbucks is an international player selling its premium brand of roasted coffee, espresso beverages and coffee based products and accessories. The three major FDI strategies adopted by Starbucks are licensing, subsidiary total ownership and joint ventures. Based on the characteristics of the market, Starbucks had planned their entry using the best suitable strategies and was successful in setting up an elegant and urban setup with coffee culture through its differentiator strategies providing high quality and tasty coffee and other combos with variant options as beverages. Starbucks also trained the internal domestic staff on their format and the technical know how in order to provide as standardized taste to the customer.

The Industry-Big picture

1. Target markets and Customer Portfolio

2. Customer characteristics   and Demographics 

  • Women  Age 18 – 40, high income; Live in wealthy areas
  •  Young Adults Age 18 – 30, dine out a lot 
  • BABY BOOMERS High level of disposable income available 
  • THIRD WAVE COFFEE health conscious, snack, meal buyers 40% of customers make up approximately 60% of Starbucks revenue.
  • CUSTOMER SEGMENTS Millennial Above average income Moms Slightly lower incomes.

3. Value proposition 

    •  High quality of coffee Inviting Atmosphere Customer Intimacy 
    • DUNKIN DONUTS Quality Coffee Affordable Prices Fast and Friendly Environment 
    • CUSTOMER EQUITY – CLV ANALYSIS
    •  Star bucks and Dunkin Donuts  prefer customers that order high margin, low cost products 
    • Customer Life Value favors Starbucks with $1,280 higher value

4. Social media bench-marking 

    • YouTube Instagram
    •  Facebook 
    • Google +
    •  Pinterest 
    • My Starbucks Idea SOCIAL MEDIA Communicate > Advertise Friendly atmosphere ONE-TO-ONE MARKETING 
    •  Largely based on My Starbucks Rewards
    • Welcome Level, Green Level, Gold Level 
    •  Customized Loyalty Program 
    • Depending on the data stored by Starbucks, different people may receive different offers/promotions on different days.

CRM objectives in Starbucks

  • Attracting and Cultivating Customers 
  • Sales Efforts Employees are treated well and offered full benefits Training emphasizes soft skills 
  • Baristas Work Hard Customer Centric Culture Customer Attraction Everything starts with employees! 
  • Give them what they want! Works as an open forum where customers can voice their opinions 
  • Popular ideas are voted on so others can see ϖ Starbucks employees actually contribute to these forums 
  • Popular ideas are actually implemented My Starbucks Ideas

Managing relationships with Salesforce Automation and technology CRM

The Data channels for Salesforce Automation and Technology CRM are listed as below :

  • Starbucks Rewards Loyalty Program
  • My Starbucks Idea 
  • Third Party Websites
  • Mobile Application Tools 
  • In-Store Feedback 
  • Calling Center Types of Data
  • Contact Information 
  •  Location, Age, Gender 
  •  Product Preferences 
  •  Customer Thoughts, Experience and New Ideas 
  •  GSM Location 
  •  Buying Patterns 
  •  Store Experience 
  •  Recommendations
  •  Customer Satisfaction Data Analysis 
  •  Rewards Card Information Processing Division 
  •  Salesforce.com
  •  Code link 
  • Starbucks Calling Center 
  •  Store Manager Business Decisions 
  •  Starbucks Seattle Customer Relations Department 
  •  Starbucks Seattle Headquarters

Absolute CRM experience @Starbucks outlet

  • Customer Interactions  facilitated using direct counters with pleasant staff
  •  Licensed to Bon Appetite 
  • Observed 20 customers over 45 minutes Main Observations and Wait times are less. 
  • No names on cups and Bags placed in spills at sugar/milk table

CRM Process

  • A Typical Starbucks Customer Experience Customer Actions.
  • On Stage Visible Employee Actions Back Stage Invisible Employee Actions Other Products to sell like CDs, coffee machines etc. 
  • Sugar Station Arrive at Starbucks Ask questions and order the drink. Pay with the loyalty card or cash Look for interesting products.
  • Pick up the drink Look if there something interesting going on in the community Tables, Chairs, Couches.
  • Put sugar into the drink Find a table to sit or leave Answering questions.
  • Taking the Order, Processing the Payment Prepare the coffee and building customer relationship.
  • Refill Sugar station if needed Clean tables if needed Average Timing 00:00 min 3:00 min.
  • Deliver the coffee Thanking the customer Greeting the customer Keeping up with inventory. 
  • Talking to the manager Stocking and prepping POS System, Cell phone app, Rewards Card Coffee Machines and Support Processes for the customer.

Recommendations

There is a serious need to set right expectations on the  Average Customer Experience Rewards Loyalty Program as there is a notion that Customers are not rewarded according to the amount of money spent Rewards expire soon. It is better if Starbucks can adopt the following 

  • Rewards Program Adjustment
  • Award customers with stars for every $10 spent Benefits 
  • Increased Customer Retention for customers who spend more money
  • Ability to give more promotions to those who spend more 
  • Redesign the rewards program and the mobile app 
  • Advertise the change 
  • Educate the employees Starbucks

Conclusion

Starbucks case study is highly facilitated by a diverse approach on the customer segment creating a lifetime value for the customer on social media. The company has provided excellent training on CRM systems for its employees and they are very attenuated to seek customer satisfaction at the higher degree.

Nasir Khan - CRM Author

Nasir Khan - CRM Author

Deployed robust sales, marketing and customer support automation systems and implemented industry best practices/processes across verticals such as BFSI, Manufacturing, Real Estate, IT, ITES, eCommerce, Education etc.,