Title: The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary
Author: Joseph Michelli
Publisher: McGraw-Hill Education (November 28, 2006)
Reviewer: Aditya Jadhav, CFA
I love days when I could go to the coffee shop unhurried and have my hot Latté while reading. One such fine day when I was flipping through newspaper, news that transfixed me was that Starbucks is entering India in a joint venture with the Tata Group, when rumours were making rounds that Jubilant Foodworks may tie up with Starbucks. With revenues of $13.3 billion last year and 20,891 shops in 62 countries, Starbucks is clearly the world’s top coffee retailer. But in a predominant Indian tea market, where there are already about 1700-1800 operating coffee shop chain stores; how Starbucks will be able to make the difference and woo customers with the help of a partner, who don’t even have the experience of coffee retailing. These all questions started making ripples in my mind and compelled me to explore into the world of Superbrand called Starbucks.
With more than 25% annual stock returns for last two decades, Starbucks is more than just a Wall Street Cinderella story; it has come a long and hard way. It is not an easy task to inspire a coffee drinker to give up his regular coffee while also asking him to pay six or eight times more for rich, exotic coffee blends when ordinary is all he’s ever known? Starbucks has changed the way the world experiences coffee, but it has also done much more with business, marketing, and even popular culture. Starbucks has grown from humble beginnings in Seattle to a grand success story based on a Chairman Howard Schultz’s vision to create a third place in customers’ lives after work and home. The third place will be a perfect blend of charm and romance of the European coffeehouse, and the best quality coffee – a tradition of Starbucks. Customers can’t go to Disney World every day, unfortunately, so Starbucks is their affordable luxury.
You might have come across many management books that discuss company’s success story as its history, its purpose, its reason for being, but this book is an exception to this template. In this book Author Joseph Michelli has narrated the story that Starbucks customers have about their experience with the brand. This book had led to the identification of five key principles that forms the success formula for Starbucks and provides a number of anecdotes based on how the company and its employees have fortified their association with customers using these following principles.
- Make It Your Own
- Everything matters
- Surprise and delight
- Embrace resistance
- Leave your mark
This book would be very useful for all those who are working in service industry, as it discusses why Starbucks has become very successful and remains in the heart of many of its loyal customers. There’s surely something in this book that will help every entrepreneur/manager transform his ordinary, even mundane business such as coffee retailing into an extraordinary business success. In order to prove the importance of customers and employees in success of Starbucks, Michelle has taken help of Schultz’s statement which summarizes the whole business model of Starbucks in a single line i.e. “Starbucks is not in the coffee business serving people, but in the people business serving coffee”.
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. Author Joseph Michelle finds ‘Be welcoming’ means forging a bond in order to remember a customer’s needs and preferences and elevating customers’ in-store experience to let customers know that they are important, so that infrequent visitors become regulars, many of whom end up customers for life. To prove this point Michelli points out how one group of baristas or partners at a California decided to take signing lessons to communicate with deaf customers more effectively. As a result of these efforts, Starbucks reputation in the deaf community spread well beyond that California location.
Joseph Michelli outlines that the lion’s share of Starbucks’ success comes from its creation of experience for customer and business culture. Once a business culture and leaders care enough to surprise their staff, employee morale soars, and chain reaction of surprises takes place. Not only employees engage themselves more passionately in their work, but they also serve and surprise customers enthusiastically. When others rely on Starbucks to provide them the experience that they expect, it reinforces the image and strength of their brand in the minds and hearts of your customers.
All of us leave some mark on the world either positive or negative. Although Starbucks leadership has already left a huge mark on communities throughout the globe, the company isn’t finished yet and encourages us all to be what Mahatma Gandhi suggested we could be, namely, “The change we wish to see in the world.” Michelli proposes tenets in this book that are simple, yet not simplistic to implement in organization. They are results-oriented and can be deceptively powerful when properly applied in your organization.