Starbucks Case Study

1. Why has Starbucks’ customer satisfaction scores declined?

As it is stated in the case Starbuck’s began to lose sight of their customers, “We’ve lost the connection between satisfying our customers and growing the business”. The company employed 50,000 partners in the U.S., most being hourly-wage employees called baristas. Turnover in Starbucks was one of the lowest in the industry at 70%. This was a key element when it came to servicing the customer. Starbucks felt that less employee turnover enabled stores to recognize regular customers and provide personalized service. In exhibit 10, 65% of the customers’ rate fast service as a key attribute. When Starbucks first started, the customers who came through were already well educated on coffee. The problem is as the company evolved the complexity of the job and the hundreds and hundreds of combinations of drinks has slowed the customer wait time. It became much more difficult because customers where customizing their drinks, reducing the speed of the baristas. Starbucks had an aggressive growth strategy. They wanted to expand the number of U.S. stores to 10,000. The company wanted to match with areas that were parallel with the demographic profile of a typical Starbucks drinker. The problem was the Starbucks drinker had been evolving and Starbucks did not take this into account. Newer customers were younger, less educated, and in a lower income bracket. The key figure that stands out comes from exhibit 8, 40% of established customers said Starbucks was for someone like them compared to 15% of new customers. Also, Market research showed that 61% of customers agreed with the statement, ”Starbucks cares primarily about making money”, this is not particularly good for a company who is expanding stores and wants to satisfy customers. In conclusion, Starbucks was growing its business faster than it could find ways to keep customers satisfied. It needs to bridge the gap