Starbucks: Delivering Customer Service

The foundation of Starbucks was the idea, “third place,” and in its founder’s leadership, partner and customer satisfactions are the key to creating a welcoming environment that can be perceived as the “third place.” Christine Day, an executive of Starbucks, through analyzing Starbucks’ market research data, discovered that Starbucks customer satisfaction rate wasn’t as high as they had expected. With this fact, Day is deciding whether or not to make an additional $40 millions annual investment in Starbucks’ labor.

Break-even of the investment

The investment plan focuses on adding 20 hours of labor to 4,500 of the Starbucks stores, so per store investment is approximate $8,888.89. (See Exhibit 12) In addition, (see Exhibit 9 & 13) the annual sales difference between a satisfied customer to a highly satisfied customer is $172.39. For the $40 millions investment, Starbucks needs to, each store, bring 52 customers from “satisfied” to “highly satisfied” to break-even. (See Exhibit 14) The major concern of this investment is, however, is service speed the main driver of customer satisfaction?

Comparing Exhibit 7 with the case, and with the assumption of lower wait time lead to higher customer satisfaction. However, data shows that although Average Wait Time has decreased, customer satisfaction has also been decreasing throughout the years. It indicates that service speed is unlikely to be the main driver of customer satisfaction. In addition, the case stated that 61% of the respondents indicated that they agree “Starbucks cares primarily about making money.” This harms the core brand image as the “customer-oriented brand,” and it shows that Starbucks has lost the connection between the corporate and customers. Thus, it is recommended for Starbucks not invest solely in labor but also on corporate social responsibilities (CSR,) and more importantly, the marketing of its CSR.

Putting CSR on cups

The unique attribute of coffee