February 27, 2008
Starbucks Trains, Rivals Seek to Gain
Customers walking into any of the nearly 7,100 Starbucks across the U.S. today will be greeted with a sign that reads: “Your drink should be perfect, every time. If not, let us know and we’ll make it right.”
That message follows a training session that took place yesterday shutting down every Starbucks for a three-and-a-half hour period. The company, back under the leadership of CEO and founder Howard Schultz, is seeking to recapture the magic that created Starbucks devotees across the nation and major portions of the globe.
The training session, described in an Associated Press report as “part back-to-basics tutorial, part pep rally,” was intended to help Starbucks’ baristas pour the perfect cup noted in the company’s signs. Roughly 135,000 employees of the coffee chain were expected to participate.
Ann-Marie Kurtz, Starbucks’ manager of global coffee and tea education, told ABC News that closing the stores would give “baristas the chance to really slow down and have the chance to really celebrate the art of espresso.”
Ken Nye, owner of Ninth Street Espresso in the East Village of New York, didn’t think there was much that would come out of Starbucks training.
“To say that 3.5 hours is a barista training is hard to swallow. Company training is another story,” he told ABC. “It probably makes sense when you have hundreds of thousands of employees. Probably makes sense that everybody learns about thirty rules of operation, but it’s also probably got nothing to do with the art of making coffee.”
Mr. Nye said training for barista at Ninth Street Espresso took up to three months under the tutelage of a dedicated trainer.
“Our baristas have a knowledge of coffee – the entire process from seed to cup. We want our staff to understand coffee and have a refined and developed palate, and teach that to our customers.”
While closing for a short period of time isn’t expected to have much of an impact on a company the size of Starbucks, competitors saw it as an opportunity to try and romance consumers away from their rival.
In Seattle, Caffe Vita Coffee Roasting Co. shops gave away free shots to consumers while Starbucks was closed.
Across the country, Dunkin’ Donuts was running a 99 cents special on small cappuccinos, lattes and other coffee drinks for most of yesterday.
Robert Toomey, an analyst with E.K. Riley Investments, told The Associated Press that the Starbucks training session was something that needed to be done.
“They know they’ve fallen short,” he said. “The quality of the product has deteriorated a bit over the last few years, and they know they’ve got to improve it.”
Discussion Questions: What do you think came out of the training session yesterday for Starbucks and its competitors? Will consumers have a more positive view of Starbucks as a result of the highly publicized event?
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I thought Dunkin’ Donuts’ marketing was brilliant–the $.99 Latte special ran the length of time Starbucks was closed and it was very well publicized. DD radio commercials this morning had the takers expressing their surprise at how good the DD Lattes are–they liked it better than Starbucks. Starbucks has cachet that Dunkin’ Donuts doesn’t have but in this economy, Dunkin’ Donuts may have the edge.
It’s good PR. However, after 3.5 hours of staff training, I would hope that my drink would be perfect, every time. I suspect even the Starbucks folks aren’t confident that this will be the case. Why else would they post “Your drink should be perfect, every time. If not, let us know and we’ll make it right.” Better to say just the first part…with confidence. If it isn’t right, the customer will likely demand that it be made right. No need to highlight that possibility.
I congratulate Howard Schultz for coordinating this unprecedented action. More retailers should consider this type of focused communication and training, especially when it targets supporting core components of the company mission.
Three of their core mission statements were being addressed through this action: 1) Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.
2) Develop enthusiastically satisfied customers all of the time.
3) Provide a great work environment and treat each other with respect and dignity.
The emphasis on training should not be taken lightly either. Training, especially in the area of customer service, is often placed on the low end of priorities, especially when doing it on company time versus calling people in early. There is an ancient Chinese proverb that says, “If you want one year of prosperity, grow grain; If you want 10 years of prosperity, grow trees, but if you want 100 years of prosperity, grow people.” I think Starbucks is trying to grow people. More retailers should do the same, people are the company.
To remain effective, Starbucks’ training needs to be infinitely repeated on a frequent regular schedule. And like all retailers, especially quick serve restaurants, Starbucks needs to reduce its staff turnover. Training ROI declines as staff turnover rises.
I agree with Carlos–What A GREAT PUBLICITY TRICK! They could never buy this publicity again, and people who never even tasted Starbucks or couldn’t care less about coffee now know what they did yesterday.
Any time you get the name out there for good, it works! They made people think about the brand, about their customer service efforts, and that the company may actually care if things are done right. I don’t drink coffee, but I paid attention to this, and would probably venture in today if I am in the area of one just to see the mood and the feeling.
My inside source, a barista present at last evening’s meeting (my daughter!) praised the pep session as an opportunity to settle in and reconnect with staff’s inner gourmet. The rest of us see it as a genius PR move. We should all be so smart.
I must have had my head in the sand. I didn’t hear anything about all the Starbucks closings last night and attempted to buy gift cards at two different locations before realizing they were all closed. The first store had a sign taped to the drive through monitor stating they were closed for store training. The second one had a recording that came on saying they were closed but to please enjoy the Starbucks at any area Hy-Vee or Bakers.
I agree with Scanner–isn’t this about the brand? Aren’t grocery store Starbucks part of that brand?
I have yet to receive consistent service at Starbucks. While I’m not quiet about getting a grande fill in a venti cup, or that I ordered no foam or that my coffee is burnt–it does get annoying that I’m holding up the drive-through.
Starbucks is a great brand but they are experiencing growing pains. I think it was a great move to close and re-group. But let’s include ALL Starbucks.
Maybe one day all retailers will understand this basic concept of operating a business. INVESTING IN THE ONGOING TRAINING, DEVELOPMENT, AND MOTIVATION OF ASSOCIATES PAYS REAL DIVIDENDS!
I am most impressed with the fact Starbucks was willing to forego the revenues for this period of time to invest in the improvement of their people and business. Most retailers would schedule such training before the stores opened or after they closed. Starbucks chose to do the training when it was convenient for their associates. Yes, they got a lot of publicity for it but, the positive long-term impact on the operations of their stores will be worth even more.
While our industry has improved in recent years, we still have a long way to go in making a real investment in people. Starbucks took a great step last night. Maybe some other retailers will get the message?
A wise professor once taught me that, “An out-of-stock is a forced trial of a competitor’s product.” DD and the others were wise to capitalize on the shutdown and tempt the consumers.
Starbucks’ superior experience model will win the consumers back and keep them for the long term. The extra publicity from the event will make up for the lost sales.
I used to be a barista at a small home-town style coffee shop. It used to be known for having the best atmosphere in town and the worst coffee in town.
The management recognized some years ago that an improvement in the quality of the product would be beneficial to business and, after extensive research, invested in premium quality equipment as well as hosting an Intelligentsia espresso training workshop for all of the employees. The cafe was closed for four hours on a Sunday afternoon.
It’s true, not a single employee was a better barista at the end of the training session. However, the education accrued as a result was enough to inspire the employees (including myself) to really dig in to the art of making great coffee. Espresso takes patience and a hell of a lot of practice, but within months the majority of the baristas were making beautiful latte art (and the coffee tastes amazing). The cafe now sends employees to barista competitions regularly. The four hours that the establishment was closed didn’t create instant change. The benefit was in the passion that was inspired in each of the employees to actually think about and appreciate what they do.
Learning how to steam milk better and guaranteeing a great drink–does this mean the lines will be even longer?
Training is a great thing. However, this appears to be a reaction to a deficit in customer service that has finally hit the bottom line. Corporate is recognizing this and doing something about it. The question here is does it make a difference, or was it a costly mistake? Closing down your stores to do training is very unorthodox. Instead required videos, follow-up testing, newsletters, etc, might be more appropriate.
For these kinds of monies, Starbucks could have had their DMs trained, who then could have trained their store managers, who then could have trained their personnel and perhaps been more effective, more impactful at less of a cost. Only time will tell.
What I see Starbucks doing is something I’ve thought about for years. I think that, in most cases, they hire (mostly) entry-level folks, as do many other retail and restaurant businesses. What is refreshing to me is that they are taking the “unknowing newbies” and actually teaching them something about their jobs.
I know it may not seem like much of a big deal, but people coming out of school really don’t know a lot about the business world and the work ethics should require. Many businesses will hire someone and just throw them to the wolves (so to speak) with little or no real orientation. I say “no investment, no benefit” and hence, bad customer service.
Time, and time again, I read on this very website about how customer service is going down the tubes. Everyone laments the passing of good customer service and how the quality of employees has fallen through the floor. Yet, at the same time, here are the businesses that hire these folks at not much above minimum wage, who are new to the workforce, expecting them to become good workers with little or no training.
Look. If a company hires an inexperienced employee (knowingly), then I think they should take on the social responsibility to train them to be successful in their future careers. Not everyone will retire from their entry-level job. Some will actually become quite successful people. And believe-it-or-not, many times their first job experience will shape their future attitudes and ethics.
Starbucks (I hope) seems to understand this. I have no idea what was taught at their training session, but I would like to think that they intended to plant seeds to grow success. Most of those folks they trained will go on to do other things in the future. Wouldn’t it be wonderful if their first job actually started their brains thinking of the right ideas for success? What a refreshing breeze that would be to the stale retail/restaurant industry and the customers that are (at present) mostly victimized by them.
Just a thought.
Nothing.
No.
Positive publicity. Whether or not the time is effective to institute new training is beside the point. It was a message to the loyal consumer that Starbucks will never get too big, or too old, to make customer service a priority.
Great PR;
Great Employee Relations;
Great Training;
Just an overall GREAT message to employees and customers that we are going to give you a great product.
My first order of business this morning at 5 a.m., was to make my first trip to Starbucks, just the same as every morning, no matter where in the country I might be working on any given day! The employees were very upbeat today and told me that the meeting yesterday was informative and inspiring. One of the employees told me that he learned how to steam the milk better than ever before.
I don’t know how this could be a bad thing. Starbucks knows that its product is more than premium coffee and lattes. The Starbucks brand means quality, consistency, exceptional personalized service, and a certain atmosphere. No one does it better. The fact that they took a “time out” to huddle is a sign of a very well managed company and excellent brand management.
Here is what came out of the Starbucks closing yesterday. Great Publicity!!! First for Starbucks, and then for all of the competitors that took advantage of the closing to tout their own products.
Will the Starbucks employees be better trained? Probably not. Do the signs in the stores mean you will get a better cup of coffee? I doubt it. But it is a great way to emphasize that the customer always comes first. With Starbucks closing for three hours, they are indicating that customer satisfaction comes before revenues and profits. If anything, it serves as a message to their own employees to focus first on the customer.
Symbolic? Possibly. But a great publicity stunt which generated great press.
There is an old adage that says “You get what you talk about.” Starbucks did that in a big way yesterday. All of the efforts of their competitors to capitalize on the event did nothing more than reinforce Starbucks’ message. Imagine that–getting all of your competitors to help you!
Starbucks’ problems are clearly ubiquity, execution and consistency of experience. Starbucks can talk all they want about their baristas knowing coffee from the seed to the cup, but if they don’t serve it well, the cups won’t matter.
From my view, the entire event was an attempt to re-begin the conversation with their employees about the experience. Coffee is everywhere. The Starbucks experience isn’t everywhere. They know it and began what needs to be a daily conversation about it.
The most interesting thing I noted about it was that Starbucks did not include those locations in stores and other sites. They only included ‘their’ stores. With the amount of locations inside stores and other sites growing, I thought this was curious. My worst experiences with the Starbucks brand have been in these locations. Maybe you just feel different when you go to a specific standalone Starbucks. Who knows? From my view, it should have been all or nothing. I am sure they have their reasons, but it lacks sense. Maybe they have a different plan. Yet, even so, it leaves the consumer thinking that these locations don’t apply. They should. If it puts the Starbucks experience at risk, it should be addressed at all locations–standalone, or not.
Their task isn’t so much the conversation that they had last night. More importantly, is the conversation different today?
On a side note, a regional chain here–now known as Biggby’s, formerly known as Beaners–went free during this time period last night. Everything on their menu was free. It didn’t make me run to their store. They don’t pour the coffee. They hand you a cup and you pump it yourself for a premium price. That, in itself is a lesson in experience.
In about a month or so, it might be a great question when getting a cup at Starbucks to ask about the closing and the meetings. I wonder if any of the effect will linger? If they aren’t continuing the conversation today, it will have been for naught. I am guessing they will.
Consumers impressions will only change if they now have a good experience. It was a bold move to close for training and if service; quality of product and attitudes change because of it they will reap rewards. Consumers will give them another try but if they don’t perform, they’re done.
I was recently at a Starbucks and there was a long line. I waited for the person in front of me to order a “regular coffee” to hear that the coffee maker was broken and all they had was lattes and espressos. Instead of posting a notice at the back of the line or calling in the infantry, the workers just waited for the next person who had stood in line for 20 minutes wanting coffee to inform of the same. Not good business and only common sense. Hopefully, the training touched on common sense!
Bravo! At last a real manager. No one really thinks that three hours training is going to markedly improve the product. What the three hours of training will do is communicate to each and every employee exactly what ownership/management considers important.
The Starbucks environment seems to attract a lot of “unique” employees. It has been my experience that these people need to be focused. When focused, they can be extraordinarily productive. I believe the three hours spent reviewing what makes Starbucks “Starbucks” will bridge the culture gap that has occurred with rapid expansion. What is really important is that the time was devoted to helping every employee understand Starbucks. The competition will only realize a short term (3 hour) gain. The faithful will return and hopefully be more delighted than ever.
Think about it–did we ever hear about GM, Ford, Applebees, etc. actually devoting “production time” to improving the business?
Starbucks is training their employees to do what the business requires, and if they fail to please they will “make it right.” So I suppose that before yesterday there were incompetents making crappy coffee that I couldn’t return? My head hurts.
It all sounds good but in truth, if you get a bad drink, wouldn’t you complain anyway and get a new one? I love their caramel steamer and have yet to have it made the same way twice. Training is a great idea if the training program truly addresses the issues.
The rah-rah sessions usually help inspire workers for a short period of time. But as the days go by they soon realize that they are still working Starbucks and not on Wall Street. Then it’s back to Beavis and Butt-Head serving the masses coffee again.
Whenever I see that a product’s packaging features “New, improved taste!” I always assume that means that the company is admitting the taste sucked before.
Did Starbucks just admit that their lattes needed “a-latte” improvement? (Sorry, couldn’t resist….)
I agree with Joel. Starbucks reaped a huge amount of publicity yesterday. Taking time to rally their workers was a good idea. It reconfirmed management’s commitment to the workers and to consumers.
Yes, other coffee retailers took shots at Starbucks through clever promotions, but will those promotions drive long-term sales? I doubt it.
By reaffirming its commitment to its customers, Starbucks is positioning itself to stay on top of the coffee world.
I think the exercise was aimed more at the internal audience. After all, they had just taken down all those “Coming in X days…new sandwiches,” signs without ever seeing an actual sandwich; Howard Schultz had just taken over again and was clearly not happy with the direction the company was going; and, with all the media coverage and a flurry of competitive advertising, it was probably the perfect time to rally the troops.
This can be chalked up as probably the oddest thing done in customer service. Isn’t Starbucks having a cash flow issue? Does closing for 3 hours make any business sense?
Competitors jumped at this to gain new customers and more importantly, Starbucks customers! What could they have possibly done in 3 hours that couldn’t have been done after closing time? They say training but if that’s the case, customers will have a negative view of the brand from here on out.
Any place that has to close down to fix a problem has bigger problems than what they originally thought. All I can say is strange!
Retraining employees is fine, but doesn’t really fix many problems that Starbucks faces. Many Starbucks (at least in Chicago) are small (if not cramped) places; some even lack restrooms. The decor is bland and identical no matter where you are.
If you’re having your coffee in-house (rather than to go), you still get it in a paper cup, rather than in a real mug or cup & saucer like at Intelligentsia, Julius Meinl, Lavazza, Metropolis, Pause or any number of local cafes in Chicago. I suspect other cities have similar choices.
Then there’s that lingo and sheer high maintenance of some of the customers (who always seem to be in line in front of me).
Summary: Starbucks did very well bringing good coffee to the masses, but it doesn’t quite realize that it’s no longer the only game in town. Retraining employees seems to me to be more a morale booster for them than a reason for current customers to visit more often and former customers to try Starbucks again. Some have left for better ambiance elsewhere, some for better tasting coffee, some for faster service and some for better prices. What I’ve read about the retraining doesn’t really address any of these issues.
That’s why Starbucks remains my last choice for coffee. Viable choice. I still won’t drink coffee from McDonald’s, 7-Eleven or Dunkin’ Donuts.
I applaud Starbucks for taking bold, headline-grabbing action to bring their employees together for a mass training and group counseling session. Whatever revenues were lost were more than made up for by the media attention. It shows that their management cares about quality for without that “positioning” of their brand, they would be doomed…especially in a declining economy.
We are closing our stores for training. Why, because we haven’t properly trained them before…. Yeah, there’s a message.