Wednesday, February 27, 2008

Closed for training... differing perspectives on Starbucks

Starbucks decision to close over 7000 company-owned USA locations for several hours on the evening of February 26th in order to implement training in customer service and the making of their varied coffee drinks has caught the eye of new outlets... and understandably so. Starbucks reports that some 135,000 baristas were on the receiving end of the training effort.

Two viewpoints

1) The "How could Starbucks afford to do it?" perspective
.....Those with this point-of-view focus on a range of variables including the:

  • lost sales during the closure
  • "unproductive wages" (just consider the 400,000+ hours of barista training)
  • opportunities for competitors to access Starbucks' customers (for example, Dunkin' Donuts offered heavily discounted lattes, espressos and cappuccinos during this Starbucks evening training)
  • attention on negative issues at Starbucks given through media coverage of the training event

2) The "How could Starbucks NOT afford to do it?"
.. ..Those with this viewpoint -- and it seems to be a somewhat lonely place judging from what is currently read or heard -- wonder, even considering the possible negatives listed in #1 above, why wouldn't an organization be willing to take unconventional measures to refocus on its customers, if such methods were deemed productive?

Comparing the two sides
While those in the "how could they" camp focus on short-term negative outcomes that might result from this event, they seem to not consider the longer term negatives if Starbucks does not do something significant to counter some disturbing trends impacting their customers. One question begging to be asked is: "How much would continuing such current practices impact their profits if left unchanged". Two such practices that Starbucks reportedly focused on Tuesday night were in the areas of: (A) coffee drinks that are not prepared up to "Starbucks standards" and (B) not offering the desired consistent customer service that was a hallmark of the chain in earlier years but had been slumping recently.

Lift your cup high
Although Tuesday's closure of their locations surely had some short term negative consequences, let's hope that Starbucks customers lift their venti lattes (or espressos or macchiatos or whatever) high to toast the Starbucks management for their willingness to take a bold (and expensive) step to get the shops back to where they felt they needed to be. It will be interesting if Starbucks' customers taste and experience a difference (and for how long).

Tuesday, February 12, 2008

McDonald's: Please do coffee right this time!

In an early 2007 Consumer Reports coffee taste test, coffee drinkers preferred McDonald's Premium Roast over blends of Starbucks, Dunkin Donuts and Burger King.

Currently, the local McDonald's are in the midst of reconfiguring their front counters to accommodate the fast food firm's move into expanded coffee shop offerings.

No options
Even though they have had a nice tasting product for over a year, McDonald's chose to maintain their fast food heritage regarding their coffee. Even though promoting their coffee as a premium beverage in a redesigned cup, McDonald's failed to offer customers any choices of creamers. Instead of a selection of milks -- cream, whole, 2%, non-fat, soy, etc. -- and flavorings, McDonald's has limited coffee drinkers to a single type of coffee cream in "mini moos" (the miniature creamer "buckets" topped with foil -- see the picture above).

To be fair, McDonald's coffee drinkers could have a wider selection of creamers (2% or non-fat)... if they bought a small carton of milk with their cup of Premium Roast!

Jump, don't just stick your toes in
McDonald's seems to have the coffee that satisfies the palate. Here's hoping they realize it is more than just the coffee. Since McDonald's is entering the coffee market with more gusto, it would be beneficial to remember that up-market coffee is not viewed as a commodity and that even variables seemingly as small as coffee condiments impact consumer perception.