Starbucks’ challenge of meeting customer expectations could be achieved through Christine Day’s proposal to invest $40 million annually in labor in the company’s 4,500 stores. Relaxed labor controls would allow for 20 additional hours of labor for each store per week. Therefore, customer satisfaction could be improved through the increased speed of service.
Although Customer Snapshot scores were relatively high, the market research team discovered that Starbucks was not meeting customer expectations and needed a new method for analyzing customer satisfaction. To eliminate this listening gap, PG1, they polled customers to adequately assess how they could increase customers’ feeling of being valued. Starbucks realized that convenience and speed of service were particularly important to their customers. Thus, increased labor hours per store would greatly aid in minimizing this ...view middle of the document...
The goal of having customers only wait in line for 3 minutes was the proper plan of action to close PG2. The $40 million invested in labor hours, therefore, was not an expense but a customer-oriented investment.
The underlying contradiction between Starbucks’ two goals of customer intimacy and speed of service created a tensioned environment for baristas. Due to the increased complexity of beverages, which could have over 100 combinations, baristas were under more pressure to serve high volumes of customers while also satisfying customization requests and maintaining friendly demeanors. The company’s promise of customer intimacy could not be properly achieved, which was the main reason for the communication gap, PG4. However, with more labor hours, baristas would be under less pressure and could focus more on quality of beverages and customer service. By devoting more time to customization and recognizing loyal customers and their orders, baristas would help their customers feel more valued by Starbucks. As exemplified by Figure A, the company’s largest revenue came from their most loyal customers, who averaged 18 visits per month. Starbucks should have focused on retaining the business of these customers while also increasing the percentage of customers who visited 8+ times per month. By increasing the speed of service, large quantities of customers could be served with more efficiency and could become more satisfied by the consistency and convenience of the service. Faster service of high volumes of customers could achieve more sales in less time. From a profitability standpoint, the customer-oriented investment would greatly increase revenue and customer satisfaction.
The ineffective market research, shift in customer trends, and contradiction between speed of service and customer intimacy all worked to create provider gaps. These gaps in customer expectations, design and standards, and communication could be eliminated by a $40 investment in relaxed labor regulations that would increase customer satisfaction in service quality.