How Starbucks Encourages Loyalty in its Coffee Drinkers

I thought that the Sandeep’s post about why he left Starbucks was timely because my wife (a long-time Starbucks barista) was recently telling me about her Starbucks’ initiatives to hold on to drip coffee drinkers (who, she says, the company values very highly because of the frequency with which they visit). So, here’s another perspective on what Starbucks is doing for its drip coffee drinkers – this time from the other side of the bar :) Some of what Sandra told me addresses issues Sandeep raised, other parts seemed to address other issues.

Sandra mentioned that the wait time while coffee brews is a known issue. She said that Starbucks has determined that coffee is only fresh for half an hour after it’s brewed (it used to be an hour, but someone at Starbucks decided that an hour was too long to let coffee sit). That means that for four minutes or so out of every half hour, the coffee is brewing. She said that Starbucks has tried a couple of approaches to ease that pain. She said that in busier stores there are now two brewers for their new Pike Place Roast (more on this extra-special coffee later), that way it’s never out. Also, she said that it’s common for baristas to offer customers americanos instead of drip coffees (at the drip coffee price) when the customers have to wait, or to charge the customer for a size-smaller cup when the coffee is finally ready. And, in some cases, when people have expressed that they’re not able to wait the several minutes necessary for brewing, baristas can give out free drink coupons as way of apology. Also, Sandra said that with regular customers, a common apology is to offer a free refill on the coffee later in the day. (the idea of reaching out specifically to regular customers made me think about our recent marketing class discussions related to CLV). Overall, she agreed that the frequent brewing was bad, but emphasized that it was necessary given Starbucks’s commitment to providing high-quality coffee.

Another thing Sandra said about drip coffee drinkers (as indicated above) is that they tend to be repeat visitors (even within a day). Because of this, she said that Starbucks has tried to embrace drip coffee drinkers by offering a free refill with every coffee purchase to customers who are registered Starbucks card holders. (This made me think of our marketing class again because Starbucks is able to track the behavior of customers with registered Starbucks cards in much more detail, which helps with their customer analysis). The details of how the refill work are up to the store manager, but because Sandra’s store is in an office building, she said that they let customers come get their refill later in the day. She said that her customers really appreciate that.

The other issue that Sandra said drip coffee drinkers have raised a lot in the past is the issue of not having a predictable coffee available. She said that since Starbucks serves different coffees each week, there was some feedback that it was difficult for customers to know what to expect when they came to order their coffee. In particular, some customers who liked cream and sugar in their coffee found that some weeks the coffees available didn’t go well with cream and sugar. It’s to address this concern of predictability that the new Pike Place Roast has been introduced. Sandra said that this new coffee blend was developed specifically to be a coffee that a lot of people could agree on. It’s a medium coffee that is supposed to taste good with or without cream and sugar. Now at Starbucks’s, there will always be these three varieties of coffee available: Pike Place Roast, Pike Place Decaf, and one rotating bold coffee (since many customers associate Starbucks with bold coffee and Pike Place is medium). She said that the hope is that this can enable people to know what to expect when they go for their morning coffee. Also, as mentioned above, with Pike Place Roast being a popular coffee, some stores are able to have two brewers of it so that it’s never out.

So, there’s the perspective of a very loyal Starbucks employee of what they’re doing to keep attrition low in their drip coffee drinkers. I suppose time will tell if it’s enough to offset the offenses mentioned by Sandeep. Though I think Sandra is curious whether you’ve tried the Pike Place Roast, Sandeep, and whether it was mild enough for your tastes.

Oh, and regarding the lukewarm coffee, Sandra was aghast at that. She said it should never have happened and that you shouldn’t have had to pay for it. She mentioned that the recent ‘all stores closed for training’ event was, in part, to try make sure that all the baristas were well trained in the basics like this.

And though I forgot to ask about the increasing coffee prices, I do know that she’s told me before that Bellevue has a ‘latte tax’ (not sure if it applies to drip coffee or not). She said it’s part of the city’s effort to tax luxuries (though I like to kid her by calling it a sin tax :))