Imagine running the largest ever coffeehouse in the world! It must be thrilling, challenging, and daunting. Yet, granted, this is an honor that few of us could turn down. Without a doubt, it would be a chance in a lifetime.
Does this sound too good? For Howard Shultz, the co-founder and CEO of Starbucks, this is a pleasant reality; today, he runs a coffee brand that is hailed as America’s fastest-growing. Moreover, Starbucks is widely touted as the world’s best of the best.
Yes, without question, Starbucks is a unique brand whose story sounds just like a well-crafted fairy tale. Are there lessons that the world’s businesses can learn from the runaway success story that is Starbucks? How does the story go?
Starbucks: World’s Largest Coffeehouse
Flashback to the year 1971. A new coffeehouse opens in the historic Pike Place Market in Seattle. The enterprise was quickly named after Starbucks, who was the first companion of Captain Ahab in Moby-Dick. This small cafe eventually became the world’s largest coffeehouse.
Indeed, Starbucks is today reckoned among America’s fastest-growing companies. Remarkably, the coffeehouse owns over 21,000 stores spread out in 65 countries.
The company’s stores skyrocketed impressively from just 425 stores in 1994 to more than 19,767 by 2013. Going by these trends, the phenomenal growth of Starbucks is projected to continue in 2020 and beyond. How did this brand achieve such remarkable growth? More important, as a café owner, what lessons can you draw from the success of this world-renowned business?
1. Be Innovative
Notably, the Starbucks Company does everything to retain its roots. Moreover, it is incredibly innovative. For instance, realizing that most customers wished to spend more time at its establishments, Starbucks introduced free Wi-Fi in its stores way back in 2010.
Further, realizing that the customers craved for its products at home, Starbucks swiftly introduced instant coffee with its Via instant-coffee brand using the single-serve brewing systems courtesy of the Verismo machines.
The company went further to allow customers to pay for services with an iPhone app. Indeed, Starbucks was one of the first-ever companies in America to go fully mobile, back in the days.
The lesson? While it is okay to stay true to your roots, always be adaptable and ready to welcome change.
2. Pick the Right Partners
Starbucks has, over the years, entered into strategic partnerships with several companies in a bid to expand its business. In 1993, for instance, the company got into partnership with Barnes & Noble.
The plan would help Starbucks to serve its brands nationwide at the bookstores. Think of it: Is there anything better than having a book in one hand and a good cup of coffee in the other? Talk of a masterful strategy!
More recently, Starbucks also partnered with Apple. In this plan, Starbucks and Apple joined together to offer customers a unique “coffeehouse experience.” This exclusive partnership allowed customers to purchase songs that they had heard in Starbucks, on iTunes.
The coffeehouse also partners with several organizations that serve to advance community interests. Among these is Global Green USA, Save the Children and the American Red Cross.
Lesson? Whether you decide to team up with some non-profit or complementary businesses, this is a beautiful way to introduce your products to new markets, quite effectively and quickly.
3. Know Your Customers and Employees
If you are a regular visitor at Starbucks, you are likely aware that your favorite barista actually knows your name and order. How important is this little personal touch? Yes, it gives the customers a memorable experience. This is among the most important triggers that you can use to make customers really happy in your establishment.
Moreover, it is essential to know all your employees personally. You just never know what it is that they can bring over, in the fullness of time, to the table. For example, the famous signature Frappuccino was invented by Dina Campion, who is a Starbucks line employee.
4. Question Customers
Have you ever visited a Starbucks? You will admit that this is not your regular, ordinary coffeehouse. You probably noticed that, sometimes, the employees would ask you what you are looking for. This simple but effective technique works wonders with customer service.
Indeed, this is one practical strategy that every marketer who wishes to succeed must utilize. And it works on a straightforward premise: When you know precisely what your patrons are looking for, you can quickly help them make a decision.
5. Have a Mission
What is the mission of Starbucks? It is deceptively simple: To progressively inspire and nurture the human spirit, step-by-step: one person, one cup, one neighborhood. Yes, one at a time.
This mission statement has served the company quite well for more than forty years. Why? The reason is: Starbucks is much more than just a coffeehouse.
The business has, over time, become a popular escape point for all people who need to break away from the daily grind. Indeed, it has turned into a centralized meeting place- rendezvous-for friends who wish to catch up and business people who want to have meetings in a serene location.
The Starbucks establishment wanted to give people—without regard to age, location or profession– an extraordinary experience. The coffeehouse would serve as a place to relax, socialize, and work.
6. Take Responsibility
Have you ever got an order wrong at Starbucks? What happened? Of course, you got your right order, in the end, without question. Here, the employees are all trained to deliver an excellent experience for their customers; this must be done every single time.
Lesson: You should learn to take responsibility for whatever slip-ups that happen in your charge.
Of course, we all make mistakes multiple times. What makes the difference is when someone graciously owns up to these mistakes and addresses them professionally on time. Go ahead and adopt this.
7. Swim Against the Tide
You probably have noticed that there is a Starbucks store on just about every corner. This is a smart, deliberate move by Starbucks. It is known as clustering. Rather than focus on traffic patterns, demographics, or competitive location, Starbucks covers entire areas.
While there were initial fears that this strategy would lead to self-cannibalization, this unusual move has helped the coffeehouse to maintain its market dominance by merely blocking out the competition.
Lesson? It is necessary, sometimes, to swim against the tide, brave it and do something that other businesses are not doing. It might be risky, but, eventually, it can lead to significant benefits that few are enjoying.
As a café owner, don’t focus only on profits. Running a successful cafe business means more than having a fat bank balance. We have discussed the remarkable story of Starbucks and the factors that make the giant enterprise tick. Did the business ever experience upheaval? How was this dealt with?
Incredibly, back in 2007, Starbucks experienced trouble. Howard Schultz, the chairman, noted that the company was slowly losing direction. As he stated, the pursuit of profit had become the overriding factor. The CEO did not believe that Starbucks was solely in business for that reason. Instead, he made it clear that the coffeehouse was primarily in the business of meeting customer expectations and exceeding these.
What remedial measures did Schultz take? He quickly arranged to take all the 10,000 managers to New Orleans. Here, a four-day conference was held to inspire and challenge Starbucks ‘ employees. What was the result? All the 10,000 managers left the New Orleans conference bursting with a new tidal wave of energy. Just six years later, in 2013, Starbucks started recording massive, unprecedented profits.
Lesson? As a leader, always rally your troops in the right direction. The effect, in terms of business success, will be excellent!