A good product alone can never guarantee the success of a business – a first class customer experience will forge a customer and business bond that will undoubtedly result in customer loyalty. Starbucks is one of the finest examples and has a coffee chain that has already established itself with one of the world’s largest and most recognized brand names on the market. It has gone from a small coffee house in Seattle to millions of customers around the world.

The success of Starbucks can be attributed directly to customer experience, loyalty, innovation and consistently delivered brand values and represents a model in how to successfully lead a business on a global scale. There are several business lessons that entrepreneurs and business leaders can take away from this success story which will be of use on an entrepreneurial journey.

The Early Beginnings of Starbucks

Starbucks was founded as a seller of quality coffee beans and equipment in Seattle, 1971. This coffee business took on a completely new direction in 1980 when it was bought out by Howard Schultz. On a trip to Italy, Schultz had witnessed the café culture and experienced the world of Italian coffee bars, and came up with the idea of bringing it to the United States. The idea of Schultz went way beyond a typical coffee store, “The company intended to create an ‘atmosphere of hospitality’ and provide a ‘third place'”. The company planned to offer customers premium coffee and an enjoyable and relaxing experience.

Creating the “Third Place” Experience

This ‘third place’ concept has to be one of the core reasons for the success of Starbucks. Most people have two principal environments where they spend most of their lives- their homes and their place of work. Schultz had set out to create a neutral territory, where people would be encouraged to have conversations with friends and have a good catch-up with people they cared about or even get some work done if they wished. To facilitate this Starbucks invested heavily in comfortable store surroundings such as comfortable seating, pleasant aesthetics, calming background music and staff who served a quality product and provided a positive and approachable manner when dealing with customers, resulting in the habitforming culture and customer loyalty that is Starbucks today. Businesses today need to recognize that quality is of paramount importance to the customer experience.

Focusing on Premium Quality

Starbucks is all about quality, sourcing its premium beans and maintaining stringent quality standards throughout the entire operation. Through high quality standards, Starbucks can guarantee that every cup served will taste the same whether it has been purchased in Seattle or Singapore, building trust and repeat customers time and time again.

Building a Strong Brand Identity

Starbucks has by far one of the most instantly recognizable brand names on the market, right through from the logo, to the stores, to the packaging of its products and in doing so, has established itself with the universal consumer yet also the individual. Creating a positive brand and a unique brand image will allow a connection with customers and foster an emotional bond with brand value.

Personalizing the Customer Experience

One element of the success of Starbucks is that every single customer is treated as an individual and this is clearly reflected in the name being written on the cup and customers being asked for their usual order if applicable.

The Success of the Starbucks Rewards Program

The customer loyalty program was launched to foster and build on relationships and ensure that a loyal customer keeps coming back for more, earning loyalty points which are redeemable for any available products and gifts. It also allows Starbucks access to a large database about consumer buying habits.

Embracing Technology and Innovation

Starbucks has consistently adopted technology to make things more convenient for its customers and make the customer experience better. The company has adopted:

• Mobile ordering contactless payments
• Digital rewards
• Personalized promotions

Mobile app integrationIts app was rated as one of the most successful retail apps in the world, enabling customers to order ahead, collect rewards and pay for products. It benefited from early adoption of technology which also helped streamline its operations and make its customer’s life easier.

Going Global but maintaining local identity

While taking the business globally, it has been vital that they maintain their brand image yet also preserve the local identity of the location of their store. The use of locally produced produce on their menus and having stores adapted to fit into local environments has contributed to their ability to appeal to a world audience.

Responding to Challenges and Market Changes

While they are undoubtedly a very successful business, Starbucks has suffered from economic recession as well as the global market proving to be very demanding and competitive. To maintain its position they have been willing to constantly adapt their strategy, focus on enhancing the customer experience through new product offerings, emphasize sustainability and community responsibility and adopt new technology.

Key Lessons from the Starbucks Growth Story

The success of Starbucks is a clear indicator and guide to businesses around the world in establishing a successful long-term business.

• Customer experience is essential
• Branding is extremely important
• Quality product must come first
• Reward loyalty with rewards programs and incentives
• Be open to innovation with technology
• Treat each customer as an individual

Businesses must be willing to adapt to new trends and market changes.

Conclusion

Starbucks’ rise shows that the only way to create the kind of business that truly succeeds is to focus not on what is sold but by providing outstanding experiences to customers, outstanding brands to create unique products for customers, unique high-quality products and personalized service for loyal customers and providing a continued flow of innovative new and unique ideas that lead to repeat business with customers. Entrepreneurs, business leaders and visionaries need to recognize that building a great and enduring business today depends far more on cultivating satisfying customer experiences and lasting relationships with customers rather than focusing on the kind of service a business sells.