Reputation Management: Starbucks Offers A Simple Lesson In Good Customer Service

Published by 47 Comments

I was traveling around Queen Street West in downtown Toronto this week and as always I popped into a Chapters bookshop (like a Borders). In Canada most bookshops have either a Starbucks or a Second Cup coffee shop. Many of the posts in this blog were created in cafes inside bookshops around the world.

I ordered a tea and an oat brownie from Starbucks. The brownie was delivered instantly, but the tea wasn’t, so I walked over to the delivery end of the cafe and waited.

The customers just before me received their order and I expected mine next. The customers who ordered after me then walked up and collected their coffees. Then the next customer. Clearly my tea wasn’t coming.

I walked back around to the cashier section and spoke to the barista who took my order. He immediately realized that he had forgotten about the tea and in two seconds flat, made my tea and then blurted out something about a free tea and handed me a piece of cardboard that looked like this –

Starbucks Free Tea

In case you can’t read the print, here’s the bit that matters…

Starbucks Free Tea Fine print

Besides the funky design of this free beverage voucher, there’s nothing too groundbreaking about offering something for free when you don’t get good service, but let’s look at this a little deeper.

I waited about an extra minute longer for my tea than I should have. That is definitely not long enough for me to get angry and I was served very quickly once I notified them that my tea was missing.

Yet, despite this, the Starbucks policy is to offer a complimentary beverage even if their system is slightly out of whack. I walked away impressed that I scored a free beverage voucher, but not really because of the beverage itself, I was impressed with the customer service policy I just witnessed (hence I’m writing a blog post about it!).

Starbucks did not diminish in my eyes as a result of this incident. In fact they impressed me, so much so that I’m now writing a blog post that will be read by thousands of people proclaiming good things about Starbucks service (that’s some good word of mouth). Of course not every Starbucks customer has a blog they can rave to when something happens, but every person has friends and people they talk to, and this one policy of Starbucks will encourage word of mouth through normal social interaction too.

Standing Out In A Crowded Marketplace

Starbucks free beverage policy is just one example of how a business can rise above the crowd and go from average to good or even great. They do the little things better and they do them often enough that people notice.

The combined word of mouth of thousands of little positive anecdotes about a business circulating around society can add up to one powerful force of good will and positive branding. No advertising campaign can rival the impact of a good reputation and a good brand spread organically, born from a superior product delivered with superior customer service.

Most coffee shops, given the situation I experienced, would not have offered a free beverage. Sure, I would have received an apology and my tea promptly delivered, but the extra step of the free beverage is not standard practice for a one-minute late tea.

Some coffee shops can’t justify the expenditure of offering a freebie for every tiny mistake made by staff. Perhaps they can’t or just don’t train their baristas according to a well documented system or don’t take care when hiring staff to locate good people. As a result, staff mistakes are more common and thus it’s not realistic to offer compensation for tiny errors.

Of course Starbucks understands that the cost of giving away a few beverages is far less than the benefits gained in brand perception and positive word of mouth as a result of above average customer service. Sadly many small businesses owners don’t see the connection between good customer service and it’s impact on future sales, they only see the cost incurred today for giving away something for nothing or taking extra time and resources to train staff and build a system.

Reputation Management Through Customer Service

The real marketing trenches for companies is the “battle field” of customer service. Your best opportunity to make an impression is during direct contact with the people interacting with your product or service and spending their hard earned money for the right to do so. The point of consumption is your chance to truly shine, or the opposite, to completely destroy what good reputation you have.

Unfortunately one unhappy customer is likely to do as much damage as ten happy customers can do good, so you need to get this right a lot more than you get it wrong just to keep your reputation stable. If you want to go beyond the average and stand out from the crowd, you need to repeatedly impress your customers in many ways that your competition do not.

The lesson here for us is to find ways to look at the customer service function of our business as a huge opportunity to stand out from the crowd and create evangelists.

In the Internet business world, simply responding to email queries promptly is one thing we can do that still manages to impress people, because other companies do not do it. We can take a lesson from Starbucks and offer refunds, discounts and freebies whenever our system breaks down.

The key is to do more than whatever the market currently expects. Perception, as always, plays a huge role. While you might think responding to email queries personally is just common courtesy, people have come to expect poor service online especially when it comes to email communication and thus simply being readily available makes you look good.

In some markets though, you need to innovate and think of new and better ways to do things because existing businesses in the industry have already raised the standards high. As a business strategy you can look at how companies that perform at the top of similar industries to your own operate, and replicate their systems in your market as a means to establish competitive advantage.

Long Term Thinking

Reputation management is not something you feel the effects of immediately. It can take a while for a bad reputation to hit your bottom line, or a good one to increase profits. What’s important is you think about this as a long term business strategy built upon the hundreds of little things you can do right on a daily basis.

I believe customer service represents one of, if not the best opportunity for business to foster a good reputation, which can translate into a powerful and natural force of viral marketing.

Nothing is better for a business than a very satisfied customer – one so satisfied they are compelled to talk to other people about their experiences with your service, using a completely natural dialog. This outcome can be a daily event and it can happen to hundreds or even thousands of your customers, if you have a system that creates unusually satisfying experiences because you find ways to be better than what people perceive as good.

Think about all the little things you can do to impress your customers today so that tomorrow your brand perception is so good, you enjoy a competitive advantage because of how people think, feel and talk about your business.

Yaro Starak
Reputation Manager

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47 Comments

  • Hi,
    The takeaway is ‘responding faster to correct mistakes’ is not it? I am whelmed by the gesture of the starbucks crew, whereas we can’t expect anything like that but even may get a scold back in this part of the world :)

    Regards,
    Ajith
    PS:- I accidentally hit this site, will bookmark now

  • Reputation Management: Starbucks Offers A Simple Lesson In Good Customer Service should be a real eye opener for anyone new to marketing. To many people concentrate on the immediate sale and yell, “Next!” Not me and certainly not Starbucks.

    My ultimate goal is to create a long-term customer even if that means giving product away for free…

  • I love hearing about great customer service because that is the one thing that really gets on my nerves. It is good to hear the big names being known for customer service.

  • That free cup of tea probably sold another 100 Starbucks beverages from this blog post… is good customer service critical… absolutely YES !!

    Cheers Ian
    Getting Ahead In Life

  • This same thing happened to me! I think it is excellent customer service!

  • In the blogosphere we give away free stuff all the time. So I guess for bloggers it’s more about responding to email and comments.

    • Yes – Replying to comments and responding to emails definitely counts (it’s hard enough to keep up with that!), but what would be even better is finding ways to do more than that so you really stand out.

      One such way I can think of off the top of my head is going and leaving a comment on the blog of each person who leaves a comment on yours to really cement the relationship.

      • But then it would need to be some useful comment to an actual topic. Not just some “thank you”-note.
        And that would take A LOT OF time to do.
        I think this time is better invested in useful and interesting new posts that bring in new readers.

  • I had someone email today through one of my blogs just to say how much they liked it, and they admitted they were surprised that I responded so quickly, and that I was so friendly.

    It’s sad that people have come to expect less-than stellar service in the sometimes impersonal world of the internet, so I love it when I can surprise people with friendly communication.

    It also reminds me of the HORRIBLE service I had at a Booster Juice at the mall one time. The lack of respect and professionalism shown by the staff reflects on the company in general, so it’s extremely important to choose the right people when they are helping you represent your business. After that little episode I had at Booster Juice, I think I’ll be walking to the other end of the mall and going to Starbucks instead.

  • Yaro,

    Happy to hear a top notch company still taking care of its customer well.

    IMO, the most impressive thing is not the voucher itself, but the quickness to respond to your ‘problem’ – without question.

    Cheers, Yaro!

  • Ang

    And don’t forget Yaro, when you come back to have that free tea (which costs them nothing), you are probably going to buy another oat brownie to go with it, right?

    Giving stuff away for free generally makes that customer buy more at the same time, even if its because they feel obliged! Awesome!

    • True – good points Ang – though maybe not the oat brownie, I’m not a big fan of it :-)

  • I read a similar story somewhere..its about a Walmart guy..(probably in Good To Great book)

    There’s a guy in one of the Walmart stores who who used to print friendly quotes (though, not original) in the form of short slips and then he used to add those slips to everyone’s bag at the register.

    Just this one act used to get him the longest queue of customers at walmart who always wanted to get billed by the same guy because they started feeling some connection with that guy..

    Morale of the story – just do one small thing extra that shows your customers that you “really” care…and they will love you and send you their money happily.

    Thanks for the great post mate..

    Redgs,
    Deep

  • Hi, Yaro!

    Like you, I’m amazed at how the barista handled the situation about your missing tea. Not only did he act promptly to correct it and offered you a free beverage, but also he handed out to you their free beverage voucher. Other customer reps would try to hide the mistake and cover it up.

    This is indeed worth a WOMMA. So, I’m sharing your story with my readers, too. Thanks! :)

  • Yaro, we have got almost the same shit in our (me and my girlfriend) favourite Japan restourant in Moscow called Tanuki. They have got smth like free fruit tea when you visit them. The problem is that in 15-20% cases they forget to bring you this tea when you are waiting for your order. In that cases I always say, “Sorry, is your programm with free fruit tea over?”.
    Of couse, at that second they are veeeeery sorry, thay are climbing in my legs and etc.
    But the problem is not over. She brings us empty cups…and now we start to wait for a special man with a big Japan kettle that is walking through the room and giving tea. Well, it is pretty seldom when he come in first 10-15 minutes, damn!
    What a damn service!

    • In addition to my post, specialist advice to wait no longer than 20-25 minutes for your order and that leave the caffe/restaurant. Am I right, Reputation Manager Yaro Starak?)))

  • This is a great example that anyone that follow a principle that works will have the same result. Can you imagine how that little shop scored a great point by offering something to show the customer’s that they prefer his trust to the money he is willing to spend NOW!

    I wonder if they would have been able to cough out the cost of having a review on Yaro’s blog. But with a promise of a free cup of tea, they made him write passionately such that if I ever find myself in that locality, I will love to patronise them, just because I feel the management of that shop knows how to treat a customer.

    Thanks Yaro for sharing this. Like you pointed out, I have been trying to ensure that I respond to enquiries as fast as I can and I make my response personal so that the recipient will know they are dealing with a human being not a robot ;-)

    Once again, thanks for the tips.

  • Doesn’t Starbucks serve their tea and coffee in cardboard cups? Am I wrong here? Does anyone actually drink that stuff?

    • They do, but the cups are lined with industrial grade coating which does not dissolve in hot temperatures but is organic and biodegradable. It is strong enough to make the paper cup leakproof, but the good thing about it is that the coating does not end up in your drink.

  • This is a very practical example of the importance of aiming at gaining customer trust rather than trying to pick their pockets or purse ;-)

    I am almost certain that the management of Starbuck never thought of placing an advert on Yaro’s blog. Yet, their little act of thoughtfulness and the little sacrifice have given them a REVIEW that may be worth thousand of dollars in future sales.

    You can be rest assured that I will love to visit that particular shop if I find myself in the locality, not because they are the best, but just because of Yaro’s testimony that they know how to treat customers. I think this is an advance COURSE MATERIAL IN MARKETING! :-)

  • Hi Yaro,

    5 Traits You Cannot Teach In Customer Service

    There are some character traits that cannot be taught in Customer Service..
    If we could, we would because it would make the whole world a better place, not just Customer Service. We can’t, therefore we work with people whom we believe to most exemplify these traits. Here are 5 you cannot teach.

    1. Enthusiasm.
    2. Happiness
    3. Commitment
    4. Belief
    5. Attitude

    If you are trying to teach one of these to your personnel in the hope that they will morph in Customer Service Professionals, forget it. You have a better chance of seeing Santa Claus, The Tooth Fairy and The Easter Bunny playing ball on your front lawn one morning.

    Regards
    Amit

    Successful Entrepreneur

    • I agree that you can not teach them these things. Nothing however stops you from developing these traits in them by, proper recruitment, on the job training, the proper environment and support, review and ongoing mentoring.

  • Above, I saw that Evan was wondering how this applies to blogging. Here’s one way to stand out:

    Reply to comments by e-mail. WordPress has a function where you can have it e-mail you all of your comments. Then you can just click “Reply” and fire them off a quick e-mail.

    You don’t have to respond in depth. Often times, just thanking them for commenting and continuing to read your blog will blow people’s minds.

    It’s a lot of work, but if you’re just starting a blog, building a relationship with those first few readers is essential. Taking a few minutes every day to respond to them directly is a good investment of your time.

    • There was actually a discussion on Twitter yesterday about that very thing. In the end, the commenter who received the email reply from the blogger, decided NOT to join the community and also decided she didn’t want to return and comment on future posts because she was afraid of receiving even more email.

      Not on anyone’s side here…just throwing that out there.

      Some people are turned off by the blogger emailing them “thank-you’s” for commenting.

      • That’s an interesting point. I guess it depends how the email is phrased. If it appears like auto-matic spam reply, then they might be put-off.

        If the email is original and seems unique – like referring to something said in the comment, then I can’t see how that could scare the person away.

        It’s the appearance of spam or email marketing that scares people off.

  • I absolutely love starbucks but the last two times I went they gave me sour milk in my latte. And no, i didnt get any cardboard for a free drink.

  • out here in romania if something like that happened, you would be charged for another cup of tea..

  • Max

    Yaro
    First of all, thank you very much for the great site!
    Regarding Starbucks – Please do not see me as a very cynical person, but for the price they charge us per cup (comparing to other coffee shops), you would expect exceptional customer service. Unfortunately it is not always a case. Of course I realise that we are dealing with people here – all of them have their own lives, mood ups and downs, etc.
    In relation to the blogging – will everybody ALWAYS keep the same level of customer service regardless of what is on your mind? I think it is pretty difficult – we are all human.
    Bottom line – let’s praise people for great customer service and forgive those who are not their yet.
    Again, thank you for your site.
    Max

  • They really made themselves remarkable, and now you are sharing you experience with others building their band further. Great story and example.

  • Starbucks will do this again and again and that is why they are where they are. There are any number of smaller businesses and individuals who extend similar service and establish such strong bonds with their customers/clients that quietly and unnoticed they make good living and enjoy great reputations in their communities.

    I have often felt that perhaps this is something that is inborn but I am given to understand that with proper training even small businesses and individuals can be made to become like this. Unfortunately, most do not believe that it is necessary and miss out on very rewarding lives.

  • The fact of getting the voucher on free beverage is not quite suprising. I think that it is quite right to smooth the situation appeared by this small gift. Starbuck is a perfect example of good customer service. If they keep it the number of clients will be immensely increased

  • [...] a recent post on Entrepreneurs Journey, Yaro Starak wrote about “Reputation Management.” I encourage you to read it, and although I like the term, his article title really translates (at [...]

  • This is commendable about Starbucks. Thankfully there are a few other classy businesses who understand customer service and know how to tastefully handle a fumble.

    I’m more surprised by businesses that have terrible, sometimes even horrendous customer service and still prosper.

  • Having the POLICY of excellent customer services is the easy part. I would guess that every company would clain to have that policy. Getting employees to FOLLOW THE POLICY is the difficult part.

  • As a once upon a time barista at Starbucks I can confirm the commitment that this company makes to their customers, and customer service. It is company policy that a customer shouldn’t have to wait more than three minutes to get their drink. This is from the moment that the customer enters the door. Our first response to a customer who said that their drink was wrong or didn’t taste the right way was to offer to make them a new one. As my manager explained when I was hired each espresso drink only costs Starbucks pennies so tossing a mistake and serving a new one wasn’t going to bite into profits. The most important thing was for the customer to go away feeling that we had given them exceptional service.

    • That is true. I was a barista, too ,and one of the most valuable lessons that a beginner in the industry will learn is that it only costs a penny to make a new shot of espresso and a couple more cents to steam a new pitcher of fresh milk. When you put the shot and the milk in the cup, it becomes your 6 dollar drink, so I guess Starbucks is in no position to mess it up for you, not because they charge an arm for a drink that could cost way less if you do it at home or buy it from another store. but because they value customers so much that it is literally the heart of the business. Although now that Yaro mentioned reputation, I remember reading in the Starbucks training manual that studies show that good word of mouth travels fast and hit, say 10 people and the craze stops. Something bad happens and the person tells 10 people who will 10 other people and so on and so forth.

  • Hi,

    Think this is a great article.
    Although the immediate thought that strikes me is how good customer service can help enhances the company’s branding and build customer relationships, on further pondering I feel that the gesture of giving out freebies to customers for slip-ups contributes more to the marketing aspect of the business (besides the customer service aspect).

    Though freebies are a really good way to help appease most irate customers, the strongest long-lasting impact this gesture brings about is the “good-will” feeling that will likely be generated for the customer in the aftermath of the unhappy incident. This feeling of “good-will” will then subconsicously build a closer customer touch for the company and thus enhances its customer loyalty, making the loyal customers an additional marketing channel for the company (i.e. “word-of-mouth” marketing).

  • Well said. Often we are so “embarrassed” by our own mistake that we forget to respond enthusiastically to fix the situation for the customer.

    I think this is a great example of exceeding the customer’s expectations.

  • i love their culture in giving their customer the service that they deserve. It reminds me of Wendy’s slogan “Quality is our recipe”

  • Yaro, Great article and thought-provoking. Not only did Starbucks respond with fantastic customer service, they also raised your expectation of the same in the future. One thing we have to remember whenever we deal with customers is we must manage the customer’s expectations so they don’t have unrealistic ones. If we manage expectations well and then exceed expectations, it’s a win-win.

    Maya Angelou said and I paraphrase – People may not remember what you said or did, but they will remember how you made them feel.

    Sherri

  • I agree with you Christen. It is embarassing to be caught in the wrong and that is what puts people on the defensive. Yet if you can ingrain them with the correct attitute and training you can monitor the overall service that you as an organisation provide.

  • Hi Yaro, and all the group,

    WOW, what a fantastic point to blog about and an fantastic discussion. Enjoyed reading it all.

    I think customer service can make or break a business. What starbucks has done is create “raving fans”, and that really is what customer service is all about. And, just think of the benefits of their “word-of-mouth” marketing… no money can buy that spontaneous market presence.

    With that little freebie, they have lost nothing, and gained everything. It’s easier to sell (and sell again) to a customer who has already bought from you. A loyal and repeat customer is like gold…

  • Mel

    Some years ago there was a popular belief among marketing “gurus” that a dis-satisfied customer might tell as many as 22 others about their bad experience,

    And that a happy customer might tell only some 3 or 4 people of their experience.

    And therefore bad experiences should be avoided if at all possible.

    I don’t recall if they explained how these numbers were determined.

  • [...] Starak‚Äôs blog post of his experience at Starbucks makes for great advertising. Starbucks empowers their employees to [...]

  • First, the attitude and response of the barista who forgot your tea was, indeed, exemplary. But, perhaps even more important was that Starbucks apparently feels confident enough in their people to grant the ability to pass out these “apology” cards without going through the bureaucratic set theatre-piece of paging a menial functionary line-manager to come down with a key and unlock the vault where the cards are kept…
    Prompt, immediate, sincere, and correct. This is why two things are true of “premium” brands and services.
    A) You get what you pay for
    B) People are willing to pay more to get more
    Many businesses are suffering because they have only focused on trying to make do with less; this is a defeatist “war of attrition” mentality. Starbucks charges… a lot for their coffee, but because of this margin they can afford top people, top ingredients, and they can afford to “give away” cups of coffee. Partly because it’s good business but also because the company isn’t on life-support and cutting every possibly expense from how often they wash the windows to making the employee’s supply their own uniforms. There’s only so much you can cut…

  • [...] An additional approach could be to take an extra step and offer the customer something that is not standard practice, perhaps a free hair product or manicure on their next visit. Going above and beyond can show the customer that their business is important and help quiet negative comments. Take a look at this example in how Starbucks offers a simple lesson in good customer service. [...]

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