Starbucks – Relationship & Services Marketing

As I am sure you will know, coffee shops have huge amounts of competition – the ‘product’ they sell is literally a commodity.  This has meant that the major cafes have had to augment their core product with a differentiated brand image, as seen with Costa Coffee, or diversify the range of services provided, like Starbucks have.  Neither of these strategies seem to have provided Starbucks or Costa Coffee with a significant competitive advantage over one another.  This may explain Starbucks’ latest tactic (below).

The basic idea is that orders will be read out by calling the customer’s name rather than their drink. The aim of this is to develop a deeper connection with customers, and therefore improve loyalty

Initially I thought this was a really good idea.  However, now I have had a few days to think it over, I am not so sure anymore; I think the ad might be good, but not for the obvious reasons.

Firstly, why this might not be such a good idea:

All the coffee shops have long had a tactical level of relationship marketing by using a simple loyalty card scheme.  But as this is easily copied by competitors, it is necessary to go one step further and offer social benefits and bond with customers.  This is what Starbucks have done right?  So this must be a good thing?  Not Exactly.

To offer true social benefits, employees must actually get to know customers over-time; not just ask for their name.  Asking for their name to put on the drink is a very artificial social bond.  I have talked previously consumers’ intelligence being insulted by marketing, and I think Starbucks’ latest decision is very patronising to their customers.  In fact, the only people who will enjoy it might be the elderly, who – from my experience as a Barista for Costa Coffee – love to chat.


Furthermore, this is just asking for trouble and bad publicity.  It would be no surprise to hear in a few months time that someone has pulled a Bart Simpson-esque prank on a Starbucks branch.

There is also huge potential for daily mishaps to occur.  This latest strategy has already been used in the US.  And bloggers have been quick to share some of their funny encounters with Starbucks employees.  As the blogger (link above) highlights, employees are constantly mis-hearing or spelling names wrongly (picture above).  Hence, the whole idea of this interactive marketing strategy – which is to connect employees and customers – is counter-intuitive.  Simply, the strategy in-fact highlights that there is little, or no, relationship between Starbucks and its customers.

So, you may be asking, if the whole idea of using customer names fails at its purpose, what is it good for?

Well in fact it is the campaign(the ad promoting this service change), I think, is good .  This is because it highlights Starbucks’ brand identity and positioning.  Namely, the ad shows that the company does care about improving their service.  Albeit they might have failed,  it lets customers know that the company is trying to innovate, do things differently and ultimately provide them with a better experience.  And that is definitely a good thing.

Overall, I do not think this is going to be successful, long-term move from Starbucks.  But, I do admire their campaign and I am sure giving away free lattes was a great loss leader to sell more expensive cakes and confectionary in the short-term.

Let me know what you think in the comments below.

© Joshua Blatchford, author of Manifested Marketing, 16/03/2012

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6 Comments

  1. steve

     /  May 14, 2012

    I work for Starbucks and let me say that this new policy is widely hated amongst the staff and managers. for the past 2 years we have seen our hours cut and standards dropped. for a company that has seemingly done well throughout this economic recession the profits are never shared with its workers. This company practises a shamefully anti family and anti unionist agenda and continually puts its greedy shareholders before any other concerns. its products are shamefully inferior to most other high street coffee chains , to top this off we are forced to ask for our customers names in an embarrassing manor even though most people agree its not actually helpful. I have loved this company, but it has become a monster from its formal self. I believe if it continues on this path it will not last long and in my opinion will not be missed.

    Reply
    • Evie

       /  December 9, 2013

      Although the name taking is sometimes embarrassing and awkward to ask of our customers, it makes life so much easier as a barista on bar, how many people order a latte? Many people take others drinks without realising due to the fact they have ordered the same drink.. The name taking diffrenciates this and enables us to not waste time remaking drinks that were taken by the wrong person. In terms of not rewarding their staff we get given shares into their company after two years service, i personally feel this is an excellent perk of the job and partner beverages, i worked in a franchise before i worked in an official store and we never got partner bevs or shares.

      Reply
  2. Kevin Enright

     /  June 1, 2013

    I am a loyal Starbucks devotee in the US. Although I agree that a name on a cup is not equivalent to establishing a relationship, it’s the first step in forming a relationship. I have experienced this first-hand, where I have gone from just another customer, to my name being written on the cup without my prompting, to my order being recited back to me when I go to pay, to now having my drink prepared for me as soon as they see me walk through the door (I may lack in predictability, admittedly). Either way, I also know the names of the baristas that work at my regular Starbucks, which has made me more inclined to tip them. I realize the post is over a year old and perhaps personal experiences may have shifted or reinforced your own perspective on the matter. I just wanted to provide my two cents.

    Reply
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