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Starbucks' plan for Holidays
Oct 18, 2008

USA Today details Starbucks' plan that delivers value to its loyal customers. Read Article .Their strategy is simple, as the article points out; "Reward frequency and make Holiday gifts cheaper." They will identify their best customers and "coddle them and makes them feel important." That is a very direct approach to satisfying their customers "soft needs".  Feeling important and "coddled " are just two of them.  They are beginning to demonstrate a behavior change by going back to what made their company great.

In January their culture came under fire for “having slipped and gotten away from their basics.”  The test of great service cultures resides in how they deal with external conflict as well as internal conflict.  Now, how they do, what they do, as well as what they do, was being challenged.  How did they Starbucks react?  They never denied the conflict; they took ownership of it and were proactive in putting in place a solution.  Howard Schultz returned as CEO.

In an unprecedented move Schultz he closed 7,100 of their stores nationwide for three hours on February Th in order to “retrain” 135,000 in-store employees.  The day before the closings Schultz said this in a company wide communiqueé on their company’s web site:  “Tomorrow evening, we will come together in an unprecedented event in our company’s storied history.  We will close all of our U.S. company-operated stores to teach, educate, and share our love of coffee, and the art of espresso.  And in doing so, we will begin to elevate the Starbucks Experience for our customers.” 

During this year business writers for many publications stared to trumpet their demise.   I  personally believe it's not that easy to dismember great companies who have great relationships with those they serve.  I believe further that their culture is very strong and  they are being hurt more than most by the everyday struggles of so many of their customers in these tough economic times. Time will tell, but.... I believe Starbucks will be fine!  By recognizing the significance of their most loyal customers and rewarding them with an approach that also addresses the economic concerns is right on strategy. 

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"How You Do What You Do", by Bob Livingston

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