Starbucks: Customer Satisfaction Case Essay

Why have Starbucks satisfaction scores declined? - Starbucks: Customer Satisfaction Case Essay introduction?? Has the company’s service declined or is it simply measuring satisfaction the wrong way? Based on the data in the case, we can’t conclude if the company’s service is declining or is there is an error in measuring satisfaction the wrong way. What is clear though is the fact that the customer perception, customer’s attitude and the overall differentiation of the Starbucks brand have declined. It is possible that competition, shift in customer demographics and overall higher expectations are causing the low customer satisfaction scores. Analysis:

The Mystery shopping program is a biased tool to measure customer satisfaction, in that it depends on the shopper and his/her own criterion for each of the basic service criteria (Service, Cleanliness, Product Quality and Speed of service). If the program was backed by training that defined standards for the parameters and the criterion for judgment on individual attributes, then the data could have been used to make a valid conclusion. There seems to be other reasons because of which the consumer satisfaction could have declined, the topmost of which are change in customer expectations and competition.

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It is also possible that the overall service has declined because of the rapid company expansion, product innovation, and customization of drinks had a detrimental effect on the Starbucks brand and caused it to have a lower value proposition. Starbucks had about 160% increase in the number of retail stores from 1998 to 2002. By opening stores in new markets and specifically geographically clustering its store, Starbucks compromised its value proposition. Specifically, many stores (small or stores in groceries) did not have the upscale inviting environment, which initially had brought its loyal customers to Starbucks.

The increase in locations also changed the image of Starbucks from being a place for niche customer to being a place for everybody – it started appealing to a larger customer segment. Although Starbucks hired partners that had the ability to balance hard and soft skills and deliver superior service, it is safe to assume that the customization of the drinks and expanded menu due to product innovation reduced the overall time spent with the customer interacting and possibly caused additional stress for the partners because of the delivery target time.

The saturation of the markets also meant that customers were more prone to seeing inconsistency among stores, especially the ones that couldn’t handle the pressure of the changes within Starbucks. As the research in the case reveals, competition from small and specialty stores located close to Starbucks had started to increase around the same time as the retail expansion. It seems that these stores were able to offer the quality, the ambience and the personal attention that the loyal Starbucks customer had grown to love.

In addition to above mentioned reasons, the image of Starbucks had changed in the mind of the consumers who saw the fast expansion of Starbucks with the addition of stores everywhere, as a way for the company to increase its profitability. In spite of the above reasons, it’s not clear if the lower scores are a combination of changing expectations of new customer base and actual customer service satisfaction changes. Even though there might be some accuracy in research and other methods used in the case, the data is inconsistent to prove or disprove that the customer satisfaction levels were declining.

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