it's no wonder Starbucks is having financial issues. lol.
how about doing a cost analysis on what that transaction just cost the company.
rough napkin math.
Grande Iced Latte. $3.50 (?) Vendti Iced Latte. $4.50 (?)
If guy is buying a latte on avg 20x month x 12 months. That freebie just gave the company $240.00 in extra revenues. How many customers, how many times does this happen?
Looks like a win for starbucks.
Sean
· 1 year ago
costs would be much lower than that:) those are closer to what they charge...actual cost on a iced latte...2 shots espresso, 1 cup milk, cup, ice and labor... ? don't know there margins at an item level, but must be decent.
sean
Phil Nieman
· 1 year ago
I actually just had a similar experience at the local Starbucks. Ordered a piece of coffee cake, and the girl forgot to give me my piece. When I told her I was still waiting, she apologized and threw in an extra piece. Of course I went back to the office and skyped everyone looking to see who wanted it. I don't know if they are training employees to give more things away, but they should be!
phil
Joseph Wilburn
· 1 year ago
I liked this post! I agree with your last statement about call centres, having worked in many over the years before transitioning into the PR/Marketing world. There are many people who work in the industry like the barista in your example that love what they do and can help support WOM strategies. It's too bad they are not encouraged to do so.
Jan Karel Pieterse
· 1 year ago
No Idea what WOM stands for, but let me share an example of a Dutch company who does a good job at that: www.NS.nl (Dutch railway). I travel a lot by train since I got self-employed, since that enables me to work "on the road" and thus extends my billable time considerably. Anyway; Here's the thing I experienced the other day. In comes the conductor and asks a fellow passenger for his ticket. He doesn't have one, because he arrived late due to a problem with the ticket machine at the station. This means the fare is increased with a penalty (I think it is 30 euros), to be paid to the conductor. They discuss this for a while, but in the end, the passenger (of course) has to pay the full bill. 10 minutes later, in comes the conductor again and he presents the passenger with a 20 Euro bill. Flabberghasted the passenger accepts and the conductor explains that all NS conductors receive an envelope with a certain amount of cash, to use for whichever they judge is right.
Neat, eh?
Ina
· 1 year ago
Thats what good karma is all about.
Sean
· 1 year ago
Jan:
More than neat...Awesome!
WOM = Word of Mouth :) sorry for the acronym.
thanks for your example/story - it's one of the best I've heard. sean
JD
· 1 year ago
Great example of the impact of company culture on WOM,
I think a big part of successfully developing WOM and setting the proper foundation of front line empowerment is held by management leading by example. By providing and channeling real-world examples and by actively demonstrating an instinctive understanding of the 'bigger picture' in relationship building, they promote in-depth customer satisfaction in servicing their customers.
I'm sure this employee witnessed their manager, (and their manager witnessed a previous manager, etc..) acting the same to a similar situation in the past.
Deb Eastman
· 1 year ago
My daughter works at Starbucks and has had several training programs on how to treat customers, including the infamous program where they closed Starbucks for a few hours. This story is a prime example that word of mouth is created by experiences, not buzz campaigns, and that experiences are driving by a culture of focusing on the customers. More companies need to get that.
Kevin Beares
· 1 year ago
I think this is an amazing example of how something of such low cost to a company can have such a dramatic impact on a customer's perception of that company. Two examples that I can think of that I think are tremendously valuable to customers involve technical support engineers and techbeta (technical beta) "give aways".
I was a technical support / customer service manager for close to 10 years before Microsoft and for 2 years at Microsoft. One of the most powerful impacts we could have with a customer was to empower an engineer to provide free support to a customer whenever they felt it was warranted. There are just too many times where the fee based support models can go major league out of control. An great set of examples; A customer calls in with a problem that is complex to them, but takes virtually less time to answer for the engineer than it took the customer to look up the phone number and get the call paid for via their credit card. In most call center models, the support engineer is not empowered to refund the customer for their call, which IMHO is broken. In the times that we did this in my experience, the customer who got the refund without even asking were the happiest customers we ever talked to in the future. It gave them much more patience with our support organization in the future because they valued the relationship that they had with our team. They were also more inclined to do business with us again.
With techbeta (technical beta) "give aways". Lot's of software companies run techbetas with their customers. These feedback programs are tremendously valuable to the software company if run properly. They can validate their feature sets and also get more eyes on their product and catch a lot of bugs that normally would not be caught with the internal testing process, ultimately contributing to a higher quality bar being met when the product releases to the public. In my experience, giving the people who are running the techbeta program the authority to give customers prizes for their participation is a tremdendous way to create a WOM effect. Most customers do not participate in the feedback programs with the expectation that they will be given anything in return for their time. So, when they are awarded for their contributions it has a tremendous impact on thier feelings towards your company. Now, at Microsoft, it is a little challenging to run contests and provide "give aways" for participation because of international gaming laws and also Anti trust policies, but as long as you involve your legal team, you can play by the rules and still have a huge impact on your customers.
Hope this was helpful.
Kevin
Octavio Telis
· 1 year ago
The secret here is to give added value to the customer, it makes sense when a customer get what he want's and its spectatives are raised. I like to play with this, give to customers more about they belive are paying.
All Comments
how about doing a cost analysis on what that transaction just cost the company.
rough napkin math.
Grande Iced Latte. $3.50 (?)
Vendti Iced Latte. $4.50 (?)
If guy is buying a latte on avg 20x month x 12 months. That freebie just gave the company $240.00 in extra revenues. How many customers, how many times does this happen?
Looks like a win for starbucks.
sean
phil
I travel a lot by train since I got self-employed, since that enables me to work "on the road" and thus extends my billable time considerably. Anyway; Here's the thing I experienced the other day.
In comes the conductor and asks a fellow passenger for his ticket. He doesn't have one, because he arrived late due to a problem with the ticket machine at the station. This means the fare is increased with a penalty (I think it is 30 euros), to be paid to the conductor. They discuss this for a while, but in the end, the passenger (of course) has to pay the full bill.
10 minutes later, in comes the conductor again and he presents the passenger with a 20 Euro bill. Flabberghasted the passenger accepts and the conductor explains that all NS conductors receive an envelope with a certain amount of cash, to use for whichever they judge is right.
Neat, eh?
More than neat...Awesome!
WOM = Word of Mouth :) sorry for the acronym.
thanks for your example/story - it's one of the best I've heard.
sean
I think a big part of successfully developing WOM and setting the proper foundation of front line empowerment is held by management leading by example. By providing and channeling real-world examples and by actively demonstrating an instinctive understanding of the 'bigger picture' in relationship building, they promote in-depth customer satisfaction in servicing their customers.
I'm sure this employee witnessed their manager, (and their manager witnessed a previous manager, etc..) acting the same to a similar situation in the past.
I was a technical support / customer service manager for close to 10 years before Microsoft and for 2 years at Microsoft. One of the most powerful impacts we could have with a customer was to empower an engineer to provide free support to a customer whenever they felt it was warranted. There are just too many times where the fee based support models can go major league out of control. An great set of examples; A customer calls in with a problem that is complex to them, but takes virtually less time to answer for the engineer than it took the customer to look up the phone number and get the call paid for via their credit card. In most call center models, the support engineer is not empowered to refund the customer for their call, which IMHO is broken. In the times that we did this in my experience, the customer who got the refund without even asking were the happiest customers we ever talked to in the future. It gave them much more patience with our support organization in the future because they valued the relationship that they had with our team. They were also more inclined to do business with us again.
With techbeta (technical beta) "give aways". Lot's of software companies run techbetas with their customers. These feedback programs are tremendously valuable to the software company if run properly. They can validate their feature sets and also get more eyes on their product and catch a lot of bugs that normally would not be caught with the internal testing process, ultimately contributing to a higher quality bar being met when the product releases to the public. In my experience, giving the people who are running the techbeta program the authority to give customers prizes for their participation is a tremdendous way to create a WOM effect. Most customers do not participate in the feedback programs with the expectation that they will be given anything in return for their time. So, when they are awarded for their contributions it has a tremendous impact on thier feelings towards your company. Now, at Microsoft, it is a little challenging to run contests and provide "give aways" for participation because of international gaming laws and also Anti trust policies, but as long as you involve your legal team, you can play by the rules and still have a huge impact on your customers.
Hope this was helpful.
Kevin
Octavio.