starbucks employee retention case study

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4 Starbucks—The ‘Coffee House’ Experts: A Case Study in Cultural and Strategic Alignment

Published: June 2022
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Because of rapid globalization over recent years, the competition around the world becomes, more intense, especially for the service industry with similar products. The most critical point for business to succeed is not only the quality of products they supply, but the atmosphere of cooperating and the amount that teamwork yields in retail sales. The employees who always touch with customers and can realize what customers really need are first-line staff. Therefore, it is essential for companies to motivate, reward, and train their employees to be the best quality personnel. Starbucks Corporation, the most famous chain of retail coffee shops in the world, mainly benefits from roasting, selling special coffee beans and various kinds of coffee or tea drinks. It owns about 4000 branches in the whole world. Moreover, it has been one of the most rapid growing corporations in America as well. The reasons why Starbucks is popular worldwide are not only the quality of coffee, but also its customer service and cosy environment. Starbucks establishes comfortable surroundings for people to socialize with a fair price, which attracts all age ranges of consumers to get into the stores. Besides, it is also noted for its satisfaction of employees. The turnover rate of employees at Starbucks was 65% and the turnover rate of managers was 25% a year. However, the rates of other national chain retailers are 150% to 400% and 50% respectively. Compared with them, the turnover rate of Starbucks is much lower than other industries on an average. As a result, Starbucks would be one of the optimal business models for understanding the strategies of employee motivation, customer satisfaction, and cooperation of teamwork.

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Starbucks Employee Engagement with Starbucks

Employees are the very heart of the Starbucks brand- yet despite its strong culture of “serving up good” through a global offering of social impact opportunities, Starbucks employees were lacking in awareness of these opportunities.

Aiming to better engage store employees in the social impact initiatives led at the corporate level, Starbucks partnered with Purpose to develop a bespoke engagement strategy. Through research, focus groups, interviews & landscape reviews, Purpose created a strategy that included core values to unite corporate & in-store employees, ownable roles for every employee to play in contributing to social impact & ideas for channels and resources that could make the experience enjoyable to all.

To activate this engagement strategy, Starbucks launched a neighborhood grants program which has now received over 8,000 grant nominations from 13,000 employees- and in June 2020, The Starbucks Foundation committed $1 million in Neighborhood Grants to promote racial equity and create more inclusive communities.

Despite Starbucks’ incredible offering of social impact opportunities across the world, initiatives rarely made it into the lives of store employees — the partners at the heart of the brand.

While Starbucks has a strong culture of “serving up good” through service and community connection initiatives, the company recognized that their employees lacked information about what work was happening and what engagement options were available to them. Only 1 in 30 baristas we spoke to had ever heard of Starbucks stores doing social impact work.

Starbucks aimed to make working at the company feel like the best job in retail by offering opportunities for store partners to live their values at work by taking part in global social impact initiatives.

By supporting store partners to serve their communities, Starbucks set out to supercharge the positive impact the company makes on the neighborhoods it serves, and make working at Starbucks feel like more than just a day job.

Theory of Change

Purpose partnered with Starbucks to unearth insights about what was holding store employees back from participating in global social impact initiatives, and determine what might motivate them to take part.

Through polling, focus groups, interviews and landscape reviews, Purpose developed a bespoke engagement strategy for Starbucks to utilize when creating and implementing impact initiatives that would touch the lives of store employees.

Interviews with Store Partners

To begin our research, Purpose conducted interviews with a number of store employees — from baristas to upper management — to understand what they knew about volunteering and service initiatives at Starbucks, and how they felt about getting involved.

Interviews illustrated the awareness gap — but also showed that without time, resources, and permission allocated to social impact activities, partners days were too busy to take time out for ‘extra work.’ Social impact opportunities at Starbucks sounded exciting, but were far from accessible.

Polling Store Managers

Purpose fielded an online survey via Workplace with a focus on Store Managers to further interrogate findings and assumptions that came to light during focus groups. The survey was fielded to over 130 employees, and gathered concrete perspectives on social impact from partners across geographies.

Survey results gave us insight into why Starbucks management chose Starbucks, and what they believed made the company special. We heard that of all the reasons people join Starbucks, it’s the community, connection, and teamwork a job at Starbucks offers that makes people stay.

Barista Focus Groups

To dig one foot deeper, we facilitated four focus groups in New York City, consisting mostly of Starbucks baristas. In conversations with 30+ employees, we learned more about the issues they cared about — which ranged from animals and the environment to advancing racial equity and justice in their own neighborhoods.

However, partners told us one thing loud and clear: in order to participate in social impact, they needed to feel a personal, local connection to the cause.

With insights in hand, Purpose created a strategy for engaging employees in global social impact work moving forward.

The strategy aimed to equip corporate leaders with the values store employees need to see reflected in social impact opportunities, and the roles they can play within those opportunities. It also outlined several meaningful programmatic options for corporate to deploy.

Combined with recommendations on tools and resources required as well as how to measure impact, the final product acted as a framework for partner participation.

After the rollout of the global social impact strategy, Starbucks approached Purpose for help with qualifying their current social impact employee engagement opportunities against the new framework.

Together, we ran each of Starbucks impact initiative through assessments to ensure the programmes delivered on the accessibility, valued-based, local experiences the strategy promised. Where gaps in initiatives were identified, Starbucks reworked programmes accordingly to ensure they were right for partner engagement.

The corporate team at Starbucks was particularly excited about applying an impact-centered approach to the core of their social impact offerings. To help colleagues across marketing, store relations, and global social impact understand the new methodology, Purpose facilitated a day-long workshop to train staff on how to use a theory of change to ensure programmes are designed strategically, audience first, and with impact at their core.

Starbucks activated their engagement strategy by refreshing their Neighborhood Grants program to make employees the driver of each grant. In the program, employees were invited to nominate the local organizations that serve the communities where they live and work, to truly center the needs and opportunities employees observe as they interact with their communities in Starbucks stores every day. Since the launch, there have been over 8,000 grant nominations from 13,000 employees, which continues to grow.

The refreshed partner engagement strategy for global social impact changed the course of community investment and employee engagement at Starbucks, for good. By making all social impact programmes tailored to partners personal passions, Starbucks became more than a place to work — it became a place for partners to bring their authentic selves to work each day, serve the communities they love, and live their values.

When Black Lives Matter protests spread across the country in the summer of 2020, Starbucks was equipped to heed employee calls for action — committing $1M in grants to racial justice organisations nominated by store employees themselves. As COVID struck, they asked partners to lead the way in determining how the company could help.

The partnership has shown us that the impact a company can make when we meet employees where they are is boundless.

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Starbucks Corporation: Case Study in Motivation and Teamwork

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El desarrollo de los tornillos Sin Fin HIDROMETALICA son el resultado de años de investigación y experiencia culminando en un avanzado ejemplo de revolución en el transporte de materiales secos o mojados.Se trata de un tornillo sin fin construido en aleaciones de acero, laminadas en frío y resistentes al uso; también se construyen en acero inoxidable. Carece de eje central lo que hace imposible su bloqueo y carece de cojinetes de los que preocuparse. Permite el paso de sólidos gruesos para ser transportados con rapidez. En el tornillo Sin Fin HIDROMETALICA está soportado directamente en un canalón generalmente en forma de U, de acero inoxidable con revestimiento interior de polietileno antidesgaste. Los materiales transportados no entran directamente en contacto con el motor permitiendo que se realice cualquier operación de mantenimiento fuera de la instalación. Permite una gran flexibilidad en una amplia gama de aplicaciones, al poder ser conectados dos tornillos en ángulo horizontal o con ángulos de inclinación vertical de hasta 40°; para ello tendremos un transportador que puede trabajar empujando y el otro tirando, consiguiendo instalaciones muy compactas en espacios reducidos. Pueden trabajar a pequeñas velocidades con la misma capacidad de transporte que las transportadoras convencionales.

Michele Fitzgerald

Place Branding and Public Diplomacy

Simon Anholt

Jackson Scholze

International Journal of Advanced Computer Science and Applications

asaad yousif

Birat Journal of Health Sciences

Lalit Rajbanshi

Introduction: Knowledge and awareness of sepsis among various health care professionals is essential for prompt diagnosis and appropriate initial resuscitation and management of patient with sepsis. Objective: To assess and compare the knowledge and awareness of sepsis among health care professionals working at Birat Medical College and Teaching Hospital. Methodology This was a questionnaire-based survey with comparative study in 200 health care professionals conducted at Birat Medical College and Teaching Hospital from July– September, 2019. Questions were designed to assess the knowledge on diagnosis, initial resuscitation and management of sepsis. The knowledge level of the participants was assessed with scoring system as good, average and poor which was finally compared between the various health care professionals. Result Out of 200, only 180 health care professionals were included for statistical analysis. While assessing the knowledge on diagnosis of sepsis, 55.6% consultant ...

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How Starbucks’s Culture Brings Its Strategy to Life

Paul Leinwand
Varya Davidson

They focus on a few positive attributes and amplify them.

In most organizations, culture and strategy tend to be discussed in separate conversations. Executives know that culture is important and that a negative culture can hurt company performance, but they often don’t know what to do about it. Or they attempt to improve the situation by launching a culture initiative to “make the workplace more positive.” What most executive teams typically fail to do is to connect the company’s culture with how the company makes its strategy work.

Paul Leinwand is a principal at PwC U.S., a global managing director at Strategy&, and an adjunct professor at Northwestern’s Kellogg School. He is a coauthor, with Mahadeva Matt Mani, of Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future (HBR Press, 2022).
Varya Davidson leads the people and organization business for Strategy& in Australia, Southeast Asia, and New Zealand and sits on the Katzenbach Center’s global leadership team. She is a partner with PwC Australia, and has worked with leading public and private sector organizations across Europe, the Middle East, North and South America and Asia-Pacific.

Partner Center

Role of Managers in Employee Retention: A Case Study on Starbucks

Added on 2023-06-18

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How Starbucks Became Everyone's Cup Of Coffee

Table of contents.

Starbucks Coffee Company boasts impressive stats:

Owns 40% share of US Coffee Market
Earns $24,72 billion worldwide
Has 29,324 stores worldwide in 72 countries
Over 14,000 of total stores in the United States / over 27,000 worldwide
Conducts over 90 million transactions per week
So popular in China, a new store opens every 15 hours
Following McDonald's as the most valuable fast food brand worldwide (valued at $44.5 billion)

It will be very hard to achieve something Starbucks did since 1971 when the company started. There’s a lot of firsts when it comes to the company. First to introduce the new coffee culture, the first privately owned company which offered all their employees health insurance AND the share of the company.

The CEO, Howard Schultz, who might even run for president at some point , achieved something that is almost impossible — appeal to shareholders, employees, and customers at the same time. This is my giant case study on how to achieve world domination in case you want to bring an old product to the new market.

The Starbucks Idea

The coffee culture in the United States before the 80s was nonexistent.

Americans were used to huge cans of ground coffee and they couldn’t care less about the flavor. Even if you’d go outside your household to a dinner you would be met with a generic drip coffee or styrofoam cups of foul-tasting joe at the workplace. No one even thought about the flavor, the origin, or anything more sophisticated tied to the drink.

The 70s coffee culture didn’t exist at all.

In 1970 three college friends: Gordon Bowker, Jerry Baldwin, Zev Siegl went into the coffee business together. They set up a shop and sold roasted beans. They received the knowledge from a man named Alfred Peet (if that rings a bell, yes he is the owner of Peet’s Coffee). Alfred was one of the most knowledgeable people in the country about coffee. He knew where to source it, how to roast it. He was the first to introduce dark roasted and french roasted beans.

In 1971, the three friends opened the roastery and bean shop in Pike’s Place, Seattle’s famous tourist destination known for the Pike’s Public Market Center. Peet helped the young entrepreneurs by providing them with beans and connecting them with reliable bean providers.

The name Starbucks stuck because it’s easy to say, impossible to misspell, and has a vaguely British overtone to it. Really, we picked it because our lawyer called and told us we had to submit papers and needed a name. We didn’t know at the time, but Starbuck is the name of the first mate on the Pequod in Moby Dick. That might explain the siren logo. Some might even say it comes from Mount Rainier's Mining company Starbo . According to Gordon Bowker, they were initially going for the name Cargo House Coffee .

The business was successful enough for the trio so they opened 4 more shops in Seattle. However, no coffee drinks were being served. This was still a roasted bean retail shop intended for home use.

At that time Starbucks was competing against instant coffee cans. The quality was stark and thus the business went well. Things were about to change when the founders hired the head of marketing and sales, Howard Schultz in 1982.

The Inclination for Grit and Determination Fix Social Injustice

Howard Schultz was a child raised in poverty. After seeing his father injuring himself doing grueling manual labor, he decided he wanted to get rid of the injustice of the working class. An idea of creating and striving for an environment where employees are fairly compensated and taken care of has been set in.

In Masters of Scale interview with Reid Hoffman, Schultz described seeing his father stretched out on the sofa after suffering an injury. Howard Schultz swore to himself to make a company his father had never worked for.

“I saw my father losing his sense of dignity and self-respect. I am sure that this was caused mostly by the fact that he has been treated as an ordinary working man.” – Howard Schultz, AstrumPeople article

Schultz started working at the age of 12 selling newspapers. Since he was being athletic, Howard earned an athletic scholarship at Northern Michigan University where he received his Bachelor’s degree in Communications in 1975.

After his graduation, Howard Schultz spent three years as a sales manager at Xerox, and then he started working at a Swedish company Hammarplast , where he was selling home appliances, including coffee grinders to businesses like Starbucks.

The Starbucks founder trio took him amidst to grow the company.

In 1983, Howard Schultz gets an epiphany. He travels to Milan, Italy for some sort of conference and what he sees there changes his perception of coffee forever. In certain European countries, especially Italy, coffee was one of the more important things in life. It served as a social lubricant and the third place of dwelling between home and work. Schultz discovered what it means to have a high-quality espresso served in a proper way in a relaxed environment.

He was determined to bring this piece of coffee culture back to the United States. The founders gave in after continuous pressure from Schultz to open an espresso bar. Eventually, they gave him an opportunity to open up a coffee bar inside a store. It was incredibly popular. But the owners didn’t want to turn the coffee retail business into a cafe.

“After Milan I flew back to the United States, excited to share what I experienced. But my bosses, the first founders of Starbucks, for whom I had tremendous respect, did not share my dream of re-creating the coffee bar experience in Seattle. I was crushed, but my belief was so powerful that, in April 1986, I left Starbucks and raised money from local investors to found my own retail coffee company. I named it Il Giornale after Milan’s daily newspaper.

In 1985 Howard Schultz opened his own cafe chain - Il Giornale . He wanted to pursue the dream and went back to Starbucks owners and offered to buy all 6 stores that were operational at that time. With the help of raised venture capital he succeeded and became the CEO after the successful acquisition with $3.6M.

The hyper-growth began.

Key takeaway #1 — change is good

The determination and unrelenting belief to change the current situation is not just a helpful attribute but a prerequisite for cultural change. Staying true to the “one thing” without flinching will be the cause and the driver of change.

“An Old Product in the New Market”

Whenever something works out on an incredible scale in one market, there’s a potential of seeing it succeed in a new one. This is called introducing an old product to a new market.

For example, Uber and Lyft built an incredible business about ride-sharing. Because they have to contain the growth before they are spread too thin, that gives the opportunity to copy-cats in different markets. In the United Arab Emirates, you have Careem ( just recently acquired by Uber ), in Croatia you’ve got have Cammeo and in India, you’ve got sRide .

After something experiences great success, there is only a matter of time before someone else sees the potential and brings it back to the new market, and starts eating out the market share

Coffee was a big opportunity in the United States at that time. Howard Schultz saw with his own eyes how effective and important it is in Italy and he knew he could do something similar in the United States. To perform a similar innovative (for the new market) service you would need to take the entire concept and localize it to the new market.

Even the trends from 2004 to this day shows an upward trend in coffee:

This go-to-market product strategy was first introduced In 1957 by Russian American mathematician and business manager Igor Ansoff. The Ansoff Matrix was published in Harvard Business Review in the article “Strategies for Diversification”. In his opinion, there are only two ways to develop a growth strategy — varying what is sold (product growth) and to whom it is sold (market growth).

Market development — new market, existing product

The Starbucks go-to strategy was to bring the already established product in different cultural and geographical spaces into the new market — the coffee-culture deprived United States.

Howard Schultz’s task was to closely observe how Italians treat the product and figure out a way to bring it home with minor changes. It was impossible to expect that the new market is going to slurp macchiatos from tiny espresso cups but everyone could understand comfort and better quality. That was going to be Starbucks’s trump card.

Market penetration — old market, old product

The most obvious strategy is to sell the existing product to the existing market. With this concept there’s a little risk since the companies don’t have to educate the market with the new product, however, the growth is inhibited by competition or decreasing trends.

Diversification - new market, new product

By far the riskiest approach is introducing a new product in new markets. Not only the product needs to provide clear values, but it also has to educate its use in the new market.

Imagine bringing augmented reality technology to a country where there’s no practical use for it yet. Since there’s a great risk, it can also result in amazing success where you’re the only provider in the blue ocean market.

Most of the startups are banking on this strategy.

Product development - old market, new product

This strategy is most often used by established brands that are already known as leaders in their field. If a washing machine company introduces a new technology that also folds your clothes after washing and drying, that would be much easier to understand and adapt to their existing users.

Key takeaway #2 — do market research

When developing the new market, learn as much as possible about the product itself in the location where it’s mostly used and established. Identify all the major benefits and think of the most significant values that would succeed in the new market

Eco-Conscious, Friendly People, and Profitable — Starbucks’ Triple balancing act

Howard Schultz had an idea to build something that is almost impossible to imagine and can exist only in Utopia. From the start, he wanted to serve with equal importance towards customers and employees.

This is almost impossible to achieve since on one end the business investors want to see money coming in, which in most cases means lean running staff with lower wages and higher-priced products. The staff, or “ partners ” as Howard Schultz calls its employees, are not only compensated a fair wage ( between $10 to $15/hour according to Glassdoor ) but also have healthcare insurance and discounted stock options for company shares.

Howard went even further, offering full tuition coverage through Arizona State University's online degree program .

This idea was most likely outrageous to shareholders. Everyone will get a piece of the company’s pie?

In a Tim Ferriss interview with Jim Collins, the author of Built to Last and Good to Great mentioned the final lesson of his mentor and all-around management superhero Peter Drucker:

“The management isn’t about being more efficient all the time, but it’s also being more humane at the same time.

Striving for workplace quality for the employees was thus one of the main values the CEO implemented in the company.

The interesting analogy is Jordan Peterson’s theory of order and chaos (yin and yang) where one side represents the profit that company must achieve by ruthlessly cutting back the cost in the workforce and the other side where the conscience of doing the right thing for your people brings satisfaction and peace to the workplace which is a proven necessity for customer-facing businesses.

Key takeaway #3 — happy employees make happy clients

Treat your people well. When you’re in the service industry the customer satisfaction and treatment are at times more important than the actual product. And happy employees make happy clients.

The Product

Better coffee.

To coffee drinkers, there are not a lot of things more important than a good coffee in the morning or during the day. By today’s standards, Starbucks drinks aren’t at the level of barista artisans and coffee aficionados. But when the shops started opening in the early 70s, 80s, and 90s, the espressos and lattes were vastly different from all the other stuff people were drinking.

Coffee is generally roasted in three ways: light, medium, or dark, depending on the time dedicated to the coffee beans’ roasting.

In a light roast, you would notice a fruity and acidic taste. Coffee beans are actually considered fruit and are sometimes called cherries. That is the reason you taste light roast as acidic with fruit notes.

In Medium roast, the coffee tastes the sweetest. The glucose levels reach the point where the glucose starts to break. Coffee roasters would say the medium roast is the most balanced since it’s not bitter nor acidic but something in between.

In dark roast, you can taste the bitterness due to burned beans.

Coffee quality comparison

Starbucks predominantly use dark roast coffee which also represents the majority of the coffee that is being consumed in North America. As mentioned, the coffee quality was much better than instant abominations in the early 80s; however, it definitely cannot measure up to artisan roasters.

There are two main reasons:

1— Dark roast is cheaper and can be produced in mass quantities. Similarly to green tea, the light roast-worthy beans are grown in shady, high-altitudes where it produces the most sweetness. High-quality matcha (powdered green tea leaves) is intentionally kept in the shade so it produces more photosynthesis and better taste. Since Starbucks has to supply tens of thousands of shops, they have to bring the mass supply to the cafes. Brian Stoffel from El Toledo roastery in Costa Rica says: “It would be financially stupid for a large chain to buy high-quality coffee beans and use them for dark roast coffee.”

This brings us to…

2— The coffee has to taste the same across the cafes to guarantee uniformity. With dark roast, the flavors of the beans are getting covered up in the same way as overseasoning a dish or overcooking a steak.

But it wasn’t just about the coffee alone. The branding kicks in and people pay for something they want to eventually become. Drinking Starbucks drinks meant they are sophisticated, culturally progressive individuals who enjoyed the premium experience of coffee-drinking culture from fashionable Milano streets.

The slim and elegant takeaway cups proudly wore the green siren logo so the passers-by noticed the person drinking that exact coffee. These cups were different from styrofoam cups in the office or fast food joints.

A similar tactic was used by Apple with the launch of iPods and white earbuds. The iPod was a cool new gadget you had to wear to be relevant in modern society. Apple made it in such a way that people noticed which users had iPods — because they plugged white earbuds into them.

This was a genius idea because the users were immediately differentiated from other less-cool mp3 gadget-using people. Secondly, this was a perfect silent word-of-mouth strategy. If local influencers were seen using white earbuds, everyone else wanted to get on that trend. This strategy is viral in concept and is used by many companies; however, it’s harder to implement it on a distinctive level.

Later on, Starbucks adapted to the marketing with something called “horizontal offer”. It wasn’t just about the dark roast and espresso shots. Young budding students wanted something sweet and mocha just hit the note between coffee and rich chocolate fudge. Why not having both in one product?

Later on, Starbucks started offering teas and snacks. Snack is bringing in a substantial amount of revenue. The shops are using the display of sweet pastry or savory egg sandwiches like any expert pastry shop in Europe. And there are not many people who can resist a croissant, cinnamon roll, or blueberry muffin with their americano or latte.

The food is bringing in more than 20% of all revenue . The pasty was the start, but the company followed up by offering breakfast sandwiches. The adaptation to the market goes even further.

With the recent diet trends in health and fitness, Starbucks has you covered with gluten-free, protein-rich snacks.

With all the addition and expansions to serve a larger audience, it’s inevitable to create resistance groups who blame Starbucks as a commodity coffee provider. And they would be right, it has become that because their system of sourcing beans has to ensure the stock supplies for thousands of shops. But by becoming the main coffee dealer to the masses all the micro-roasters and man-bun wearing, tattoo-sleeved barista artists can fall on their knees and thank the mighty green Siren for creating a market for them.

The need for coffee has increased substantially with the introduction of better coffee, so it created another pocket of niche providers of premium roasted bean roasters.

The price of a cup

Most of the coffee shops live well because they can afford hefty margins. An 80% markup is a standard in the coffee business, especially on the higher-end brews. According to the Small Business Development Center’s 2012 report, food costs take up about 15 percent of revenues on average. The average coffee shop then has a gross margin of 85 percent.

Starbucks margins must be pretty loaded then since they buy tons of coffee from a few sources. According to Coffee Makers USA, the actual coffee in a grande Starbucks cappuccino costs about 31 cents.

For a commodity product such as coffee, Starbucks drinks are quite up there on the more expensive tier ranging from $2.15 for a tall drip to $5.95 for a seasonal frappuccino concoction. But taking into consideration the physical positioning ( Chapter 5 — Coffee Locations ), paying off employees and staff the actual margin per coffee sold are 7% .

Historically, Starbucks has been raising the prices per cup over the years. Since it has poured a lot of equity into maintaining the brand image, it can afford to have a steeper price than its competitors (McDonald's and Dunkin Donuts). Instead of losing the price-sensitive customers, Starbucks differentiates itself from the before-mentioned companies and thus keeping the brand image of a premium java provider.

However, as Tucker Dawson from PriceIntelligently mentions, the prices aren’t increased across the whole product offering . The high-margin items have stayed the same.

Product differentiation

By having a strong and recognizable brand, the company can afford to put out merchandise. Starbucks holiday-themed mugs and localized artwork on them are a big part of the exposure. The merch cabinets and tables are usually near the counters or areas where there’s a longer dwelling time.

The revenue isn’t coming just from the beverages alone. Starbucks did an amazing job of offering non-caffeinated beverages including kids drinks and teas which were introduced after partnerships or acquisitions of Tazo and Teavana.

Starbucks started to diversify its products, pushed them into retail space, and also added teas.

The big drivers are also snacks, wholesale beans, before-mentioned merch, and coffee equipment.

Key takeaway #4 — diversify and expand

While the product is one of the key components of a successful business think about its potential upgrades. Keeping the core you can diversify the offering (and acquire new revenue channels) by expanding into different verticals but staying inside your core company values.

Experience is More Important Than The Product Itself

With a distinctive brand identity, Starbucks shops are easily recognizable anywhere in the World. For a global brand, this is one of the mandatory elements. Each franchise is slightly different than the other — Starbucks in the posh downtown area will have a different feel than the one on the Student campus or at an airport.

But each store follows certain guidelines which are prescribed. In tech and startups, product development follows a concept called minimal acceptance criteria . In other words, what are the lowest common denominators the dev team needs to do before it can be rolled out as a published version.

For Starbucks Cafes, even though the store managers have a certain freedom to run and maintain the facility, they have to ensure to deliver the core Starbucks qualities.

Indie playing music
Comfortable (community) tables for remote work
Reliable wireless connection
Charging Outlets

These shouldn’t just be taken for granted. People love some sense of predictability in their lives. How many times have you been on the lookout for Starbucks when visiting a new country just to take advantage of their wi-fi connection and use of restroom? From that perspective, Starbucks serves as a transactional facility offering other services which don’t have much to do with coffee.

The main idea is, coffee is not the product that is being sold at Starbucks cafes — the whole thing is a social experiment of creating a meeting place between people. It serves as some sort of oasis for meeting up with friends, having a snack and a cup of coffee in a comfy chair while listening to the latest Indie playlists . Starbucks is less in the coffee business as is in people’s business as well.

“It’s not Starbucks coffee you are getting, it’s the Starbucks experience. “

By calling your name and writing it on the cup, it doesn’t just inform the customer that their drink is ready. It allows a more personalized service since we love hearing and seeing our name.

Smells and sounds

Starbucks Sounds

Chances are when you go to Starbucks you don’t ever hear the music. But it plays an important role nevertheless. Starbucks playlists are carefully curated to help create that ambiance of a neighborhood coffee shop.

It has been a piece of the Starbucks experience for over 40 years already . The songs and tracks are carefully curated way ahead of time. These handcrafted playlists usually consist of indie, feel-good songs, pop, alt-country to season-themed or even classical playlists during holidays.

In 1999, Starbucks even acquired a Bay Area music store to launch its own branded coffeehouse and later on, even a record label. In the early 2000s, Starbucks sold CDs in the store until the format decline. In 2016, Starbucks partnered with Spotify . Through the mobile app integration, Spotify plays music as part of the app. In-store listeners can take a look inside to identify the artists and save the tracks to their playlists.

Holly Hinton and David Legry, the in-house music curators, are responsible for what gets played. What sounds like the best job in the world, actually is. Their sole work is searching for the right tracks and artists that they can see are fit to be played in the coffee shop.

In an interview with Fast Company , Holy Hinton said:

“We want our customers to walk in and have a ‘What’s that song?’ moment. We want them to hear interesting, cool music that they might not hear when they turn the radio on. It’s music that we think is cool and would sound beautiful in the coffee shop. It’s the music that we’d want to hear on Sunday morning when we’re reading the paper and drinking coffee. It’s a friend-to-friend personal. And we’re lucky to be able to be a part of that.”

To localize the experience, every region is slightly customized regarding the music, while still carrying the same vibe Starbucks customers are used to. This way, whenever a customer comes to the cafe, within the first few seconds, they feel accustomed based on the music alone.

The interior design

Every piece of furniture and interior is carefully planned to conform to the standards of the homey coffee place.

To get their store right, Starbucks interviewed hundreds of coffee drinkers to get as much information which they could use to build a perfect coffee shop. The overwhelming consensus actually had nothing to do with coffee; what consumers sought was a place of relaxation, a place of belonging.

If we go back to Howard Schultz’s deciding moment from the Milanese coffee shops, it shows he managed to do just that. Create a community space as a second home. It’s somewhere where people meet, it’s where you can take someone for a first date or even get some work done at the large community table.

In the book Starbucked, freelance journalist Taylor Clark claims, that “The round tables in a Starbucks store were strategically created in an effort to protect self-esteem for those coffee-drinkers flying solo. After all, there are no “empty” seats at a round table.”

If we looked at the interior, the counters, chairs, and wardrobes are built out of natural materials like warm woods and stone. In some stores, you would find cozy armchairs as well. With the Shared Planet initiative , they doubled down with environmental sustainability in mind and employing local craftsmen to do the job. The stores are built from reused and recycled materials wherever possible.

Most of the new stores that are being built are a part of the LEED Certification program (Leadership in Energy and Environmental Design).

Starbucks differentiates from three general looks with the addition of concept designs:

Heritage coffee houses reflect the history of the place where the store is located. At Pike Place, the coffee shop reflects the merchant trading roots with worn wood, stained concrete or tiled floors, metal stools, and factory-inspired lighting. Even more sophisticated is the New Orleans inspired coffeehouse showing the rich music history.
A “Louisian merchant in the early 1900s” inspired heritage coffeehouse with vintage trombones light fixtures. Located in French Quarter, New Orleans.
Artisan stores echo the industrial past of urban markets, taking inspiration from the Modernism of the 1930s. This motif celebrates simple materials like exposed steel beams, masonry walls, factory casement glass, and hand-polished woodwork in a creative gathering place for culture and the arts.

Regional Modern are localized stylized coffee shops. The interior is spacious. comfortable and welcoming. The bright, loft-like, light-filled spaces punctuated with regionally inspired furniture and culturally relevant fabrics create a calm and contemporary respite from the clamor of the fast-paced world.

Experimental — with growth and a plethora of locations comes more daring and innovative designs. Unique designs such as the reimagined drive-thru in Colorado , the Swiss Train contemporary mobile coffee space from Geneva Airport to St. Gallen or one of the beautiful Shinto shrine-inspired coffee shops in Japan

‍ Starbucks Reserve

To combat the upscale coffee market which ironically has to thank Starbucks for creating fertile grounds of demand for premium coffee, Starbucks started opening up so-called Starbucks Reserve stores. These are luxurious, beautiful, and magnificent stores where they roast premium, rare beans and experiment with different brewing techniques.

CNN Money described the store concept as "an open, marketplace-style" with a Princi bakery counter, a full liquor bar, and a Reserve coffee bar, with tables, lounge areas, and two fireplaces.

"Our Reserve store takes the best of coffee craft as well as artisan baking and layers in a marketplace-style customer experience creating a space that has both energy and moments of intimacy," — Liz Muller, VP of Creative, Global Design & Innovation at Starbucks

Coffee shop locations

In any high-traffic area in the city where Starbucks is located, you almost have a feeling their shops are everywhere. You would be partially right — Starbucks are strategically located in areas with high appeal. Similarly to Walgreens, Starbucks chose the concept of the convenience store, always located in an area of larger foot-traffic .

Source | A snapshot of Starbucks shops in Seattle

Arthur Rubinfeld who is responsible for Starbucks’ location selection, explained there are about 20 or so analytic experts around the world who are assessing different factors of the appropriate area for the new Starbucks shop .

Key takeaway #5 — spoil your customers

Think beyond the product and identify what else can you do for the customer to add you in their daily, weekly routine. Customer support excellence is mandatory, so think further and in the direction of the place’s ambiance including smells and sounds.

Breaking down the Brand and Messaging

Bill Macaitis, former CMO of Slack said it best - “The brand is the sum of all customer touchpoints your customers have with you at any point”. With the food and beverage category, this is even more important.

By introducing and creating a culture of coffee drinking, Starbucks had a major opportunity to create intimacy with the customer. In Italy, coffee culture is a part of every day and the same culture was slowly getting familiar to the new audience.

Because of the personal nature of coffee and frequency of visits, this relationship-bonding happened much faster than in other fast-food joints, especially since in the early years of Starbucks there was no competition.

Brand and product

The bright white cups with the green siren are the first noticeable brand. But it goes beyond that. You will notice that Starbucks never offers any sort of discounts or actions like buy-one-get-one-free. That’s sort of action dilutes the premium feel of the brand. You can get a free coffee drink for your birthday, but the underlying reason for that is for a customer to develop a positive connection with the brand and company.

The most valuable assets of the regular Starbucks coffee shop can be broken down:

☕Free reliable Wifi - besides oxygen, water, and sleep, the online connection has become a necessity in modern civilization. Whenever you’re in a new place and you need to connect, one of the first options would be a Starbucks shop.

☕Comfortable seats and community tables - whether you’re there to take a breather or putting some hours of online work or organizing an impromptu study group, there’s a Starbucks location that can provide those demands. Most of the Starbucks are generously equipped with charging outlets as well, so you can get another drink after your focus is starting to drop… and then another… And another...

☕Friendly baristas - customer service is ingrained in the retail work description yet rarely done the right way. With L.A.T.T.E. method (Chapter 8 - Disciplined Action) and general training of Starbucks partners , each interaction with the customer is there to provide a positive experience. Calling people by their name, timely service, and the patience of crafting ridiculously complex drink orders .

☕Brand colors and materials — the nature-influenced interior with dark colors and wood finishes are giving a feel of hominess. Sometimes a Starbuck visit is just a pause you take in a day to relax your eyes.

☕Music and smells — coffee and snacks just smell amazing. Let’s take that for granted. The music serves a purpose as well as bringing an ambiance that is great for having a conversation or focusing on work (or your date).

Key takeaway #6 — positive interactions

The brand is the sum of all touchpoints the customer has with the company. This goes beyond the product and customer service. Think about every single interaction customers have with you and make them positive.

Starbucks Master Example of Mobile Retention and App Rewards

Starbucks mastered the mobile game at the right time. Dabbling with mobile technology since 2007, Adam Brotman spearheaded the platform to maximize the effect. The big challenge was to align it with the brand.

“We don't look at mobile in a vacuum. We have an overall digital strategy that's all about building relationships with our customers, and that strategy runs across a number of digital touchpoints. We're looking at mobile, Web and social to think more holistically about how we engage with our customers and tell our story." — Adam Brotman, Chief Digital Officer

In the Manifest survey in 2018, 500 smartphone owners rated their satisfaction using food apps. Starbucks had the most popular and regularly used loyalty rewards app — 48% of users used it on a daily basis.

Four years later, Starbucks remains one of the most popular apps, ranking number 6 on the list of most downloaded Food & Drink apps.

The mobile switch paid dividends with time. Instead of support and enhancing physical visits to the store, the channel began bringing in 23% of all the revenue.

Ordering ahead of time and user experience

For a food mobile app to be successful, it must bring value to the user, be easy or even fun to use and it should have entertaining, dynamic content.

The design has to adhere to rules of the brand, achieve a consistent visual look and continuity across all touchpoints.

The mobile app design is no different than the rest of the materials Starbucks uses.

Digital Engagement paid tremendous dividends for the company.

Starbucks CFO Scott Maw said almost all of the company’s same-store sales growth has come from customers that have digital relationships with the company and those that are in the Starbucks Rewards program.

User-friendly design

This is the minimal and easiest thing to leverage on. With a strong brand, it should not be hard to create an appealing visual interface and create logic flow and transitions or continuation to the desired action.

Engaging loyalty program

Retention is the name of the game. If a customer trusts you well enough to download your app, you have a unique opportunity to convert him or her to be a regular user.

Starbucks has a similar strategy with the reward system. Every day there’s a slight reward, whether it’s collecting points or showing the current mouth-watering warm drink inside the app. It’s sticky and you can’t help but wish for a warm beverage.

Mobile pay and ordering

The North American market is known for heavy mobile use . By prepaying and using the device to quickly go through the ordering process, the customers feel more efficient and slightly more an advantage than the other poor souls who still buy their coffee with credit cards or cash.

Integration with other platforms and services

Partnerships are ways to get tons of new users with one big swoop. Spotify acquired one million users a few days after partnering with Facebook (Source) and Facebook had one sexy product update from it as well. For similar reasons, Starbucks used Spotify to enrich the experience of the mobile app.

Now playing highlight in Starbucks stores (Music is a big part of the brand and having perennial "Shazam" embedded brings seemingly insignificant, yet positive experience.

UX/UI — breaking down the mobile app design

Out of this world personalized experience.

The app remembers your favorite order. This is ingenious. We’ve mentioned how coffee represents a daily habit - if Starbucks manages to infiltrate itself into your habit loop, they’ve won. They have become a part of your daily routine. Stacy always stops at the same drive-through Starbucks, orders her Grande Latte with Soy Milk at 6:15 am before she checks-in at her job. When that’s her daily or even only a few time per week routine, the LTV for that kind of customer is absolutely amazing!

Every little detail counts. For instance, here’s the customized greeting each time a user opens the app’s Home tab.

Gamification

Most addictive phone games always give you something to do if you’re not using them for a while. From Candy Crush Saga to Supercell’s engineered mobile drugs like Clash of Clans and Boom Beach, the mechanics of engagement are carefully predicted for maximum time and cash spend. These games start with low difficulty. They are fun, colorful, and offer an entertaining introduction to their mechanics. But you can play all day, and after a while (on a free tier) you’re locked out of the game.

To continue playing, you can either (literally) buy your time or increase your chances of success with extra loot, power levels, or something similar.

Starbucks uses a similar principle of gamifying its mobile app. There’s a lot of value upfront (pay with a card, skip the line, earn credits for free drinks) but it serves the company’s profit. You get hooked to those stars (credits) which are stacking in your beautifully designed mobile app.

There are also challenges for extra Starbucks points (who can say no to double credit days?)

With the app, Starbucks gets you to try new products and thus increase the range of products you are consuming AND it gives the company an opportunity to increase the average order revenue per customer.

There’s a thin line between being overbearing and being just enough engaging. And at the same time, they have to be very strategic on the number of features offered. Sean Ellis , the OG Growth hacker said the product is ready to ship once all the unnecessary features are taken away (kind of the same mentality as per good design). Luckily with MILLIONS of users, Starbucks can apply some Data Science magic and figure those timings for every type of person.

Personalization goes even further - it tries to give a similar experience as to visiting the store ( source )

Starbucks Loyalty Program on triple-caffeine nitro power

The Starbucks Rewards are dead simple - the more you spend the more stars you get. Besides the stars, the rewards program offers birthday rewards, phone payments, paying ahead, free in-store refills and special offers and events for members. As expected the experience is personalized for each user.

The Rewards work like gangbusters! More than 14.2 million active members in the U.S. are invested in the loyalty program and the mobile strategy has seen an 11% growth in users in Q2 2018 . The gamification of the program and “spend more, earn more” in some cases represent 39% of the entire chain's sales .

Here’s what’s ingenious about the mobile program. Even though there are people who prefer to have the minimum number of apps on their phone and think twice before opening the doors for the elite club on their smartphone storage, the Starbucks app is a trojan horse of benefits - even if you don’t care about collecting stars, it’s tough to say no to the free birthday drink or the convenient mobile pay.

Online Ordering and easy payments flatten the friction of getting the product. Just like the Amazon 1-click purchase or Slack’s onboarding sequence , the same goes for picking up a mocha and Petite Vanilla Bean Scone. At first, Starbucks had some issues, since the mobile members had to wait in line just like the others, but Starbucks responded by adding dedicated stations for mobile order-ahead customers.

Members can skip the waiting line and enjoy the jealous looks while feeling elite of themselves.

The beauty of the app isn’t giving one big benefit of a quicker caffeine shot to the member, but it serves as an upsell marketing tool. The Starbucks app is a delivery method for presenting new items ahead of time. These generate interest and coupled with email notifications, it gives their customers something to look forward to.

To keep the retention flat, the Rewards program has “punishment” traits tied into it. If you’re not using the stars for visiting the cafes you start losing them. This psychological trick, known as The Endowment Effect , helps to nudge those people who are affected more about losing something they already have.

The Mobile part is one of the main drivers of customer retention and has proven to raise the average order size per customer. Since the frequency of orders and visits is so high, the LTV per customer contributes to that impressive double-digit growth in the first years.

Key takeaway #7 - APP A mobile app for a product that is being used on a daily basis and is in the lifestyle category is not a nice to have, but almost mandatory. If you want to stay a part of your customer's daily lives, bring the entertainment, rewards, and gamification to keep retention and customer satisfaction high. You will be rewarded with increased LTV.

The Success Flywheel of Starbucks

The easiest way to figure out and identify the success of a company is to apply the try-and-true framework. Jim Collins, the author of Good to Great, Built to Last claims all mega-successful companies have to figure out the Flywheel principle .

To become an unstoppable juggernaut in its own field, Starbucks had to align 5-6 different elements in three categories:

Disciplined People
Level 5 Leadership
First Who… Then What
Disciplined Thought
Face the Reality
Hedgehog Concept
Disciplined Action

Culture of Discipline

Leveraging the Technology

Imagine the concepts as drivers of one giant flywheel. Let’s say you’d want to move a giant stone wheel that sits on an axle. It would take a lot of effort to get it moving at first. After gaining speed it would need less and less power to keep it going. After gaining momentum, the same wheel would run on its own with little interaction. Just like the extremely simplified quote says; “If it ain’t broke, don’t fix it.”

Disciplined people - Starbucks Level 5 Leadership

Excerpt from Good to Great -> “Level 5 leaders display a powerful mixture of personal humility and indomitable will. They're incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self-effacing, quiet, reserved, and even shy. Every good-to-great transition in our research began with a Level 5 leader who motivated the enterprise more with inspired standards than inspiring personality.”

There’s no doubt, Starbucks CEO Howard Schultz possesses the characteristics and personality traits of a Level 5 leader. The ambition alone to introduce a new cultural concept in a new market sounds incredibly daunting, but to play it right with the shareholders, customers and their own people sounds impossible.

But that was the initial idea, a moral standard. The mission statement of Starbucks is:

“to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”

Let’s break this down into two pieces.

Inspire and nurture the human spirit .

The people, customers, and partners (staff) are the most important assets of any company. The first part of the mission statement explains that in a split-second. The relationships within the company have to be nurtured and supported while exuding warmth and friendliness.

Howard Schultz has shown respect for the mission by developing programs for their own people, which include free education, health insurance and even a share in the Starbucks company.

“One person, one cup and one neighborhood at a time .”

The second part stresses the importance of gradual improvement. Each interaction with a customer, each cup of coffee made hold a large amount of responsibility to deliver the right experience. The neighborhood part reminds the staff and the customers that the stores pay special respect and attention to the place where they are located.

In the article Inside Starbucks’s $35 Million Mission , author Sarah Kessler describes how Starbucks runs the “ Leadership Lab ” — part leadership, part training conference for 10,000 store managers.

Disciplined thought

Face the Reality — When stuff gets hard, leaders don’t turn away from the problem or worse, get busy with mundane tasks, deceiving themselves they are working. Closing your eyes to the reality means you’re on a great way to a downward spiral.

In 2008, Howard Schultz got reinstated by the board as CEO. The sales and shares were dropping. The brand and the culture of Starbucks were deteriorating rapidly. The magical experience was a shadow of its former self.

Schultz decided on a radical idea to close all the stores and retrain in order to inflict the importance of the Starbucks vision and mission. Tied into this transition was closing numerous shops and letting go of hundreds of employees. The ordeal cost the company 6 to 7 million dollars .

In 2018, Starbucks closed the doors again in order to put the staff through racial anti-bias training. The temporary closure cost the company between $15 - $20 million dollars

But it was necessary and long needed. The company picked up from the bottom just like in Drake’s song and has been rapidly growing in the world’s map as well as on index stock charts.

The Hedgehog Concept

The term Hedgehog concept introduced by Collins is some sort of a marriage consisting of a Venn diagram and three major ideas. Jim Collins thinks that in order to have a chance to be the best in the world you have to possess all three:

The Elite Skill - You will have to be the best in your area of expertise. Constant learning, innovating and moving the boundaries are expected from the movers and shakers of the world.
Deep Passion - Someone who grows a business will eventually (and continuously) encounter major obstacles where the skill isn’t going to be enough. The grit, powered with a deep passion and a reason why is arguably even more important than the knowledge alone.
Ability to generate revenue - Understanding of what drives the economic engine is the third piece of the puzzle that completes the concept. No business can survive without sustaining itself and its people financially.

Schultz possesses all three: the Stanford education armed him to become shrewd and dangerous in the business world with a deep understanding of the economic machine while he stayed in love with the company and continued to deeply care for its people and the customers.

The second part of the hedgehog concept is the sheer simplicity of your objective. When it comes to specializing and becoming the best in the world, you need one clear statement which completely prevails over all the others.

The hedgehog is the exact opposite of the fox concept. Foxes are cunning, smart and resourceful animals who take any opportunity to get ahead using any tactic they can think off. Yet when they encounter and attack the hedgehog, the hedgehog simply rolls up into a ball and protects itself with its spiky hide.

The hedgehog companies have one major driving goal that is ingrained as the cornerstone of its business. In Starbucks, it’s not the coffee quality, but it’s the deep desire to create an experience for their customers. Everything is tied into this.

Sometimes, achieving massive rapid growth for the growth sake reveals cracks in the system if it’s not solid. In 2008, when the company was on the decline, Schulz looked at the strategy of the past few years and, in a letter penned company-wide, explained that Starbucks had “invested in infrastructure ahead of the growth curve” and it was time to “shift our emphasis back onto customer-facing initiatives.”

Imagine, the Starbucks insane growth pace required to hire 1,500 new employees a week.

Disciplined action

The success of anything in our lives is in the hands of people. It always is the #1 element in any company.

“In determining the right people, the good-to-great companies placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge, or work experience.”

When the quality of the work started slipping. Schultz had to close down hundreds of shops for a training day. It was a necessary decision to refocus, restructure and boost Starbucks employees to work and deliver on the right things and to deliver the experience as it was intended in the first place.

When faced with a difficult customer or a problem, the Starbucks partners (employees) are taught customer service by using a L.A.T.T.E. system. The acronym helps baristas deal with any situation in the store.

L isten to the customer
A cknowledge the problem/situation
T ake actions and solve the problem
T hank the customer
E xplain what you did

The simple system isn’t there just to provide clear guidelines but it also boosts motivation and willpower among employers. In the book, The Power of Habit , Charles Duhigg wrote that the LATTE system prevented the customer service meltdown , and sustained willpower throughout the day.

In the end, customer service is there to deliver and exceed the experience which is tied to the brand. Nothing is as important as delivering the service.

“[Employees] are the true ambassadors of our brand, the real merchants of romance and theater, and as such the primary catalysts for delighting customers. Give them reasons to believe in their work and that they’re part of a larger mission, the theory goes, and they’ll in turn personally elevate the experience for each customer–something you can hardly accomplish with a billboard or a 30-second spot.” — Excerpt from book Onward, Howard Schultz

Technology Accelerators

For a globally recognizable brand like Starbucks technology plays a major role in the expansion. The Starbucks app and the emails alone played a significant role in the company’s growth.

According to Collins, technology accelerators have to be carefully selected. Companies had to sift through the emerging technology, identify and select the right ones and gradually introduce them in the business model.

The Hedgehog Concept would drive the use of technology, not the other way around — Jim Collins

Companies that jumped the gun burned badly.

In fact, Jim Collins discovered that more than 80% of great companies didn't rank technology as one of the top five ranking factors for success.

“Those that stay true to these fundamentals and maintain their balance, even in times of great change and disruption, will accumulate the momentum that creates breakthrough momentum. — Jim Collins

Down to the core, Starbucks has one secret ingredient to thank for — knowing their customers. Data analytics. According to Starbucks, this function uses “ methodologies ranging from ethnography to big data analytics … that help support Starbucks pricing strategy, real estate development planning, product development, trade promotion optimization, and marketing strategy.”

Starbucks contracts with a location-analytics company called Esri to use its technology platform that helps analyze maps and retail locations. It uses data like population density, average incomes, and traffic patterns to identify target areas for a new store.

The Crawl, Walk, Run Concept

The gradual introduction of technology is a part of the hedgehog concept. Technology is a major proponent of business growth however if it doesn’t tie into the one simple concept , the company has to be disciplined enough to say no to new opportunities.

Eventually, they can adapt the technology in their concept which turns the massive flywheel forward.

In Starbucks sense, they seem like they embrace technology. They started out with gift cards and pay-ahead mobile purchases. The next step was adding the Starbucks Rewards program to cultivate upsells and raise the LTV per customer. And today with big data, AI, and predictable algorithms they maximize the relationship with the customers.

Key takeaway #8 — the flywheel concept

Successful companies that persevered and thrived with time have found and adopted the Flywheel concept. Focusing on the essentials of the business, working with the right people in the right places, and maintaining discipline is the only way for continued sustainable growth.

Starbucks Vs the World

Competitors.

Starbucks enjoyed the blue ocean marketplace as a premium coffee culture experience provider.

But as soon as competitors noticed Starbucks discovering a new opportunity they had to react quickly. McDonald's and Dunkin’ Donuts were the big ones that introduced their own versions of coffee-to-go. Better than instant coffee and convenient while on the go, the two competitors did enjoy new revenue stream of introducing coffee; however, as companies, they had to keep the focus on what they are good at — McDonald's with their fast food burgers and fries and Dunkin’ Donuts with well… donuts. DD does serve coffee but had no intention to put more emphasis on it until the late 1990s .

Starbucks kept the lead in the coffee concept because of its focus on the coffee culture and holistic concept of their brand, especially customer service. This point can be seen as soon as you look at international markets. Dunkin' Donuts’ international revenue in 2018 contributed less than 4% of total sales, while roughly 30% of Starbucks' consolidated net revenues in the same period were attributed to markets outside America.

When international expansion goes right

When you get it right and you know you have the brand, processes, and culture down, you can move outside. When Starbucks expanded its adopted “Coffee culture” to new markets it could follow its own tracks again. In many countries, especially Asian nations the idea of a coffee culture was new, fresh, and exciting.

To overcome the culture gap, Starbucks sought partnership through direct investments and joint ventures instead of direct franchising . This solved two major problems.

First, they relied on local retailers who already had experience and experience in the local markets. They married the coffee culture idea with market research of the new areas to discover regional customers’ tastes and preferences. After that, they just had to deliver the employee training, workflows, and the product itself.

Secondly, they acquired and absorbed the entire pieces of coffee markets , such as Coffee Partners in Thailand and Bonstar in Singapore. All in one big swoop.

But even today a Starbucks café is opened every 15th hour in China. It already operates more than 3,000 stores in China and plans to add 2,000 more by 2021 . Seoul has the most Starbucks cafes in any city ( 284 ).

Starbucks is present in 6 continents and in more than 72 countries and territories. But it wasn’t always smooth sailing for the old Starbuck.

And when it doesn’t go so well

While Starbucks had amazing success in Asian countries, they hit a snag in Australia.

In 2008, they closed two-thirds of all stores.

The reason?

Australia is already known as one of the hardest markets to get into in the first place and they are very proud of their coffee culture. The flat whites, coffee art in ceramic lattes have been served for dozens of years at beloved local cafes and by baristas who knew what they are doing.

What Starbucks was doing in the United States was introducing the coffee culture in the new market because it was non-existent before. But in Australia, this model didn’t fit in at all.

In 2008, Starbucks closed two-thirds of all the stores. The prices of Starbucks’ relatively common-tasting coffee (compared to established coffee shops) were pricier than the local solutions and managed by young students who didn’t have the level of appreciation of either the coffee culture and/or Starbucks as a brand.

Key takeaway #9 — establish yourself

Follow the winning formula of developing the markets first and turning into a product innovator after you have established yourself. Forcing the innovation where it’s not perceived as such, is waging a losing battle.

Starbucks on Social Media

The website is simply designed with an intention to present the latest seasonal product in the Starbucks shops in the first fold. The focus of the homepage is also on advertising the Starbucks Rewards program.

According to SimilarWeb, it attracts 18.9M visits per month, with an average of 2 minutes and 3.2 page views per session. Starbucks site is the 9th top ranked site for Food and Drink category in the world

The Youtube channel was established at the end of 2005. After 16 years it managed to acquire 335,000 subscribers, which isn't’ that much if we take the size of the company into consideration.

The most successful videos are close to 10 million views; however, they are short, 15-seconds clips of the product. The channel moderators are not participating in the comment sections.

Luckily there’s not much competition on YouTube; however, as a highly visual channel, Starbucks could advertise their mobile app and Starbucks reward program using socially-conscious values, product innovation, or sustainability programs.

On the other hand, Instagram is doing absolutely amazing. Naturally, since the best Starbucks customers are the ones who have been using their mobile devices for ordering and participating in the Starbucks Rewards program

Starbucks Instagram uses a mix of images and video clips mostly displaying their well-designed cups. The posts are mostly re-shared (“regrams”) of other Instagram users. With this tactic, Starbucks incentivizes UGC (user-generated content), since Instagram users have the chance to be regrammed and have their Starbucks shot seen by 17.8 million followers.

Pinterest is another great visual platform where images are split into different categories: from coffee recipes, coffee photography to store designs and world-recognized Starbucks cups.

Pinterest receives 10+ million monthly views and has 443,600 followers.

Even though their daily support is dropping, Facebook is still being used as one of the channels where Starbucks shows its videos and posts.

On Twitter , Starbucks shares its globally conscious ideas, news, and stories about the company and its products. Twitter also serves as a chance to (as in Instagram) retweet other users’ posts.

Starbucks likes to reshare the positive messages of happy users who had a positive experience at one of their stores

Since Starbucks' success mainly lies in their visual branding, they use social media for their brand awareness and in a Facebook sense, pushing the mobile app downloads.

Key takeaway #10 — delegate your resources

When using social media, identify which social media platform brings the best results. If your users are primarily on mobile devices, Instagram would be a smart choice. Delegate your resources to the best-performing channel.

Starbucks Corp. has become a worldwide success by sticking to its hedgehog concept. The realization of being customer-centric in the practical, not just theoretical sense laid the foundation of expansion in North American markets as well as international ones.

When all of the decisions are catered to the concept of serving their customers, including using technology as accelerators, there’s nothing to worry about in their future.

Starbucks finds smart way to attract and retain workers

George Anderson

If you want another reason why people want to work for Starbucks, look no further than the company’s recently announced College Achievement Plan. Billed as a "first-of-its-kind program," the idea is to help thousands of part- and full-time workers at Starbucks to get their degrees without the strings typically attached to most employers’ tuition reimbursement plans.

In short, employees working at least 20 hours a week at company-operated Starbucks, Evolution Fresh, La Boulange, Seattle’s Best Coffee and Teavana stores may choose from more than 40 undergraduate programs offered through Arizona State University’s (ASU) online program.

Starbucks’ employees admitted to ASU as a junior or senior will earn full tuition reimbursement for each semester of full-time coursework they complete toward any of the 40 bachelor’s degrees offered by the school. Freshmen and sophomores will be eligible for a partial tuition scholarship and need-based financial aid for two years of full-time study (est. at $6,500). Workers will have no commitment to remain with the company past graduation.

"Supporting our partners’ ambitions is the very best investment Starbucks can make," said Howard Schultz, chairman, president and CEO of Starbucks, in a statement. "Everyone who works as hard as our partners do should have the opportunity to complete college, while balancing work, school and their personal lives."

According to Starbucks, 70 percent of its employees are either current or aspiring students. Michael Crow, president of ASU, expects upwards of 15,000 employees of the company to enroll in the university’s online degree program.

"Starbucks is going where no other major corporation has gone," Jamie Merisotis, president and CEO of the Lumina Foundation, a group focused on enrolling and graduating more students from college, told The Seattle Times . "For many of these Starbucks employees, an online university education is the only reasonable way they’re going to get a bachelor’s degree."

Starbucks College Achievement Plan – Starbucks
Starbucks Offers Full Tuition Reimbursement for Partners (Employees) to Complete a Bachelor’s Degree – Starbucks
Starbucks will pay tuition for many employees to finish college – The Seattle Times (tiered sub.)
Starbucks to Pay U.S. Workers to Get Degree From ASU Online – Bloomberg News

Discussion Questions

How will the Starbucks College Achievement Plan affect employee recruitment and retention at the company? Do you think Starbucks’ program will serve as a model for other companies or do you see a different approach gaining more corporate converts?

This is a refreshing idea given the general state of attitudes towards retail staff from big corporations and the war over higher minimum wages. Having never been a barista or employee of the company, I’m not sure why people choose to work there, but this will definitely give a boost to the talent pool the company has to recruit from.

It would be fabulous to see this inspire other large retailers to offer more benefits to lower-level staff and part timers, but it’s doubtful that it will provide any real inspiration. Most retailers and quick serve restaurants are focused on cost cutting, often at the expense of hourly workers, so this would be an unlikely giant leap in a new direction for others.

Brilliant step. Right message. right audience. Looks right to their customers. There is no down side.

Bravo, Starbucks! This program reinforces that Starbucks has a commitment to its employees. It will be a magnet for attracting and retaining talent. Barista jobs don’t pay a lot. This offering takes some financial burden off employees, while not costing the company a lot of money. This is a win for Starbucks’ employees and the company.

This is what I call “win-win-win” situation. Win for Starbucks, win for their employees and win for customers (Happy employees = happy customers). Way to go!

Excellent move by Starbucks. They are putting their money into not only their own future, but into the future of the youth of our nation. These people can become great leaders, but it possibly would not happen without the Starbucks jump-start.

Starbucks makes another great move. To sum it up; when you offer benefits like this, you don’t have to be satisfied with just getting the employees you need—you get to build a team made up of the employees you want.

We all know there is no free lunch. Of course workers have no commitment to remain with the company after graduation. Starbucks will not be obligated to keep the students employed, either. I’m guessing continuing employment while attending school would be mandatory and only the “keepers” would benefit.

This could work out well for employees Starbucks wants to keep around and I’m sure they would have no problem forking out some extra cash to low-wage employees who put out an exceptional effort. This is a clever idea of how to attract quality employees for a low wage.

Starbucks is most likely getting a quantity discount on tuition as well. I don’t see this as a charity give-a-way, but as a clever way to attract better-than-average workers. I can certainly see other companies who require a better class of employee trying something similar, and perhaps doing it one better.

What Starbucks has done is found an approach that will work for their associates. There will be a likelihood of success, or they wouldn’t be doing it. However, keep in mind, this meets their associate base of 70 percent or greater being current or aspiring college students. This is their base. It may not be right or a good fit for an associate base for other companies. Taking a “me too” approach isn’t always the best approach.

My guess is that they spent a considerable amount of time developing this approach and have done the research within their organization to project its outcome. Nevertheless, having a program doesn’t mean it is a guaranteed success. The retailer will have to have all else that goes with it. That is; flexible scheduling, days off, moral support, promotion and encouragement. There is more to it than just a policy in a handbook.

Starbucks, to their credit, already has all the other elements. That is why they have the associate base makeup that they do.

Who but Howard Schultz, who transferred the coffee commodity of yesterday into the most fashionable beverage of this age, would initiate the Starbucks College Achievement Plan in today’s economy? NOBODY!

Now Howard has created a new and better model for recruitment and retention. Expect the corporate sheep to follow Starbucks. That will be quite beneficial, but expect some price increases from competitors’ efforts.

Not only will this help Starbucks attract a higher-level employee, but it will continue to boost Starbucks’ image in society as well. While I don’t know the going pay for a barista, adding this type of perk, along with some kind of healthcare, is a great strategy for retaining loyal employees, upholding an image and creating loyal patrons. That’s my two cents.

Kudos! Let’s hope this starts a trend with other retailers. Some have questioned the value of such programs to companies because of the “risk” of losing their employees to bigger and better things once they have taken advantage of an education or self-improvement plan. I think what gets missed is that in addition to benefiting from “internally-grown” management candidates, there is the benefit of attracting job candidates who are wired with a passion for learning and improving. The time that Starbucks does have with these types of employees is probably a win in and of itself.

Excellent idea. But you know, there’s an expression in retail that goes like this; no margin, no mission. Kudos to Starbucks for making this happen—very admirable, but for many retailers without the luxury of monster margin, it’s a pipe dream. Carry the torch!

Both of my kids have worked for Starbucks and loved it. This new program ensures that SBUX will continue to enjoy an educated and motivated workforce. Genius.

This program will give prospective Starbucks employees another reason to join the company and it will definitely help the coffee chain to retain the best staff.

Investing in your employees sends a great message out to prospective employees and is a huge boost for the brand.

Is it serendipity or Karma that Starbucks is promoting free education the same week that ‘non-competes’ have become a hot topic?

I just wish Starbucks could train their cashiers to keep their fingers out of my cup and off the lid when they write down my order.

This is a brilliant idea at so many levels. First of all, it is an excellent perk for their employees, as so many of them are students. Second, it is fabulous as a retention and recruiting tool, as more people will want to work at Starbucks. Third, it obviously has incredible PR and social benefits with prospective customers and especially all of the extended families of the employees in question. The president of Arizona State expects around 15,000 Starbucks employees to take advantage of this opportunity, but this campaign will spread to every friend, family member, student and job seeker on a global scale. Mass-marketing heaven.

Unfortunately, I doubt that many other companies will follow suit because it really is a case of the strong getting stronger. Many other companies are simply focused on survival and cost cutting, and are simply not in a position to implement such a program.

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Starbucks has cracked the code on Employee Retention

We recently had a job opening on our implementation team. This is the team that helps on-board new clients and configures their platform so when we turn it over to them, they can get started immediately. It’s a great job with good benefits and the ability to work from home. It’s a great entry level position into the SaaS software industry because every SaaS company has some form of this position.

I reached out to two young women that are friends of my family or relatives to see if they would like this job. Both these women were interested but in the end stayed at their current jobs, which is a Barista at Starbucks.

Mind you this is a job that pays more, is professional, comes with benefits that match Starbucks benefits, and is work from home.

What is crazy is that both women had the same reason for not leaving Starbucks. Ready for the reason.

Paid tuition at ASU Online. Starbucks pays for their associates to attend a ASU online if they work a certain amount of hours per week.

I asked one of the young ladies about this and she mentioned that every week she gets an email with her assignments and she has to turn them by the next Monday.

ASU Online and Starbucks are geniuses.

Here is the kicker, the girls don’t interact with teachers, they don’t go to class online, they don’t have group work. They literally just get reading and assignments and then they complete them over the week.

ASU only has to create the classes, a one time expense, and then grade the work. Which I’m sure they use AI or Overseas labor to do. From ASU’s perspective, this is a 100% scalable business model that can accommodate 10,000’s of students per class simultaneously.

I went online and looked at what a credit hour cost at ASU online, it’s between $550 to $650 a credit hour for undergrad. You know that Starbucks is not paying retail for these course hours.

Both these young women looked at this single benefit of getting their college degree paid as too big to give up. Even though a hard look at the numbers would have shown that taking the job with us makes more financial sense even if they had to pay for these same credits on their own.

Something that a real college degree would have prepared them to do. I’m kidding but not really.

Obviously, this wasn’t a logical decision as much as an emotional decision. I personally think that being able to tell people that you didn’t pay a dime for college is a cool thing that people like to be able to say at parties.

I applaud Starbucks for figuring this out and providing this benefit to their teams. I can give them some feedback that it is working and I would love to hear from them what it has done for their retention.

To ASU I would say Bravo for creating a really scalable education model that appears to be providing value for your students.

I wish this was available when I was dropping a lot of money on my degrees.

Tommy Yionoulis

I've been in the restaurant industry for most of my adult life. I have a BSBA from University of Denver Hotel Restaurant school and an MBA from the same. When I wasn't working in restaurants I was either doing stand-up comedy, for 10 years, or large enterprise software consulting. I'm currently the Managing Director of OpsAnalitica and our Inspector platform was originally conceived when I worked for one of the largest sandwich franchisors in the country. You can reach out to me through LinkedIn.

Employee Retention Case Studies: How 5 Companies Leverage Our Employee Success Tech

Briggs Industrial Solutions & Frontline Worker Retention

Twin Cities Manufacturing Company & Targeted Engagement Analysis

Meritrust Credit Union & Retention Drivers

Mutual of Omaha & Pulse Survey Insights

Sammons Financial Group & Employee Listening Strategy

Quantum Workplace Can Help You See, Sense, and Stop Costly Turnover

Employee Retention Case Studies: How 5 Companies Leverage Our Employee Success Tech

Employee retention is a top 3 priority for 77% of HR leaders and 62% of senior leaders going into 2023. This is no surprise as the Great Resignation persists and another period of economic uncertainty looms.

But while retention is top of mind , many leaders admit their employee retention strategies aren’t very effective . Most say their organization’s approach is at the intermediate or beginner level.

Is your retention strategy effective? Take our quiz to find out >>>

If you’re not taking time to strategically address retention and turnover, you’re leaving a lot on the line. The good news is that a lot of unwanted turnover is predictable and preventable.

These employee retention case studies will give you hope. You’ll learn how these Quantum Workplace customers have optimized their employee listening strategies for employee retention. And how they’ve leveraged our employee success platform to uncover insights, build better workplaces, and retain their best talent.

Briggs Industrial Solutions Digs Deep with Frontline Workers to I mprove Engagement & Retention

Briggs Industrial Solutions began partnering with Quantum Workplace on their engagement survey in 2020, wrapping up their third engagement survey in 2022.

By taking feedback from the surveys and diving deep into targeted areas of the company via focus groups, Briggs has uncovered solutions and strategies to move the needle on areas that are impacting engagement and retention.

In 2021, Briggs was struggling to retain their technicians, who make up the majority of the company’s workforce. These technicians spend their days out in the field, traveling to customers and repairing equipment. They are critical to the success of the company. But most were leaving the company before they hit 3-5 years of tenure.

The leadership team at Briggs knew they needed to take a good look at what might be causing disengagement and turnover. Their engagement survey shed light on specific and actionable challenges to overcome:

Technician “intent to stay” dropped 5%
Perceptions of fair pay dropped 4%
Perceptions of recognition dropped 11%
Value of the ESOP dropped 11%

With the feedback received from engagement surveys, Briggs continued to evaluate benefits, compensation, and team structure across the board. They also worked to understand why techs were not feeling recognized for their contributions.

Leaders uncovered multiple areas to review. There was frustration around pay gaps between tenured and incoming employees. Work assignments weren’t always aligned with technicians’ strengths and skill level. And there weren’t clear guidelines on increased compensation for new skills and training assistance.

As a result, Briggs implemented profit sharing in 2022, in addition to ESOP. They created a career path for technicians, providing clarity on what they needed to do to grow, develop, and advance in their career. And finally, they provided more internal classroom training, rather than solely relying on senior technicians.

The changes the Briggs leadership team made led to impressive results on their next engagement survey:

Perceptions of recognition increased 17 points
“Senior leaders value people as their most important resource” increased 16 points
Perceptions of trust and fairness increased 14 points
Perceptions of fair pay increased 14 points

“Our industry is very competitive. It’s tough to hire skilled technicians,” says Perez, HR Manager at Briggs. “But we’re now hearing that Briggs is becoming the employer of choice in our industry. Our techs are talking and we’re seeing a ton of referrals now.”

When it comes to acting on survey results, Perez has this advice:

“Don’t try to boil the ocean,” she says. “You’re going to get a ton of feedback and a lot of things you want to act on–but you can’t do it all at once. You need to focus on what matters most. On what you can give your full attention to.”

Twin Cities Manufacturing Company Uses Targeted Analysis to Tackle Employee Turnover

As one of the largest privately held companies in the Midwest, this Twin Cities manufacturer has experienced exponential growth over the last several decades.

Coinciding with that growth, the company has evolved its employee listening strategy to capture and understand the employee experience. They partner with Quantum Workplace to implement engagement, pulse, and lifecycle surveys .

Engagement. The growing manufacturer deploys an employee engagement survey to uncover areas in which the company can move the needle. Leaders pay close attention to what is happening within specific business units and regions.
Pulse. The company uses pulse surveys to hear from employees at locations where acquisitions have happened. The goal is to make sure that new employee onboarding is effective, and employees have what they need to succeed.
Lifecycle. The company uses exit surveys to get a more holistic view of turnover.

With data from these surveys, the company can understand macro and micro turnover trends. They can also see how turnover affects different employee demographics and pinpoint reasons for turnover within specific groups. Exit survey analytics have helped the company uncover areas of misalignment and opportunity, including:

Creating more clarity on manager/employee workload expectations to help prevent unwanted turnover early in the employee journey
Better understanding compensation expectations in a competitive market

Survey analytics have also helped shed light on why critical roles and skill sets have left the company, and to uncover trends in areas of the business experiencing higher turnover.

“The labor market is really tight right now, and we get a lot of great intel from the surveys to help us improve the employee experience and understand why people might be leaving,” said the company’s Organization Effectiveness Leader. “In an industry where turnover is pretty high right now, it’s important for us to have this intel in order to stay competitive.”

Read more about this Twin Cities Manufacturing Company’s success here >>>

Meritrust Credit Union Use s Surveys to Understand Employee Retention Drivers

HR leaders at Meritrust Credit Union were focused on retention and turnover in 2022. They wanted to take a deeper dive into the reasons employees leave–and why they stay. Partnering with the People Insights Team at Quantum Workplace, they were able to uncover key information that shed light on just how critical company culture is to their retention strategy.

When asked to rate “it would take a lot to get me to leave this organization,” Meritrust followed up with a logic-based response based on how employees answered the question.

If they responded favorably, they were asked “what makes you stay at this organization?”
If they responded unfavorably, they were asked “what would make you leave this organization.”

Meritrust asked every employee a variation of the question and then turned the responses into a custom survey demographic. What did they find? The primary reasons people stay at Meritrust were:

Workplace culture (90%)
Career advancement opportunities (89%)
Relationship with their manager (84%)

This proved that culture and career growth are imperative for retention and engagement–something leaders at Meritrust had been trying to improve all along.

Mutual of Omaha Leverages Pulse Surveys to Un cover Insights and Retain Talent

A Fortune 500 insurance company, Mutual of Omaha was founded on a simple but powerful principle: to help people in their time of need and protect those they love the most.

In recent years, the insurance and financial services industries have become increasingly competitive for talent. Mutual of Omaha was having a hard time recruiting for technology roles—and was seeing high turnover within the first two years of employee tenure.

The company knew that having the right insights would help them understand and troubleshoot turnover effectively—so they turned to Quantum Workplace’s employee engagement platform .

Mutual of Omaha utilized a broad range of employee surveys to capture feedback at various stages of the employee journey. In addition to leveraging an annual engagement survey, Mutual of Omaha also launches regular pulse surveys to capture critical feedback on important topics.

In 2021, they launched a pulse to understand employee perceptions and preferences related to post-pandemic work arrangements.
In 2022, they launched a “War for Talent” pulse to get a feel for how equipped the company was (or wasn’t) to attract, engage, and retain top talent.

A strategic employee listening strategy has empowered Mutual of Omaha to gain clarity around what is driving people to stay, what is driving them to leave, and what leaders can do to improve retention and engagement. The company has seen measurable improvements:

94% favorability ratings from new hires after 30 days of employment
93% of associates making progress on a learning and growth plan (a key magnet in the company’s retention strategy)
86% employee retention rate

Read more about Mutual of Omaha’s success here >>>

Sammons Financial Group Increases Frequency of Employee Listening to Drive Change

Sammons Financial Group (SFG) is heavily focused on establishing a “workforce of the future” and best-in-class workplace culture. The company feels both are necessary to retain top talent in a competitive market. To support its retention and talent management efforts, SFG uses employee listening tools from Quantum Workplace.

Initially, SFG’s survey implementations were infrequent, happening only every 2-3 years. Years later, they had a big question:

“What are we actually doing to understand employee voice?”

The company realized employee voices needed to be captured more frequently to achieve a more accurate, timely view. After shortening their engagement survey cadence to 18 months, SFG’s employee engagement efforts started gaining momentum. The company saw an increase in engagement and a stronger organizational commitment to action. The progress led to leadership buying into an annual survey.

With a regular cadence of employee listening, SFG gains a true year-over-year understanding of employee voices—and can design annual commitments around this timing to better align with opportunities uncovered in the survey data.

Prior to moving to an annual survey cadence, one of the challenges SFG faced was understanding how to best utilize their data. Now, SFG can equip organizational leaders with the data they need, on a more frequent basis, and understand where to act. They have the potential to activate real, meaningful change when it comes to engagement and retention.

Read more about Sammons Financial Group’s success here >>>

Quantum Workplace Can Help You See, Sense, and Stop Costly Turnover

With the right intel, insights, and a roadmap for change, you can build a culture that draws in and retains your best talent. Quantum Workplace offers employee retention solutions to help keep your top talent engaged and on the path to success—making them more likely to stay.

Learn How to Keep Your Best Talent by approaching retention with intention in this eBook.

Improve your employee retention strategy in this eBook on How to Keep Your Best Talent

Published December 9, 2022 | Written By Kristin Ryba

The Best Employee Retention Survey Questions

Employee Retention Quiz: Retention with Intention

4 Types of Employee Turnover You Need to Analyze

15 Employee Turnover Statistics To Shape Your Retention Strategy

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Starbucks: A successful gamification case study

Starbucks’ gamification wasn’t there from the beginning of its story but it made it a success. Starbucks’ first store was inaugurated in 1971 at the Seattle Pike Place Market. Entering the shop, you were able to find fresh coffee beans, tea, and spices from around the world. According to the company, this flavour journey and the coffee trade traditions are used during this flavour journey and the coffee trade traditions are, according to the company, at the origins of the name “Starbucks”. This Mobi-dick character name reflects perfectly the worldwide ongoing success. By 1987, Starbucks had become a coffeehouse and it expanded to Chicago, Vancouver, and other cities across north-America. Later on, It opened stores worldwide like in Japan, Europe, and China. Hence, nowadays, Starbucks is the meeting place for millions of customers each week. Let’s discover the marketing secrets of such success!

I. Engaging the Senses: Starbucks’ Gamification Strategy Unveiled

A. Gamification in Loyalty Programs

Gamification has emerged as a popular strategy to revitalize loyalty programs and make them more engaging for customers. Starbucks is one company that has successfully implemented elements. Such Elements are reward points for purchases, level-ups based activities, and challenges for customers to complete. As a result, Starbucks has seen a significant increase in customer retention. Their customer retention rate is of 44%, significantly higher than the industry average of 25%. The gamified loyalty program has also increased customer engagement. Customers are more likely to make repeat purchases and try new products. In fact, they are incentivized through the gamification elements to reach new levels and earn rewards. Businesses can benefit greatly from incorporating gamification elements into their loyalty programs. Gamification marketing keeps customers engaged, happy, and coming back for more.

B. Star Dash and Starbucks for Life

Starbucks has introduced two popular loyalty programs to incentivize customers and increase customer engagement. The Star Dash program encourages customers to visit Starbucks more frequently. It offers bonus stars for a certain number of purchases made within a specific timeframe. While the Starbucks for Life program provides customers with the chance to win free coffee for a year, a month, or a week by completing challenges and earning game plays. So, by incorporating gamification elements and offering unique rewards, Starbucks has created an immersive and entertaining experience for their customers, keeping them engaged and coming back for more. These innovative programs have increased customer retention, engagement, and satisfaction, establishing Starbucks as a leader in the coffee industry.

C. Summer Game, Starland, and Roastery Challenge

Starbucks has created other even more innovative gamified loyalty programs to enhance customer engagement and satisfaction. The Summer Game program incentivizes customers to win prizes by completing unique challenges, while Starland enables customers to collect stars and earn rewards by making purchases. Launched during the pandemic, Starland provided a fun and interactive way to connect with the brand during a difficult time. Finally, the Roastery Challenge is a VR and AR experience that encourages customers to explore Starbucks’ roasteries, enhancing their knowledge and interest in the company. These programs, alongside Star Dash and Starbucks for Life, have successfully established Starbucks as a leader in customer engagement and retention.

II. The Café Games: Starbucks’ Use of Gamification Inside Shops

A. Coffee Education

Starbucks uses gamification techniques to make the coffee education experience more interactive and enjoyable. In the Coffee Passport program, customers earn stamps for trying different coffee blends and receive a free coffee bag once they fill up their passports. Also, the Coffee Master program for baristas incorporates gamification by using badges to reward achievements in coffee knowledge, brewing techniques, and tasting skills. Baristas who complete the program earn a special black apron. Finally, in the Coffee with a Barista program, customers attend virtual or in-store sessions to learn about coffee brewing techniques and participate in a quiz to win a free drink.

B. Interactive Art

Starbucks uses gamification techniques to increase customer engagement and foster a sense of community within its stores. The “user-generated content” gamification element is used in the chalkboard mural where customers are encouraged to interact with the brand by drawing and writing messages. Similarly, the “social interaction” gamification technique is employed through the use of community tables to encourage customers to engage with each other through conversing and playing together. Finally, the “progression and rewards” gamification element is used in the digital flywheel program. It is a gamified loyalty program that rewards customers for their purchases with progress bars, rewards badges, and personalized offers. These techniques provide customers with a sense of achievement and reward, motivating them to keep engaging with the brand.

C. Digital Games

Starbucks has created several digital games that use gamification techniques to engage customers and increase loyalty. “Starbucks Pairs” is a memory game featuring Starbucks products that can be played on mobile devices. Players earn rewards for completing the game, such as discounts on their next Starbucks purchase. “Starbucks Bingo” is another popular game that encourages customers to make multiple purchases. Customers fill out their virtual bingo cards and earn rewards. Finally, the “Starbucks Nitro Cold Brew Game” incorporates a unique element. This game requires players to physically shake their phones to create a virtual Nitro Cold Brew. The game rewards players with discounts on their next purchase. All three games utilize gamification elements such as rewards, progress bars, and personalized offers. This strategy incentivizes customer engagement and increases brand loyalty.

III. Brewing Success: Starbucks’ Gamification & Partnerships

A. Pokemon Go Partnership

Starbucks partnered with Pokemon Go to transform their stores into PokeStops and Gyms, encouraging customers to visit, catch Pokemon, and battle other players. Accordingly, they added gamification elements like badges, rewards, and time-limited challenges to make the experience more engaging. Customers can earn rewards like free drinks or merchandise by completing certain tasks or winning challenges. Therefore, this innovative strategy successfully blends physical and digital worlds to create an immersive experience that keeps customers coming back for more.

(Discover Pokemon Go gamification techniques)

Starbucks and Spotify ‘s innovative partnership incorporates gamification elements to offer a unique customer experience. It offers a music trivia game that rewards customers with free music downloads. Indeed, Starbucks encourages customers to engage with the brand and showcase their knowledge and enthusiasm for music. The interactive game successfully promotes brand engagement and loyalty. Additionally, Starbucks could enhance the experience further with additional gamification elements like leaderboards and badges. Overall, Starbucks and Spotify’s partnership successfully blends brand engagement with a fun and interactive game, creating an exciting and memorable experience for customers.

C. Coca-cola

The Coca-Cola Arctic Home campaign is a successful partnership between Coca-Cola and Starbucks. It creatively incorporates gamification elements to promote environmental awareness and raise money for the World Wildlife Fund. By purchasing specially designed cups featuring polar bears, customers can donate to the WWF while enjoying their favourite drinks. Furthermore, customers can participate in a virtual polar bear hunt game on their mobile devices, earning points for prizes through the simple yet engaging technique of shaking their phones. This campaign is a prime example of how gamification can be utilized to promote positive causes while creating an interactive and memorable customer experience.

Conclusion:

In conclusion, Starbucks’ success story is a result of its innovative marketing strategies. They are including gamification techniques to increase customer engagement, retention, and satisfaction. By incorporating gamification elements in loyalty programs, inside stores, and partnerships, Starbucks has created an immersive and entertaining experience for their customers. It resulted in making them one of the leading companies in the coffee industry. Basically, through the use of rewards, progress bars, and personalized offers, Starbucks has successfully motivated their customers to engage with the brand, fostering a sense of community and loyalty. Other businesses can learn from Starbucks’ gamification strategies and implement them into their marketing plans to increase customer engagement and retention.

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Starbucks—The 'Coffee House' Experts: A Case Study in Cultural and
The chief executive officer of Starbucks corporation, Howard Schultz, considers that the tip of success in Starbucks is not coffee but employees. Constantly accumulating the working experience of employees and providing chances of promotion in a company for working partners is the way to operate sustainability.
Human Resource Policies and Work Culture: A Case of Starbucks
Abstract: This paper discusses a case study on human resource management policies and work culture at. Starbucks. Starbucks view its employees as a competitive advantage which required strategic ...
PDF Strategic Analysis Of Starbucks Corporation
Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is a premier roaster, marketer and retailer of specialty coffee around world. Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries. Their product mix includes roasted and handcrafted high-
Starbucks Employee Engagement
Initiative. Purpose partnered with Starbucks to unearth insights about what was holding store employees back from participating in global social impact initiatives, and determine what might motivate them to take part. Through polling, focus groups, interviews and landscape reviews, Purpose developed a bespoke engagement strategy for Starbucks ...
Research on Employees' Career Development: Case of Starbucks ...
The current study is designed to research employees' career development and employee retention rate, and the Starbucks Corporation as a case reference. Thirty participants who are having working experience 3 months and above have been recruited for the current study. As a section of participants, purposive sampling
Starbucks Corporation: Case Study in Motivation and Teamwork
Briefly explain, in your own words, the three principles that Starbucks implement in motivating their employees. (9) 8) Management needs to commit to certain aspects in order to empower employees. List four of these aspects. (4) TOTAL: 50 f. Starbucks Corporation: Case Study in Motivation and Teamwork.
How Starbucks's Culture Brings Its Strategy to Life
How Starbucks's Culture Brings Its Strategy to Life. by. Paul Leinwand. and. Varya Davidson. December 30, 2016. In most organizations, culture and strategy tend to be discussed in separate ...
Research on Employees' Career Development: Case of Starbucks ...
The current study is designed to research employees' career development and employee retention rate, and the Starbucks Corporation as a case reference. Thirty participants who are having working experience 3 months and above have been recruited for the current study. As a section of participants, purposive sampling has been used as a sampling ...
Role of Managers in Employee Retention: A Case Study on Starbucks
1.3 Research Objectives To identify the role of managers in staff retention To analyse the challenges faced by Starbucks in relation to Talent Management To propose ways by which Starbucks can resolve its issues in staff retaining 1.4 Significance of the Research The researcher significant as a duly support investigator in gaining an understanding of the
Analysis of Starbucks Organizational Culture on Employee Motivation
This paper discusses a case study on human resource management policies and work culture at Starbucks. Starbucks view its employees as a competitive advantage which required strategic management ...
Strategy Study: How Starbucks Became Everyone's Cup Of Coffee
This is my giant case study on how to achieve world domination in case you want to bring an old product to the new market. {{cta('eed3a6a3-0c12-4c96-9964-ac5329a94a27')}} ... Starbucks Master Example of Mobile Retention and App Rewards ... restructure and boost Starbucks employees to work and deliver on the right things and to deliver the ...
PDF Research on Employees Career Development Case of Starbucks ...
The current study is designed to research on employees' career development and employees' retention rate, with Starbucks Corporation as a case reference. Based on the research problem stated above, the objectives of the current study are then designed by the following: 1.3.1 To identify the employees' career development of Starbucks ...
How Starbucks Brews Its Workplace Culture: A Guide to Employee
Workplace culture could either be a boon or bane for a company's success. When organisations put efforts in turning its visions and values into meaningful culture and infuse it to the workforce, this will result in loyal, highly-engaged, and goal-driven employees. That being said, workplace culture could be a powerful tool to engage and retain talents in the longer term. However, recent ...
Analytics of Employee Withdrawal Behaviour and Turnover: Starbucks
Journal of the International Academy for Case Studies, 29(2), 1-7. Abstract. ... In terms of employee retention, Starbucks employees in the Customer Success and Finance departments are expected to remain at the company, while employees in the Design and IT departments are most likely to leave their jobs and increase employee turnover rate. ...
Starbucks finds smart way to attract and retain workers
Bravo, Starbucks! This program reinforces that Starbucks has a commitment to its employees. It will be a magnet for attracting and retaining talent. Barista jobs don't pay a lot. This offering takes some financial burden off employees, while not costing the company a lot of money. This is a win for Starbucks' employees and the company.
Our commitment to Inclusion, Diversity, and Equity at Starbucks
We are committed to publicly sharing our current workforce diversity. ( View Public Data ). We will set annual Inclusion and Diversity goals based on retention rates and progress toward, achieving BIPOC representation of at least 30% at all corporate levels and at least 40% at all retail and manufacturing roles by 2025.
Human Resource Management Case Study: Starbucks
This includes pay, health benefits, sick leave, bonus, retirement plan etc. the wages paid among Starbucks employees were the highest in the industry. When it comes to employee retention it is significant that how Starbucks has fought against the huge turnover which occurred in 2000's in the retail sectors were close to 200 present.
Case Study Of Human Resource Management Of Starbucks
This case study to be analyzed is "Starbucks' Human Resource Management Policies and the Growth Challenge". In this case study include introduction about Starbucks, how did Starbucks find out and catch the attention of right kind of people, the work of human resource management in creating a helpful work culture, study on Starbucks ...
Starbucks has cracked the code on Employee Retention
Both these women were interested but in the end stayed at their current jobs, which is a Barista at Starbucks. Mind you this is a job that pays more, is professional, comes with benefits that match Starbucks benefits, and is work from home. What is crazy is that both women had the same reason for not leaving Starbucks. Ready for the reason.
Starbucks Retention Score
Starbucks' Retention score is rated a "B" by 2168 employees. The category helps understand Starbucks' focus and commitment to retaining employees in their organization. Over the past three months, Starbucks' Retention score has remained steady at 72/100. Starbucks ranks in 2nd place versus 5 competitors which include Whitbread, McDonald's ...
Employee Retention Case Studies: How 5 Companies Leverage Our Employee
The company has seen measurable improvements: 94% favorability ratings from new hires after 30 days of employment. 93% of associates making progress on a learning and growth plan (a key magnet in the company's retention strategy) 86% employee retention rate. Read more about Mutual of Omaha's success here >>>.
Starbucks' Customer Management Case Study
Starbucks' Customer Management Case Study. February 19, 2024; Starbucks, once a single storefront in Seattle, has burgeoned into a global coffee powerhouse, renowned for its quality brews and exceptional customer service. ... This inconsistency was a symptom of broader operational challenges, including employee training and retention issues ...
Starbucks: A successful gamification case study
In conclusion, Starbucks' success story is a result of its innovative marketing strategies. They are including gamification techniques to increase customer engagement, retention, and satisfaction. By incorporating gamification elements in loyalty programs, inside stores, and partnerships, Starbucks has created an immersive and entertaining ...
Assessing the Effect of Compensation Packages, Work-Life Balance
In today's competitive business environment, Micro, Small, and Medium Enterprises (MSMEs) face significant challenges in attracting and retaining top talent. This study examines the impact of compensation packages, work-life balance policies, and career development opportunities on employee retention within MSMEs. Using a quantitative research design and Partial Least Squares Structural ...
NLRB judge says courts must decide Starbucks' challenge to agency's
The case is Starbucks Corp and Workers United, National Labor Relations Board, No. 15-CA-296254. For Starbucks: Emma Chase-Swartz and Charles Powell of Littler Mendelson