Customer Satisfaction Profit Chain
Starbucks: Delivering Customer Service
 Why successful
• Tight alignment between target market (sophisticated, affluent coffee lover, coffee drinking life style) and highly differentiated value proposition
– Drinking coffee as self-indulgent ritual: Best coffee
– Tendency to linger, in search of a sanctuary: Physical environment
– Friendly people, social interactions: Service Philosophy
 Impact of growth strategy
• Retail expansion: Ubiquity of stores makes Starbucks less “special”
• Customer acquisition: New customers with different service needs
– Routine
– Pass through
– Convenience
• Product innovation: Increased production complexity leads to longer lines
Starbucks: Delivering Customer Service
 Consequence
• Conflicts between customer segments affects service quality
– Longer lines, more mistakes, less time to interact and socialize
– Grumpy customers, grumpy employees
• Difficult to keep customer satisfaction very high with a larger and more diverse customer base
 What are the appropriate metrics to manage different customers or customer segments? Customer acquisition and retention?
Realities of B-to-B Contexts
 Increasing supply chain integration
 Outsourcing
 Account concentration, reduction in number of suppliers
 Integrated product / service offer
 Key account management and global account management
Need for strategic relationship approach


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