Starbucks Customer Relationship Management - Essay Example

Starbucks CRM Recommendations report EXECUTIVE SUMMARY journey mapping and the highlighting of touch points in a business is an important aspect of the modern day business world. Companies are expected to study the experiences of their customers and provide products according to the preferences of the customers. The existing gaps in the products and services provided should be rectified through formulation of key remedies that are implemented accordingly. The IDIC framework is one of the widely used models in CRM due to its ability to provide proper analysis of the various touch points. TABLE OF CONTENTS 1. Introduction………………………………………………………………………….……4 2. IDICframework………………………………………………………………………..….5 3. Criticalanalysis………………..………………………………………………………...…6 4.Recommendations…………….………………………………………………...................10 5. Implementationplan……………………………………………………………………….11 6. Conclusion…………………....……………………………………………………………11 7. References…………………………………………………………………………………12 1. INTRODUCTION Starbucks Corporation is a global company that deals with providing high-quality services in the coffee business in the world. The coffee beverage company is located in Seattle, America. Starbucks has coffee chains all over the globe including the United Kingdom, Japan, and China. The company is widely recognized for its powerful customer care that has enabled it to enjoy customer loyalty in the beverage industry (Jargon, 2009). In reference to Keightley (2014), the act of customer journey mapping is an important method used by many organisations in order to visualize the real experience of their customers. A touch point describes the interface of a brand with the customers.In the process of an interaction, it enables the company to understand how customers visualize the company’s products in their journey. In accordance with my previous assignment, I highlighted several touch points in terms of customer experience whether positive, neutral or negative. In this report, the touch points with a baseline or a negative experience have been analysed. The recommendation report aims to narrow down on the effectiveness of the touch points and the necessary measures that should be carried out in order to achieve the business objectives of Starbucks. The process of implementing the suggested remedies is clearly outlined in the last sections of the work. The IDIC framework that has been used to analyse the effectiveness of the touch points is well known to render excellent results in terms of customer relationship management. 2. IDIC FRAMEWORK In reference to Onut et al. (2002), the IDIC framework incorporates several stages that include: 2.1 Identify the individual customers. The first step in this model includes the ability to reach out to the customers on an individual basis. The type of relationship developed here ensures that the business enterprise identifies its loyal customers. It does not mean that you need to know them by names but aims at finding a way to ensure that the same customer comes back for the product another day. 2.2 Differentiate customers The customers differ from each other in terms of their value to the business. This means that for a company to achieve proper customer relation management, the customers have to be identified and categorized accordingly in terms of their needs and preferences. The ability to differentiate customers ensures that companies streamline and narrow their operations to the needs of these consumers. 2.3 Interact with customers. In accordance with Peppers and Martha (2004), the third stage of the IDIC model is forming an interaction with the customers. A good relationship as already known thrives when there is continued interaction between parties. However, the interaction that is developed has to be cost effective and should not pose challenges to either party in terms of retrieving the information. Regardless of the interactions being cheap, it is important to ensure that they are effective, and the aim of developing a relationship is not lost in the process. 2.4 Customize for customers. This is the final stage of the IDIC model. It ensures that the products offered to the customers are designed in such a manner that they fit their specific needs. The process of serving each customer in a different manner from the other on the basis of the differences noted in the second step is referred to as customisation. It is the payoff stage in the management of customer relationship. 3. CRITICAL ANALYSIS This recommendation report wishes to focus on the following touch points that were mapped for Starbucks Corporation: 1. Finding a Starbucks café. 2. Queuing. 3. Having a look through the menus. 4. Regular emails about promotions, adverts, and festival greetings. 5. Waiting for the drinks. 3.1 Finding a Starbucks café Most individuals who are new to a town find it difficult to locate them due to the busy traffic in the streets. This touch point has a negative experience during the customers’ journey In reference to Spaeder(2015), the location of a business enterprise should be easy to find. The lack of easy access to a business premises can result in the inability to acquire and retain customers who might find it difficult to locate the premises. Portman and Steingold (2005) argue that in order to build a good relationship with customers and retain the existing ones, business premises should be equipped with adequate parking space. In accordance with Litman (1999), a good location for a business ensures that it is well served by means of public transport such as taxis and buses. Finding a Starbucks store can prove to be quite a challenging task to many consumers. The neutral experience in the touch point is enough proof that a good and a strategic location is key in order to ensure that Starbucks Corporation continues to retain its customers and even attract the potential customers. Spaeder(2015) argues that it is high time any new entrepreneur puts the location of his or her business on top of their to-do list. The business should identify its customers and learn their preferences. In response, the business ought to set up the premises in a location where its customers find it relatively easy to access either by the public transport or by their private vehicles that are guaranteed of ample and secure parking. In agreement with this theory, easy access to a premise is equally important in customer retention as the provision of high-quality services or products. 3.2 Queuing This touch point has a negative experience in most of the Starbucks consumers’ journey. Many individuals do not prefer traditional methods of acquiring services in a business. Queuing often results in the loss of loyal customers who find it useless to waste quality time in the long queues. In reference to Yina et al. (2012,) lack of alternative ways of attending to customers is one of the reasons as to why a negative relationship develops between a customer and the business. In accordance with Maister (1988), lengthy queues result in derailed provision of services which is key to destroying the relationship between a company and its customers. The negative feedback in terms of this touch point is a clear indication that the customers are not happy with the slow process of acquiring a product they have purchased. In reference to Borade (2012), a company in the beverage industry such as Starbucks should ensure that the management comes up with a better strategy that will be applied to provide services to their customers quickly. Jeffrey and Cathy (2005) argue that as a result of the characteristics of the fast food and beverage industry that incorporates fast services, a company should provide quick services by doing away with the lengthy queues. 3.3 Having a look through the menus. As noted during the customer touchpoint mapping, first-time customers to Starbucks have to go through the menus while they are still in the queues. Lack of a proper welcoming gesture by the workers for suchcustomers results in the inability to build a vital relationship. The customers do not feel valued by the company, and they would easily move on to another company due to their inability to develop loyalty. Chandon et al. (2005) argue that the service perception of customers does not necessarily influence the total sales made by a business. Such theory is entirely wrong. The minimum sense of dissatisfaction in the customers is responsible for the lack of customer loyalty which results in reduced sales. 3.4 Regular emails about promotions, adverts, and festival greetings. In reference to Perera et al., (2012), Starbucks carries out regular promotions, new product advertisements and festival greetings to its customers via the emails obtained from their recorded personal details. Andrew (2010) argues that email promotions ensure that a relationship is developed between a company and its customers. In the process of interaction in the IDIC framework of CRM, a good interaction between a company and its customers occurs when there is consistent and frequent communication such as this touchpoint mapped in Starbucks. In reference to Leigh (2015), email promotions enhance cost efficiency for the company that uses them and renders key updates to the loyal customers. However, Forneris (2015) adds that email communication is subject to misinterpretation and spam. The process of using the customer’s data to send unauthorized emails can be considered as infringing into personal privacy thus causing destruction of customer relationships. 3.5 Waiting for the drinks In reference to Gallaugher and Ransbotham (2010), once the Barista takes in the order and accepts the cash or credit card, the customers have to wait as their coffee is being processed. As the flexibility of modes of payment promotes the development of a good relationship and loyalty, the process of waiting for the cup of coffee can be equally exhaustive. In reference to Borade (2012), the services offered by a company’s workers have to be efficient. Inability to provide customer services such as the delivery of the product to the customer’s table results in the customer feeling not valued by the company. 4. RECOMMENDATIONS. This section will formulate the relevant recommendations in order to enhance the customer relationship and fill in the gaps in Starbuck’s customer loyalty. In the negative experience, when finding a close Starbuck’s café, the report proposes that the company’s IT department updates clear directions on the social media accounts such as Facebook. In reference to Holmund (2006), good and clear directions should be given to customers, and the management should not assume that everyone knows the exact location of their business. Queuing is the second touch point that had a negative experience in the customer’s journey. Starbucks should embrace home delivery services of their products to avoid unnecessary crowding of their cafés. Marrs (2014) states that a good delivery system ensures time utility where customers access their purchased products fast enough thus enhancing loyalty and trust. In order to acquire new customers, the company’s staff should assist first-time customers who might be stranded in finding the most suitable recipes on the menu. Marrs (2015) recommends that a company should be ready for its customers and serve them accordingly all day. In the fourth touch point, Starbuck should ensure that before using the customers’ email addresses for promotion, it should follow proper informed consent to prevent misinterpretation and to infringe on their privacy. In the case of long waits for order processing, Starbucks should embrace an efficient system such as home delivey that observes fast service provision, and is flexible to the customers’ requests in order to enhance customer relationship and loyalty. 5. IMPLEMENTATION PLAN To solve the problem of long delays in service provision, Starbucks will embark on hiring more employees in January. The hired employees will undergo training from February to March in order to equip them with necessary customer care skills. The skills obtained will eliminate the problem of stranded customers who cannot understand the products on the menu. From April to December, provision of directions, home delivery services, and obtaining informed consent will be emphasized. The three recommendations are continuous and require to be embraced by the company in their policy. The IT department should observe the recommendations of stranded customers on social sites and offer appropriate directions on a routine basis from April to December. A good home delivery system should be formulated by the management with several vehicles where the services reach the customers on a daily basis from April to December. Also in the same timeline, Starbucks should ensure that the customer details recorded on a daily basis are not used against the customer’s will. During this time, the clerk should inform the customers on the intention of the company to use their data for various promotions and new products on offer. The sequence of implementation is outlined in the Gantt chart below. Starbucks recommendations implementation plan for January-December 2015 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Employee hiring Employee training Provision of necessary directions to stranded customers. Home delivery services to curb queuing. Obtaining customer Informed consent on intended email address use. 6. CONCLUSION Greenberg (2009) states that for or any business in the dynamic and competitive industry to achieve its objectives, it has to develop a good Customer relationship management (CRM) framework. According to Finnegan et al. (2007), the ever-changing business environment demands a strong customer care strategy in order to maintain customer loyalty and build vital relationships with the customers. A huge base of loyal customers has proved to be a vital element in ensuring that a company’s product sales are constant. Customer journey mapping should, therefore, be carried in order to identify and understand the preferences of the customers they serve. Upon proper application of the suggested recommendations in accordance with the implementation plan, Starbucks Corporation will continue to enjoy a wide base of loyal customers. 7.0 REFERENCES Andrew H. (2010). Advantages and Disadvantages of Internet Promotion. The Best of Basildon. October, 29. Borade G. (2012). History of the Fast Food Industry. Fast Food. March, 31. Chandon P., Morwitz V.G. and Reinartz W.J. (2005). Do intentions really predict behavior? Self-generated validity effects in survey research. Journey of marketing, pp.1-14. Finegan D. and Willcocks L. (2007). “Implementing CRM: From Technology to Knowledge”. New Jersey, John Wiley & sons. Forneris J. (2015). The Disadvantages of Email Marketing. Small Business, Demand Media. Gallaugher, J. and Ransbotham, S. (2010). Social Media and Customer Dialog Management at Starbucks. MIS Quarterly Executive. 9 (4). Pp197-212. Greenberg P. (2009). CRM at the Speed of Light (4thed.) McGraw Hill pp. 7. Holmund E. (2006). “Why is it so important to give good directions (3rded.)”. Eric’s tips: Online Business Academy & Internet Marketing Resource Centre. April, 25. Jargon J. (2009). “Starbucks Takes New Road with Instant Coffee ”. The wall Steet Journal. Jeffrey S. and Cathy A. 2005 Hostipitality Strategic Management, New Jesey: John Wiley and Sons. Keightley S. (2014). The Importance of Customer Journey Mapping. Digital Marketing Media 1(1), 23. Leigh R. (2015). Advantages and Disadvantages of the Use of Email as a Business Communications Tool. Demand Media. Litman T. (1999). “The Costs of AutomobilDependancy and the Benefits of Balanced Transport” Victoria Public Policy Institute. Maiste D.H. (1988). Managing Services: Marketing Opeations and Human Resouces. Practice Hill. Marr S. (2014). “The Importance of Timely Delivery to Customers”. Business Proverbs. March, 03. Marr S. (2015). “Are You Ready to Respond to Customer Demands at Any Time?” Business Proverbs. April, 21. Onut S., Erdeml and Hosver B. (2002). “Customer Relationship Management in the Banking Sector and a Model Design for Banking Performance Enhancement”. Yildiz Technical University, Istanbul, Turkey. Peppers D. and Rogers M. (2004). “Managing Customer Relationships: A strategic Framework” New Jersey, John Wiley and Sons. Perera, L. C. J. et al. (2012). Effects of the 2007 Financial Crisis on Starbucks. Journal of International Business Strategy. 12 (1). Pp19-29. Portman J. and Steingold F. (2005). Negotiate the Best Lease for Your Business (2nded.) Attorney. Spaeder E.K. (2015).“How To Find The Best Location”. Entrepreneur Media. Yina L., Musalem A., Olivares M. and Schilkrut A. (2012).Measuring the Effect of Queues on Customer Purchases. YLU-Paper. September, 27. Read More