In his keynote speech to NRA Show attendees Sunday, Starbucks CEO Howard Schultz addressed the importance of balancing social responsibility and customer service with efforts to grow same-store sales.
Schultz first joined Starbucks in 1982, when the chain had only four stores. His dream was to create “the kind of company that our parents never got to work for,” he said. When the company went public in 1992 with 125 stores, it was the beginning of a long period of success for the coffee chain, during which “everything we touched turned to gold.” But speedy growth coupled with the nation’s unstable economy eventually led the company to put most of its efforts into growing same-store sales and stock prices. “The company began to measure and reward the wrong things,” Schultz said.
In 2008, Schultz gathered all of Starbucks’ store managers for a meeting in New Orleans, during which he laid out his plan to bring back the focus on strong customer service and community engagement on which the company had been founded. In 2009, all stores were closed briefly for retraining in an effort to make sure all employees were properly trained and that product quality was consistent across all locations.
“Great brands, great companies, great store experiences are very resilient, because the customer can remember what it was like. And they’re longing for it to come back,” Schultz said.
After renewing its commitment to quality and customer satisfaction, the company’s sales began to rebound and 2011 brought “record revenue, record profit, record stock price — the same in fiscal ’12.”
Here are three key lessons from Starbucks’ overhaul:
Connect with customers.
“We want to create a connection with our customers that’s not based only on trying to ring the register but demonstrating a heartfelt commitment to communities we serve and where our customers live,” Schultz said. Social responsibility efforts, such as the company’s Create Jobs for USA campaign, are a cornerstone of Starbucks’ culture because they make the company’s values apparent to the customer. “The customer wants to support those companies whose values are compatible with their own.”
Store managers are essential to the company’s success.
“The store manager sets the tonality of his or her store. And I think that starts with the people that he or she hires. … We have to be sure that we’re hiring the kind of people that is consistent with the brand of Starbucks,” Schultz said.
“We want happy people, we want people who like people, we want people who drink coffee.”
The importance of staying relevant.
Schultz said we are experiencing a “seismic change in consumer behavior, primarily because of technology. Every company represented in this room and every company in the world, no matter what industry, must make a significant investment in the capability and relevance in their own business in social and digital media and in mobile platform.”