How Starbucks Used A Novel Method To Make Baristas More Mindful
I love a retail story when the top management thoughtfully fuses good habits into customer service. Retail is insanely hard and you’ll relate to it if you ever worked even for a little while in an actual store facing hundreds of “ready-to-turn-grumpy” customers.
Here’s a story about the 2007 era Starbucks (although your experience may vary) which crushed the rest of the competition with one timeless weapon: Extra-ordinary Customer Service.
We now take the friendly Starbucks baristas and their quirky style of spelling your names correctly/incorrectly for granted but this was all new back in 2007 when not many coffee shops were willing to be lounges with free wifi.
This story I’m talking about appeared in a book I was reading “The Power of Habit” by Charles Duhigg and it was quite a lesson on how being prepared for any situation requires developing small habits.
During the 2007-2008 recession Starbucks had another problem outside of the economic decline: Brand Decline
This was partly due to growing too fast and opening 7-10 stores a day nationwide. The employees weren’t trained fast enough and so everything was chaos and resulted in an increase in customer complaints.
Howard Schultz, the founder but who was a former CEO was asked to return and help the company before it loses to the rivals.
On his return, the first thing he reminded everyone about was what Starbucks really was:
“We are NOT in the coffee business serving people. We are in the people business serving coffee.”
He asked the senior management to deploy country-wide rigorous training programs to build the foundational habits right. The executives were asked to gather research on the most important elements that their partners were lacking during difficult days. (Starbucks calls their employees partners)
The results came in. Internal studies proved that great customer service relied upon an interesting trait: Willpower
Studies show that willpower is a bigger influence on success than natural talent. Researchers discovered that willpower is like a muscle. It needs training to grow stronger. Most barista were trained to operate under normal conditions where they didn’t need to use up their will power. But once an angry customer showed up and wouldn’t stop complaining, a few baristas lost their cool as well. This was instinctual as most normal humans would.
To illustrate how barista typically defaulted to snapping when faced with an angry customer, Duhigg used one example where a barista wrote on a cup: “I give DECAF to people who are rude to me.” Another barista wrote “b***” to a female customer which naturally created bad PR mayhem and eventaully cost them millions of brand reputation.
Starbucks knew they had to fix this impulsive nature/responses of their baristas. But how do you overturn such a human impulse and build willpower.
By anticipating the affliction points and having a thoughtful response ready for such a situation.
Starbucks developed and enforced a “reaction habit” that the employees were encouraged to train constantly through role-playing. It was called LATTE method.
The Starbucks LATTE System for Customer Service:
Listen to the Customer
Acknowledge their complaint
Take action by solving the problem
The baristas practiced this method over and over again until it became a habit. They were also trained to look for “rewards” for their effort through happy smiling customers or pats from the manager for using the habit routine perfectly. Slowly, this became the default methodology across all the stores nation-wide and within a year Starbucks returned to $1b in profits. Now 11 years later, Starbucks is no longer a sleepy Seattle-based coffee shop, it’s a massive brand with $27b in revenue every year. But what a fun story that’s based on simple habits.