It’s Not About Ethics
I came across a Starbucks discussion group web site recently--a forum for Starbucks employees to get and give advice… or to complain about their job or customers. The site, http://starbucksgossip.typepad.com, is a great place to learn retail dos and don’ts from employees of the nation’s largest specialty coffee retailer.
The significance of this site and others like it is what you learn about how frontline retail employees deal with customer-relationship issues. The chit-chat reveals a lot about a company’s training and culture.
For instance, in September 2006 a Starbucks forum member asked, “Is it fair for a customer to order a ‘ghetto latte’?” For the coffee unhip, a “ghetto latte” (or poor man’s latte) is the slang term some baristas use for a do-it-yourself latte. In short, the customer orders an espresso-only drink such as an Americano (espresso and water), a relatively inexpensive drink by Starbucks’ standards, and then moseys over to the free condiment bar and tops it up with free milk. Voilà, an ersatz latte for more than a buck cheaper.
The discussion around this topic largely fell into two camps. On the one side were employees complaining that these customers were taking advantage of Starbucks. On the other were those who felt that, hey, the profit on an Americano is plenty high enough to offset the free shot of milk going into it.
In my opinion, the smart ones--from a company perspective, anyway--were the few who viewed the practice as a lever to building customer relationships. Take this response:
“Our coffee is a luxury item and our condiments go along with that luxury item. It is there for our customers to use and abuse. I have a customer who fills his kid’s sippy cups [with the free milk], but I don’t fret, because I understand that his $5 every day adds up to $1,500 per year…. Why don’t you try to connect with [those customers], form a friendship and get them to purchase more in your store?”
This comment would probably please returning Starbucks CEO, Howard Schultz, whose plans for reinvigorating the company involve, among other things, “re-igniting emotional attachment with our customers.” The company has long taken a “just say yes” approach to customer service.
The problem is that this idea understandably rankles many retail workers, and not just at Starbucks. It isn’t a case of overzealous employees trying to protect the company from freeloaders. Nor is it about self-appointed ethics police. It’s about employees not understanding the economics behind why their company allows customers to, in their opinion, rip them off while at the same time complaining about service or product quality to some hard-working, low-paid, counterperson trying to work his or her way through college. It’s all about not understanding that “just say yes” doesn’t mean “free lunch.” There is no such thing--not in the corporate world.
Once employees understand the economics of “just say yes,” or “the customer is king,” it’s a lot easier to give service with a really big smile. Once the company explains that, “Yes, we know all about the DIY lattes, but [whispers] guess what, there’s so much stinking profit in our drinks that you could give them a whole pint of milk and ten packets of sugar and still make a profit,” the barista can hand over that Americano with a smile knowing that it surely isn’t Starbucks that’s being ripped off.
By the way, if you really want to get an earful, find the discussion regarding WiFi users who table-squat all day after buying a buck-and-half coffee.