As I write this, I’m seated in a coffee shop, as I am on most mornings, reading a little, writing a lot and completing some strategy work for clients. You might think that the constant banter between baristas and patrons would become annoying after a while. You’d be wrong. Sure, it can get monotonous hearing the same people ask for the same things in the same way each day. But, being a keen observer of business, I also learn a lot, especially about the things that hold small businesses back.
For example, some mornings I work at one of several nearby Starbucks coffee shops, where I see a seemingly endless array of patrons enter to pick up their mobile orders. This makes me wonder why I don’t see other local coffee shops using an app for mobile orders, since this is obviously what coffee buyers prefer. Candidly, I see a lot of retail lessons from Starbucks that small business owners would do better to understand and replicate.
1. Understand that products and services bring clients in the doors, but customer service brings that back.
Customer service is the backbone of the world’s most successful businesses. I can assure you that most, if not all, of the folks who frequent Starbucks each day could make an even better cup of coffee at home. To that, you say, “Yeah, but they don’t have time to make it at home.” True, but—. If it was only about time, some of these folks would presumably wake up earlier to make coffee at home and save the couple bucks a day.
Remember, this is discretionary spending. No, what brings the folks in day after day after day is the attention to detail paid to each customer. They are always greeted with a friendly “Hi,” never rushed, always invited to ask for their drink just how they like it and always identified by name. You think that doesn’t resonate for he guy who ran out the door after eating cold oatmeal to get to his office just in time to be scolded by his boss for not having a presentation done in time?
Let me tell you, it goes a long, long way. If you expect people to spend money they don’t have to spend, you’d better find ways to make them feel good about it.
2. Staple items are table stakes.
The biggest retail lessons from Starbucks involve a fact I witness each time I visit one of their stores and notice that much of what people order has nothing to do with coffee. Hmm… This is Starbucks Coffee, right? I venture to say that 25 percent of what I see bought is food, and I’m not talking about lattes. I’m talking about wraps, oatmeal, sandwiches and such. This reminded me of what hit me the first time I walked into an Academy Sports + Outdoors.
I remember thinking, “Isn’t this a tackle shop?” Upon entering, I was bombarded with apparel, eyewear, footwear and discount bins filled with sundry items ranging from gloves to beef jerky. For years, I have been beating the same drum to retailers far and wide. Give customers a reason to visit, but make certain to have high-margin items available as well.
3. It’s not about price.
Starbucks is such a pervasive franchise now that we forget it’s a relatively young chain. People also forget that before Starbucks, coffee was seen as an afterthought, something people enjoyed after a meal but were charged a pittance for. Now, people routinely shell out close to $2 for a basic, medium cup of Joe at Starbucks all over the planet. Why do you think that is? It’s simple: For Starbucks regulars you are made to feel special, cool, like you are part of a group that’s important.
If what psychologists say is true—that we all have a strong need for affiliation—saying Starbucks in our heads is an understatement. I remember how it felt to frequent the Bass Pro Shops outside Atlanta every Friday night. I seldom spent more than $20, but I was amongst brethren, and it felt good. The mom-and-pop retailers across the country offering coffee, easy conversation and great selection have this figured out.
They know they cannot compete on price with the big boxes, but the regulars come through the doors for far more than products or services, so higher prices are insignificant.
Think service first.
When a business owner attempts to compete on service, she is making it clear that being in business is not a priority. Unless you’re a behemoth capable to surviving on razor-thin margins (a la Walmart), you’ll need to compete on something other than price. Smart money says that should be service.
If you make service a priority, customers will make your business their priority. This is but one of the many retail lessons from Starbucks that I’m hopeful small businesses adopt.
