Starbucks' success rests on a simple goal: to inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time. To that end, the people behind Starbucks, from coffee servers to CEO Howard Schultz, strive to make authentic, uplifting human connections while delivering a high-quality, innovative, and delicious product, all without overlooking where the product comes from and how it is sourced.
In his second book about the coffee giant, Joseph Michelli offers an insider's perspective on the thriving company. Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products, and Your People reveals how the brand made a comeback following the recent economic downturn, and how it plans to move forward. Michelli explained to Associate Editor Maria Minsker why he calls his book a blueprint for making every customer connection meaningful and building a dynamic business that sustains credibility, uniqueness, and relevance.
CRM: This is your second book about Starbucks. How is the brand different now than when you wrote about it in 2006?
Joseph Michelli: In 2006, it was all about the meteoric rise of the brand. The company was doing everything right, and was growing immensely, opening about six stores a day. Once the recession started in 2008, they started having some problems. They were compromising the experience by taking shortcuts, and things were getting bad for them. So this time around, when I revisited the brand, I saw them as a much more seasoned company. They've had that meteoric rise, then faced challenges, but were able to come back. This time, the story is about long-term success in the new era—leveraging human connections in the digital age, and making them relevant globally.
CRM: Can you take our readers through the five principles you introduce in your book? What makes them so important?
Michelli: The principles are pretty simple: savor and elevate, love to be loved, reach for common ground, mobilize the connection, and finally, cherish and challenge your legacy. In an era when everyone broadcasts what they think and every opinion is out there on social media, you'd better have people who are truly zealous over your brand. As a brand, you need to figure out how to be beloved by customers and position products and services in a way that becomes indispensable to the lifestyles of customers. Beyond that, the principles also explain how to leverage connections, how to extend the brand, and how to build brand elasticity.
CRM: What do you think customers love most about the brand?
Michelli: Starbucks evokes passion. It's a romantic brand that reminds people of an Italian coffee house. But perhaps more importantly, the brand is, itself, passionate. It cares about its product, and it cares about where the product comes from. It cares about the Guatemalan migrant farm workers who are in Costa Rica picking this coffee. People love brands that have a social conscience. They love brands that offer a certain romantic, elevated, affordable luxury experience, a moment of uplift during the day. And, of course, customers appreciate that Starbucks hires great people who are energetic and aren't just shoving product in their faces.
CRM: What can other companies learn from Starbucks?
Michelli: It doesn't cost a lot to select the right people and give them a vision of how they can do more than just sell a product. It takes inspired leaders who can explain to this well-selected staff that they have an opportunity to make a difference in people's lives, and these are the kinds of leaders Starbucks has. The company is also constantly thinking about where their customer is, and who he is. They've understood that customers might want to enjoy their coffee while they're, for example, camping on a mountaintop. So they created VIA, which enables people to warm up water over a campfire and have quality coffee, even if they're nowhere near a coffee house or even a coffee machine.
CRM: How is Starbucks embracing social media, mobile, and other new channels to reach its customers effectively?
Michelli: Starbucks is, no doubt, a leader in mobile pay. They have a very robust app, which features targeted messaging for its loyalty members as well as various rewards programs for its most loyal customers, like Starbucks Gold Card holders. Starbucks is also now allowing customers to use the app to pay for purchases with their phones, meaning they're able to track what people purchase, and then send targeted messages or offers. They know their customers and how connected they are, and have used this to not only make life easier for their patrons, but to their own advantage as well.