Starbucks is often credited with transforming coffee from a basic commodity to a gourmet experience in the United States. Founded more than 50 years ago, the company is hugely successful, generating revenue of US$29.06 billion (2021) with net income of US$4.2 billion (2021). From its humble beginnings in Seattle, Starbucks is now the world’s largest coffee house chain, located in 80 countries, with almost 34,000 stores. And while known for providing its customers with delicious (if pricey) coffee, as well as free Wi-Fi and a place to relax, the company is also trying to provide them with something more – a personal relationship. And, so far, it seems to be succeeding. 

Starbucks famously described its vision of reaching its customers as ‘one neighbourhood, one person and one cup at a time’. And thanks to its effective use of digital marketing, social media, customer relationships and technology management, the company is doing just that. 

Starbucks appears to be one of the few companies that truly understands the intricate triangulation between consumers, a product and social media, and how the three, when successfully managed, can increase a brand’s profile and develop a relationship between that brand and a customer (while, at the same time, generating higher sales). As proof of Starbucks getting its customer relationship management right, a reported nine out of ten people who use Facebook are either fans of Starbucks or know somebody who is. 

Starbucks is a leader in its class when it comes to incorporating the latest technological developments into its operations, allowing it to almost seamlessly merge its bricks-andmortar stores with the numerous digital marketing channels available. The company has also been adept at developing relationships with its customers, using the latest online innovations and social media platforms (Starbucks is present on Facebook, Twitter, Instagram and YouTube, to name just a few). Starbucks is adamant when it says that the purpose of new technology is not just to improve its website or to process payments more quickly for people who are queuing up – it is really about getting in touch with its customers and trying to better understand them, so as to improve the level of service and customers’ experience with the brand. As a sign of its commitment, the company has reportedly taken all the money it used to spend on traditional media outlets and shifted it into digital and social media marketing, in an effort to deepen and consolidate its relationship with its customers.......

Questions 

1. What are some of the ways in which Starbucks ‘engages’ its consumers in customer relationships? 

2. How can an understanding of digital marketing and social media help companies gain a competitive advantage when it comes to customer relationship management? 

3. Analyse the methods used by Starbucks and explain how the company has been successful in increasing its brand recognition, while at the same time improving its customer relationship management.