Yesterday I had a terrible customer service experience.
I lost my Starbucks card, which has an automatic reload that is connected to my Visa card. Concerned that someone could charge up a storm at my expense, I called 1-800-STARBUC and asked to cancel my card. They assured me it was cancelled, and that I'd receive a credit for the $20 that had automatically reloaded and been charged to my Visa. It took 40 minutes on the phone to get to this point. And scarcely 5 minutes after I hung up the phone, I got an email saying they'd replaced -- not cancelled -- my card. When I called back to ask what happened, they said they didn't know what I was talking about, that no refunds are ever issued, and I was stuck with the charges.
In that moment, I completely lost my loyalty to Starbucks. I normally go there every day -- often more than once a day -- for coffee, to use WiFi when on the road, for a quick snack if I'm hungry. I'm so loyal to Starbucks that I tried their "loyalty card," until losing it made me realize it might be more hassle than it was worth. So it was surprising to me, shocking even, to realize that years of brand loyalty could be wrecked by just one negative interaction with the company.
Which raises an interesting question: are customer loyalty programs worth the money that companies pour into them? Indeed, does customer loyalty exist anymore, on even the most basic level? If one negative interaction (which, granted, took about an hour out of my day, was handled extremely rudely, and resulted in my being charged an extra $20) was able to turn off my years-long loyalty to Starbucks, then how deep was my loyalty to begin with?
I'll be pondering this while I head out for my morning coffee...at Peet's, down the street.
Related Stories: | Topics:Management, customer service, Business, Marketing, Product Management, 1, S |
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Recent Comments | 21 Total
November 4, 2003 at 2:12pm by Rob
I buy a ton of books each year, and I have the Barnes and Noble discount card because I can shop online or in the store, which means Waldenbooks in the mall and Amazon online get less action from me, unless they have a superlow price (I do still check). Usually though, I go to B&N. But if I had an experience similar to yours, I would probably drop them.
November 4, 2003 at 2:25pm by Roy Jacobsen
Well, in a situation like the Starbucks one, I might give them another shot at making things right. But just one.
Hey, it's easy to treat people well when things are going swimmingly. Regular customers? Yeah, give them some perks, like the loyalty card.
But when something goes wrong, that's when you have to go the extra mile. Or maybe 10.
November 4, 2003 at 3:23pm by Andrew Richburg
Great question. I don't think most brands get a second chance, unless there is not a viable second alternative. If Peet's down the street was not comparable or accessible, then Starbucks it is. Regardless, loyalty is gone, but usage may remain for convenience. The company never knows there is an issue, until you up and leave for a competitor that meets your need. The key is the ability to make the situation right or better than right. Seriously, how many companies can do that?
November 4, 2003 at 4:08pm by Dave Joseph
Let's face the facts, branding sells and one lost customer to Starbucks is replaced with many more. What person would pay $2-$5 for a cup of average coffee? The answer plenty of people. The US population still is hooked on gimmicks and paying more makes them feel like they are getting something better in return. Probably not, but Starbucks is a growing tradition among the X-generation.
By the way, I have a great idea…Anyone interested.
November 4, 2003 at 4:53pm by mark
Customer loyalty programs are valuable. Now whether they are worth the money companies put into them are questionable. Could Starbucks make their program easier, probably, and it's important that they do because in the big picture loyalty is incredibly important. How can loyalty programs be simpilier and easier so a phone rep doesn't screw up the relationship?
November 4, 2003 at 5:04pm by Alison Overholt
I love the conversation this is drumming up!
Dave, please do share that great idea with us...
And Mark, it'd be great to hear more of your thoughts on how companies could simplify their loyalty programs.
Do you think it's something as simple as empowering the phone reps to make on-the-spot decisions, like going ahead and cancelling my lost card if that's what I need? Or is there something more procedural, at the company level, that needs to happen?
November 4, 2003 at 5:18pm by Jeremy Norberg
are you sure that you have lost all loyalty to starbuck's or are you just making a snap decision based on a negative experience? is this going to stick? are we living so fast that our decisions are made often in haste? i believe that customer loyalty is a marathon not a sprint, both for the customer and the company. you don't get customer loyalty fast and you don't give loyalty fast.
November 4, 2003 at 5:59pm by Jerry Trujillo
Loyalty has to be earned, Case in point!! We purchased a Brand NEW 2002 F150 in December of 2002. It took the salewomen two weeks to get me buy the truck for my wife. I have over 7 years experience as a Supply Chain Mgr negoctiating. We took delivery of the truck on a Friday evening around 7:00pm. On Saturday my wife was driving her new truck with my daughter and I as passengers on I40 through Albuquerque. The state had just completed construction of the new interchange and some debris (RE-Barb)was left in the middle of the road which was hit by the vehicle on front of us and lodge in the rear axle locking the rear brakes and slamming the side of the pickup. The truck was towed back to dealer from which we had taken delivery from not sixteen hours later. The saleswomen was heart broken was able give us a loaner for free and worked everything out with our insurance to get the vehicle back to my wife quickley. They put us in at the front of the line in the service department. To this day we get a call or a card from Sally our saleswoment even though we have since moved to the other end of the state of New Mexico. We will go back to her for all our future truck needs.
November 4, 2003 at 6:05pm by Jon
Alison - YES! The rep should be able to cancel your card on the spot. Who cares what happened to the card. You are the customer - what do you want?
The card is their loyalty program set up to reward you - how rewarded do you feel right now?
From the book; "How to win customers and keep them for life" (published in 1987).
A typical business hears from obly 4% of its dissatisfied customers. The other 96% just quitely go away and 91% will never come back. That represents a serious finanical loss for companies whose people don't know how to treat customers, and a tremendous gain for those that do.
A typical dissatisfied customer will tell eight to ten people about their problem. One in five will tell twenty. It takes 12 positive service incidents to make up for one negative incident.
Seven out of 10 complaining customers will do business with you again if you reslove the complaint in their favor. If you resolve it on the spot, 95% will do business with you again. On average, a satisfied cusomter will tell five people about the problem and how it was satisfactorily resolved.
The average business spends six times more to attract new customers than it does to keep old ones. Yet customer loyalty is in most cases worth ten times the price of a single purchase.
This is simple - you spent an hour trying to get this resolved, it wasn't and how many people knew about it and might never sign up for that loyalty program becuase of your blog post? It cost the company some amount of money to deal with you and now they may have to spend more to get you back or replace you and the possible people who won't use them now.
Who cares about whether loyalty programs work or don't. This is customer service 101 and it should be a no-brainer from a business process standpoint as well; let a customer service rep satisfy any customer request that doesn't cost the company any money.
November 4, 2003 at 10:08pm by Mark Zorro
Something tells me that Alison Overholt can geto get a years supply of free Starbucks coffee, but for that to happen the trick is get someone at Starbucks Head Office to notice. That's the way I look at customer loyalty programs, in the way Adam Sandler's character thinks about promotional and marketing programs in the movie "Punch Drunk Love" - use it, abuse it or lose it. We in the CRM and nutty evangelism age are the customers and we are all such fine things!
M.
zorromark@consultant.com
(Mark Twain wasn't Mark Twain, Mark Zorro isn't Mark Zorro)
http://www.markzorro.blogspot.com
November 4, 2003 at 10:52pm by Milo Chao
Were you ever truly loyal to Starbucks? If you were it would have taken more than one bad experience to change your order from tall to small. Starbucks, like so many brands, is a fair weather friend.
November 5, 2003 at 2:02am by Curt Rosengren
This has gotten me scratching my head and pondering just what brand loyalty means.
If we think brand loyalty means "fierce" loyalty - i.e., come hell or high water, I'm getting my latte at Starbuck's - we're probably delusional at best.
In fact, I think brand loyalty is a bit of a misnomer. Loyalty is staying true to someone (or something) through thick and thin. A dog is loyal. As a customer, I don't think any business can say the same of me.
I will stay "loyal" to a product or service as long as it suits me, and not a second longer. The closest I come to loyalty is probably Les Schwab Tires. They have consistently great service, they butter me up by fixing my flats for free, I hear great service stories from other people about them, and their prices are decent. Consequently, I always go to Les Schwab Tires when I need new tires, and I recommend them enthusiastically to others.
But if their service were to markedly slip, and I had other options - good bye Les!
Curt Rosengren
Passion Catalyt (sm)
http://blog.occupationaladventure.com
November 5, 2003 at 10:07am by Travis Smith
I feel your pain! I see a major amount of customer service problems with companies that believe they can put a web interface and phone robot in place and expect it will work fine. They seem to think that one-to-one service is not important. It is to me. I am about at the point where I will start research a vendor's support structure before I consider the product or service.
My most frustrating situations are incomplete product details before purchasing and after needing a refund, having to wait for weeks.
November 5, 2003 at 4:02pm by Jeremy Pound
I am not sure we can ever become truly loyal to a product or company - only people. I bet if there was a certain individual or two that you looked forward to seeing each day when you visited Starbucks, you would think twice about switching to Pete's. Your loyalty to him/her would translate into brand loyalty.
There are a number of vendors I consciously look to give my business to: Audi, Starbucks, a local drycleaner, Amazon.com and Sony. But the real driver of my repeat business is my daily experiences with people. Sure Sony has never let me down, but if a faceless rep on the other end of any 800 number let me down, my connection with them would probably evaporate - it's happened before (Mail Boxes, Etc.).
On the other hand, my strongest loyalties lie in a local drycleaner and Starbucks. Bernie, the owner of the drycleaner always remembers my name and personally guarantees my clothes will be delivered clean and on time; and at the Starbucks I frequent near my home/office, there is a wonderful and friendly staff who always makes me a great coffee beverage. It is going to take a consistent downturn in quality before I drop these vendors.
My point in summary, find a way to make your people your brand loyalty program. If Audi, for example, assigned one individual to write me a letter every six months or called to see if I was enjoying my car and asked my opinion about any improvements they could make, I would feel personally connected to the brand by way of this individual. I wouldn't want to let him down when my lease was up and I needed a new ride.
November 10, 2003 at 6:46pm by Teresa
This is from the FAQ about Starbucks cards...
"Why should I register my Starbucks Card?
By registering your Starbucks Card, you protect its value against theft or loss. The replacement Card value will match the balance of your account at the time the Card is reported missing."
Now since you had auto-reload on your card, it had to be registered.
Sounds to me as if you got someone on the phone who just didn't want to be bothered to do their job - did you call again or email the company customer service? At the very least I would give them one more chance. Every large company will periodically have employees who either don't know what they are doing or just don't care about their job. If I am a frequent customer (as I am at my local Starbucks) I will make more of an effort to find out if it's the employee or the company at fault.
If a second inquiry at a higher level doesn't get you anywhere, then it's time to move on to a competitor.
November 11, 2003 at 4:25am by RoseKepplerMoradian
When I was an employee at Peets coffee, my self designated
title was the "diffucult customer handler"and returns. I learned about what people really need under the wants.
The market consists of humans and humans are in flux.
A person had bought a pound of our most expensive coffee
and brought it back,demanding a refund. I gave her a coupon for 15 free cups of coffee instead. Turns out she knew nothing about coffee and had bought for her friend who was out of instant.Now both her and her friend could learn something and enjoy it.
A person bought our most expensive espresso maker and returned it,insisting it was defective..
I had to inspect it before refunding the money, so I made us
some espresso using it, proving it wasn't defective and subtly showing them how to work it.
They bought a grinder, a 1/2 pound of MajorDickansons and brought the espresso machine back home.
People need to be understood. It's not enough to say to
the client " ok,we understand heres the refund,bye now".
There is an order to the chaos of the human mechanism,
the market has expanded, but people are the same, and they change. Dealing with difficult people helped me to realize the potential for scenarios that I could prepare for.
Imagine being your own client,or market,since we do target markets and know them. Think of a problem,work it out out and practice it, because it will happen. At least you'll have the training for a similar scenario. Basically, be neurotic and if you are not neurotic, get someone who is, as your consultant. That's what an early education in customer service taught me.
December 8, 2003 at 5:40am by Kevan
It appears to me that, as the customer, you can "manage" your Starbucks card online quite easily. There are the options to "Buy a card", "Register your card", and "Reload your card" among other options. To solve Allison's specific problem, why not make the option available online to "Cancel your card". Put more of the experience in the customer's hands and then they have the responsibility. Take that responsibility away from temporary call center agents. A credit card can be managed almost completely online. The Starbucks loyalty card could do the same.
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