The Customer is Key: Lessons From Starbucks

Posted by Dr. Marty Ludlum and Kara Ludlum on 03/09/2015

The Death and Coffee Series

THE CUSTOMER IS KEY:  LESSONS FROM STARBUCKS

By Marty Ludlum and Kara Gray Ludlum

How the Funeral Business is like the Coffee Business:  The business world is very competitive.  The funeral profession is no exception.  How can you succeed, even survive in this environment?  One way is to adopt ideas from the successful coffee icon: Starbucks.  You probably don’t want 20,000 locations, just one location that is profitable.  The ideas from Starbucks work equally well on a smaller scale.

Why do Starbucks principles apply to your business?  How did the coffee industry appear when Starbucks started?  Prior to the Starbucks era, the coffee industry had a very competitive environment, with many sellers of similar products and services.  Firms became very cost competitive to gain market share.  Over time, quality declined so that the firms could remain profitable while engaged in heavy price competition.  Sound familiar?

The history of Starbucks is fascinating.  Starbucks started out modestly with a single location in Seattle, Washington, in 1971 selling coffee tea and spices.  Their original goal was to expand and have a store in Portland, Oregon.  Now they have twelve outlets in Chicago-O’Hare airport alone.  So, how did Starbucks grow so much and so fast?

They made the customer the center of the universe.  Their business model was guided by this goal.  How was this achieved?  Three ideas will be highlighted.  First, everything matters in customer service.  Second, the business must have consistent, quality products.  Third, to make the customer key, you must have individualized service.

First, everything matters in customer service.  Nothing is trivial when the customer in involved.  Every detail matters to the customers, so it should matter to you.  Howard Schultz, the founder and CEO of Starbucks is proud of saying they are not in the coffee business serving people, but the people business serving coffee.  The customer is the most important thing.

Attention to the customer is even more critical in a service industry, such as funeral homes. You would never invite someone into your personal home and ignore them, but businesses do it all the time.  “Customer service” is just a mantra that gets repeated, but garners no attention.  For most businesses, the typical “customer service” area is the place to make complaints.  Customer service should be a process to avoid complaints from happening, not a lackluster method of handing complaints as they arrive.  One way to minimize or avoid complaints is attention to detail.

A second step to making the customer key: a successful business must have consistent, quality products.  Starbucks excels at this.  Starbucks makes their stores customer friendly for newbies to coffee drinks.  Explanations are everywhere for what they sell.  This makes the experience less intimidating for new or experienced customers in trying a new product.

Starbucks is also very friendly to the repeat customers.  Starbucks drinks are the same worldwide.  Your Starbucks espresso will taste the same in Birmingham as it will in Beijing.  This is not by accident, but is the result of careful planning and extensive training of new employees.  (Although Starbucks food options differ around the globe, they are trying for regional uniformity for consistency and production reliability).

Finally, Starbucks puts their money where their mouth is.  If you don’t like the product, they will make it again, until you, the customer is satisfied. The best measure of quality is having a satisfied customer.  Too often businesses aim to provide just enough customer service so that the customer is not complaining.  That is setting the bar far too low.  You, as the business owner, should not be satisfied until the customer is happy with the quality of your service.

Third, a successful business must stress individualized service.  It is essential to make an emotional connection to the customers.  One way to make an emotional connection is to customize the product for each consumer.  Put their name on it, literally.  Starbucks, unlike most of their competitors who sell coffee, puts the customer’s name on the cup.  This simple act does two things.  First, the employee has a tie to a real person, not an inanimate object (coffee).  The employees take more pride in working on Bill’s coffee than on coffee.

Second, the customer identifies an emotional attachment with the product.  That’s not just anybody’s cup of coffee! That is Jerry’s vanilla latte or Diane’s espresso.  Humans always have a greater attachment to something identified by name.  That’s why a simple painted doodle becomes a treasured work of kindergarten art by adding “for Mommy” to the picture.  Dale Carnegie always said that a persons’ name is the sweetest word in any language.  It works!

Can we apply these principles from Starbucks to your funeral home?  Does everything matter in your funeral home?  Do your customers ever feel “am I invisible?”  Customers won’t mention poor service; they will just leave and do business with your competitor.  Is the customer an important person in your decision process or is the customer just a wallet with a human attached?

Here is an easy checklist to see if everything mattes at your funeral home.

Do you interest all the senses?

  1. Sight?  Will your customer see cobwebs, burned out light bulbs, trash cans overflowing?
  2. Sound?  Is the background music clear and providing white noise to drown out neighbors?  Is it the right volume?  Is it consistent in every room?
  3. Smell? Does your funeral home smell more like a home or more like a hospital?  Realtors have discovered this secret and now bake cookies at most open houses.  The smell of just baked cookies makes the area feel more like home.
  4. Touch?  Are surfaces clean to the touch or sticky from flowers and coffee stains?

Do you emphasize consistent quality service at your funeral home?  For every single family?  Or are you tired?  If you don’t take care of customers, someone else will.  To the families you serve, no funeral is “ordinary.”  You should have the same attitude.

Good retailers go out of their way to fulfill customer wishes.  The same is especially important for services like the funeral industry.  Consistent, quality products are especially important when your product is primarily a service.

 

Do you offer an individualized service?  Using the customer's name helps with that relationship. A customer relationship begins like a romance – first with names, then with preferences.  Focus on customer’s preferences and try to remember them.

Fortunately, most funeral professionals excel at this.  You likely cannot go anywhere in your community without running into families you have served, who care about you and recognize you by name.

Go beyond learning the names of your customers.  What is your customers’ funeral home experience?  This may require some honest self-reflection and soul searching.

What extras did you get as a customer that you remember?  A free upgrade on a flight, hotel moved you to room with a view, oil change that also vacuumed the front seats.  This small perks resonate a special feeling with the customer. 

Does anyone else peddle the same caskets?  That is likely.  What makes your service unique?  Do your customers feel like they were treated specially or just the “next” funeral on your list?  This is another area where funeral professionals are excelling.  Customization is the key to making the customer feel they got individualized service!  The stronger the customization, the stronger tie the customer will have to your funeral home for this call and the next one!

The Starbucks business model was to make the customer the center of the universe.  They used three core ideas to further this goal.  Everything matters in customer service.  The business must have quality, consistent products.  Finally, the customer should receive individualized service.    Interestingly, the first part of the mission statement of Starbucks could certainly be used by any funeral home: “To inspire and nurture the human spirit”.  By focusing on these core ideas, you can make your funeral home relevant and highly desirable in your community.

 

Essential Reading List

You could likely fill a library with books that talk about Starbucks and their business success.  These four books should be required reading for everyone in the service industry:

Pour Your Heart into It, Howard Schultz (CEO of Starbucks), 1997

Onward: How Starbucks fought for its life without losing its soul, Howard Schultz (CEO of Starbucks), 2011

The Starbucks Experience, Joseph A. Michelli, 2007

It’s not about the coffee:  Leadership principles from a life at Starbucks, Howard Behar (former president of Starbucks International), 2007

 

About the authors

Professor Marty Ludlum teaches business law at the University of Central Oklahoma and is a licensed attorney.  He has made numerous presentations on the funeral industry at state and national conventions and had articles in national and state funeral magazines. Professor Ludlum has a Bachelor’s and Master’s degree in economics, a Master’s degree in communication and a Juris Doctor, all from the University of Oklahoma.  Professor Ludlum is the Education Director for Osiris Funeral Home Software.

Kara Gray Ludlum is a CPA and licensed Funeral Director in Oklahoma. She operates Funeral Director’s Resource, Inc., a consulting firm specializing in providing Osiris computer software and funeral home accounting.  She has made many presentations to state and national conventions.  Kara has Bachelor’s degree in accounting from the University of Oklahoma and a Master’s degree in Business from Cameron University.  Kara has taught accounting at Cameron University, has owned and operated her family’s funeral homes for over 15 years.