Starbucks: Delivering Customer Service

A few weeks ago I read a case study of Harvard Business School about Starbucks (Starbucks: Delivering Customer Service). It was generally about the expansion of Starbucks and the results. Starbucks has always been one of the companies that really impress me with the importance they give to customer service. So I want to share my views about this study with you.

I think this case study is trying to tell us two things.

First of all, regardless of how big and how good our company is, we should be careful about company expansion because it is a hard thing to maintain the same environment and culture in each branch. It is also stated in the book ‘Discovering the Soul of Service’ as “Maintaining effective internal company communications, reinforcing the company’s vision and culture, and delivering consistently high quality service – essential success factors – are challenged by expansion.”

Second idea is we should never see a customer oriented investment as an expense. In my interview with Zappos, they also told me that they are doing anything to give a good service to the customers without thinking about the expenses. This may be harmful for them in the short-run, but they are never concerned about the short-term outcomes; what they are interested in are the long-term advantages.

After this case study I started to think that expansion or being everywhere are not the main indicators of success. We should first realize a pace in the existing branches and after that we should think about an expansion. Because the important thing is to have the same culture, same environment in each branch and the main aim of the expansion should be reinforcing the company’s vision.

Another thing that attracted my attention is the process between being a barista and then a manager. It is said in the study that 70% of the company’s store managers were ex-baristas and about 60% of the district managers were ex-store managers. I think this is not only good for motivating the baristas, but also it is a good technique to have the managers understand the importance of customer service. Again for this situation, Zappos is an example of this application; all the new employees are working four weeks in the call center and one week in the warehouse to understand the importance of the customer service. 

I noticed that most of the successful companies have a common aim, customer satisfaction. To sum up, a company should never forget the most important thing is the satisfaction of the customers and they should always be careful about the customer satisfaction gap and service gap and they should not let these gaps grow.  Therefore I think that, giving importance to customer service and company culture, and employee satisfaction are significant steps in the way of success of a company. 

 

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Happy Birthday sunshine!

It's my sister's birthday today..I love her so much..To all these special kids..

Do you really know what Down syndrome is?

Down syndrome is the most common genetic disorder. While normally, a human cell contains 23 pairs of chromosomes equally inherited from each parent, in Down syndrome some or all of the cells have an extra copy of the chromosome 21.

Most common form of Down syndrome is trisomy 21 and cells of the individuals with Trisomy 21 contain 47 chromosomes instead of the usual number, 46. Trisomy 21 occurs because of an error in cell division called nondisjunction. Error first occurs in the embryo when the 21^st pair of chromosomes in either sperm or egg fails to separate and after that as embryo develops; the extra chromosome is replicated in every cell of the body.

Another and least common form of Down syndrome is mosaicism which occurs after fertilication. For mosaicism, the situation is more different compared with trisomy 21 because this time, there are both 46 chromosome and 47 chromosome cells in the body. According to a research conducted to 30 typical Down syndrome children and 30 mosaic Down syndrome, IQ of the mosaic children is 12 points higher than the typical Down syndrome group.

One of the forms of Down syndrome is translocation that occurs during the cell division because of the 21^st chromosome’s breaking off and attaching to another chromosome.

The reason of Down syndrome is still unknown, but it is known that the cause of the extra chromosome is neither environmental factor nor anything the mother does before or during her pregnancy.

Some bullet points:

• Today, more than 400,000 people in United States have Down syndrome.
  
• The chance of having a Down syndrome kid is higher for a younger mom because of higher fertility rates.
  
• Most of the Down syndrome people have IQs that is enough for public and private educational programs.
  
• People with Down syndrome have feelings like everyone else.
  
• People with Down syndrome date, socialize, and marry.
  
• Down syndrome people are today working at banks, hotels, restaurants, etc.
  
• Research is showing that, the genes that cause Down syndrome are going to be identified and it will be possible to prevent or improve the problems.
  
  

I love a Down Kid..Do you?

It may be difficult to be perfectly optimistic in the beginning. But it is very easy to gain this optimism as you get to know your kid. You’ll realize that you have the most special child; you’ll start not being able to describe your feelings by just the word 'love'. Because it is not just love..It’s attachment, responsibility, self sacrifice, happiness, hope, warmth, patience, a smile, and to feel…It’s the life itself, and it’s yourself..

Sustaining Service Success

Having a successful company does not mean that you can relax and have a rest for the rest of your life. Actually, sustaining this success is a more difficult thing to do. So what can be done or what should be always remembered after having a successful company?

According to Leonard Berry, there are three challenges in sustaining service success; these are operating effectively while growing rapidly, operating effectively when competing on price and keeping the initial entrepreneurial spirit of a young, smaller company such as a start-up.

Operating effectively while growing rapidly

It is a very difficult thing to balance the growth and company execution. Core values, standards, and culture are the elements that make and keep the company strong. But as a company expands rapidly, it can be hard to keep these values and the culture. As the companies are growing, relaxing the standards and not being as careful as before while hiring new employees is a common solution and mistake. This situation can result as having employees who does not fit to the company culture and consequently the culture of the company starts to shake. 

Maintaining the core values, company culture, internal communication, and strengthening the company’s vision are the steps for delivering a high quality service. And before any expansion, a company should be first careful about these entities. Because if the company can be successful at keeping these values as it is growing, then the expansion would be stronger.

As we saw in Starbucks study example, although Starbucks is such a good company, a little carelessness while growing rapidly was nearly going to cause them to lose some of their customers.

When we look at Zappos, they are using different techniques while they are hiring new employees and they are even offering the new employees $2000 after the first five week training process to quit if these people are not suitable for the company culture. They are saying that the company culture gets stronger as company grows, but only with the right people.

Operating effectively when competing on price

When companies cannot differentiate themselves with their services or their products they mostly choose the solution of using the price as a marketing tool. Price cutting is one of the favorite solutions for the companies because they can both implement this solution quickly and they have profit in the short-term. But in the long-term there can be some bad consequences of this solution. For example, cutting the price may lead to cutting the costs and it may weaken the execution eventually. 

Actually this is a vicious circle because companies are cutting the prices for the reason that they are not being able to differentiate themselves with their services and products and vice versa; as they are cutting the prices, they are cutting the costs, and consequently the execution slows down which prevent them to develop and differentiate themselves.

I will again give Zappos as an example because although they are not applying very low prices, they have loyal customers and the number of their customers is increasing each day. The only reason of this is that they are differentiating themselves with their customer service.

Keeping the entrepreneurial spirit of a small, younger company

As the company grows and matures, it is a challenge to keep the entrepreneurial spirit. When the companies are first started, they have the dream and desire of building a great business, so they have the spirit. However, as they are growing, they usually tend to lose that spirit and start being more closed to criticism and innovations. 

Small companies are trying to be aware of all the innovations and shape their companies according to the critiques of the people and these innovations. And I think this is the right thing to do for any company. A big company may have a wrong belief of continuing always with the same applications as they grew. The reason for that is their tendency to forget how they achieved the growth. But change is also a changing entity and what the companies should do is to be always open to change and innovations. 

In mature companies another problem is that after a while rules are replacing with the personal dinteractions. While the ideas are being created by the employees and customers in the smaller and young companies, in older and mature companies mostly rules are shaping the ideas. 

Some of the core values of Zappos are ‘Be humble’, ‘Embrace and Drive Change’, and ‘Be Adventurous, Creative and Open Minded’. I think these are the core values which makes Zappos to keep their entrepreneurial spirit. They are always open to new ideas from anyone and they do not try to continue as they are now. They are taking risks and developing themselves all the time, even if there is a possibility to fail.

Zappos Presentation Tomorrow

I also prepared my slides for tomorrow's presentation for the Zappos interview! I'll present this to my Marketing: When Product is a Service Class. Hope I can have them understand Zappos sell a lot more than shoes! So wish me luck..

Zappos Interview Presentation

View more presentations from Yuksel Ulgen.

My Zappos interview & report

I just finished my report [http://www.box.net/shared/8ynpfx3krt] that I was writing for a class project. But it was more than a class project for me since it was about Zappos.com. This was one of the rare moments that a person can get so excited about a homework..I was so happy because I finally found a chance for learning something about their success story from someone inside..I made an interview with Aaron Magness who oversees the PR department at Zappos and finally wrote this report by using his answers and some other sources. 

I want to thank also Tony Hsieh for replying all my tweets and helping me to conduct this interview. As soon as I sent a message to him through Twitter, he told me that I can send the questions to him and asked Aaron Magness to help me with the questions.  They were all so helpfull and kind.  

I really don't have any idea how Tony can find time for everything, but I'm glad he is doing so.

Thank you Aaron Magness, Tony Hsieh, Zappos..

Link for the report: http://www.box.net/shared/8ynpfx3krt

Table of Contents

1. EXECUTIVE SUMMARY 

2. ZAPPOS (Powered by Service) 

a. EMPLOYEES 

b. ZAPPOS CULTURE 

3. SERVICES & KEY SERVICES 

a. A WOW experience memory 

4. CUSTOMERS 

5. BUSINESS EXPANSION 

6. COMPETITORS

7. ADVERTISEMENT & MARKETING

8. ANALYSIS & RECOMMENDATIONS 

9. REFERENCES 

a. Pictures are taken from