Experience Innovation: Two Incredibly Simple Ways Starbucks Revolutionized Their Industry

We have all experienced less-than-ideal customer service — the grumpy waiter who ignored your table and treated you as if you were inconveniencing him by being there, or the terse ticket agent who offered no help at all after you spent hours lurching through security. Whether it’s a hounding car salesman or a two-hour wait on the phone for customer service, no one is entirely unscathed.

But if a business is smart, they understand that customer experience is just as important as their product. Think about it: many of the places we choose to frequent are the ones with which we've forged a sense of connection. The pizza place you visit on Friday evenings with your family gives you a sense of routine and shared memories. The happy hour spot after work is a consistent opportunity for you and your coworkers to blow off steam. These places make us feel welcomed, treat us like family, and probably even know our names. They're places we associate with happiness and comfort. 

And when a company is especially smart, they will build this experience of connection and comfort into their business model.

The Experience Revolution

The idea of changing a customer’s experience is nothing new, yet the majority of businesses have not taken a structured, methodical, and analytical approach to changing the customer experience. A select few, however, have mastered this art. They have researched and analyzed the ways customers were treated by their competitors, noticed negative tendencies exhibited by others in their industry, and sought to improve on these — creating an entirely new and unique experience.

This is known as experience innovation. A Dealing with Darwin infographic defines it as: 

“An innovation type in the customer intimacy zone that differentiates an otherwise commoditized offer in a mature market by modifying the customer’s end-to-end experience from initial encounter to ultimate disposition.”

In layman’s terms, experience innovation means creating a unique experience for our customers from the moment they walk in the door to the moment they leave. A simple look at one of the most recognizable companies in the U.S. will show you how successful it can be.

The Starbucks Experience

When Starbucks went public in 1992, Howard Schultz, chairman and CEO of the company, wanted Starbucks to be about more than coffee. He wanted to create an enduring, special experience for every person that walked through the door. At the time, the most successful food and beverage retailers based their businesses on models of speed and turnover: bring customers in, serve them, and get them out the door, thus maximizing daily profits.

Schultz wanted to be different. He wanted to create a lasting experience for his customers — something that would be remembered, even if it was as simple as getting a morning coffee. He explains in an article in Forbes,

“It’s not just about ringing a register… It’s about creating an emotional, enduring relationship and connection with our people, their families, and ultimately with our customers.”

But how did Starbucks succeed at this approach? 

1. They Offered Options:

At the time Starbucks first started to gain national traction, customers were accustomed to being boxed in. A major part of the food and beverage industry — especially fast food — was centered around limited consumer choices, decreasing service time, and, therefore, increasing both the volume of sales and the profits.

Starbucks wanted to be different, so Schultz offered his customers options and the luxury of customization. As Aimee Groth, former Senior Editor, explains in Business Insider,

“[Starbucks] claims to serve 87,000 different drink combinations, all of which a barista can make without hesitation… [and] Baristas manage complex orders with the innovative Starbucks shorthand.”

In an industry where limitations were the norm, Starbucks offered the customer options and choice. Instead of ordering something off a value menu, customers felt as though they had ownership over the customized product they were ordering. 

2. Customers Could Stay and Play:

Ray Kroc may have revolutionized the food industry with his adaptation of the assembly line, serving hundreds of customers an hour and trumpeting his high turnover rate, but Starbucks dared to be different. Instead of emphasizing speed, Schultz understood that he could create an environment where customers felt welcome — a place where they didn’t feel rushed to eat and leave. He wanted his customers to feel at home.

Schultz gave customers amenities that had never been seen before in the fast food market. Johnathon Knee, describes the first Starbucks in a Slate Magazine article:

“Starbucks’ many gestures of affection included comfortable chairs intended to erase the pressures of urban life from the mind and body; clean, well-stocked bathrooms in a city otherwise designed to test the limits of the human bladder; cheap refills for discount-mad old-timers. And Starbucks initially provided something no other fast-food franchise had ever managed to deliver: friendly, knowledgeable, and patient staff who often knew your name and preferences.”

The result? Customers began staying to work, study, read, and catch up with friends. Starbucks began to feel like a community hub, becoming an oasis of personalized comfort in an industry previously characterized by general disinterest and standardization.

The Simplicity of Innovation

In the end, all Schultz did was ask himself, “What would I want as a customer?” and incorporated that answer into his business model. By making customer experience a priority, he created a place where customers felt at home and turned occasional coffee drinkers into regular customers. Further, by creating a comfortable, relaxed atmosphere, Schultz made it more likely that customers would purchase more than one beverage over the course of their visit.

When focusing on developing or marketing your own business, make sure that you're taking customer experience into account. Done well, experience innovation can ensure that your customers keep coming back for more.

In your opinion, which businesses or services offer the most memorable customer experiences? Let us know by tweeting @EidsonPartners!