Archives / January 2008

Starbucks tries to revive its business with a focus on, guess what...

[Starbucks CEO] Schultz has said he wants to refocus on the "customer experience," recapturing some of the magic of the chain's early years, when employees — who had heard the term barista before Starbucks came along? — made the drinks by hand and customers were excited by top-notch coffee.

Mr. Schultz faces a difficult task: He has to slow down the company to make stores feel more like hip neighborhood coffeehouses while also delivering the steady growth that investors have come to expect from Starbucks.

"How bad can a cell phone company get?" So asked EyelessWriter after finding that Verizon Wireless customer service reps quoted the wrong prices over 90% of the time.

A family member of mine is having a similar problem with Verizon Wireless right now, as multiple reps have promised to refund a mistaken charge and haven't; and have promised to call back ("they absolutely will call you tomorrow," that sort of thing)... and haven't. At least Verizon Wireless is consistent!

As for me, I'm an iPhone user - see my review in Uncle Mark 2008 - so I'm of course on AT&T. And so far AT&T hasn't displayed anything like the constant disappointments from Verizon Wireless.

(Thanks for the pointer, Paul)

Sometimes the line between "good" and "bad" experiences is blurry. For example, the New York Times reviews Cipriani, a high-end Fifth Avenue restaurant:

Despite scorching reviews, high prices and recent guilty pleas by Cipriani family members to tax evasion charges, people still return, faithful to the $19.95 bellini (white peach juice and prosecco), the $31.95 hamburger and the $55.95 veal Milanese.

In the brutal New York restaurant business, competitors to Harry Cipriani open every year — serving better food at more reasonable prices and catering to patrons with slavish care and roomier seating — and promptly go out of business.

So how does Cipriani not just stay in business, but thrive? One pundit suggests that the bad experience itself helps sustain the place.

"It's as if there is some perverse director who has constructed a place that pushes the customers to extremes," Ms. Bradley said, "to see how much they will pay for bad food, to watch them wait in front of an audience even if they have a reservation. It's a place where people are treated badly, and it is set up so that you also get to see how funny it is to watch other people watch you being treated badly."

The answer is that it isn't all a bad experience. Cipriani's customers are there because they want something very specific: just to be around their own type, New York market makers and celebrities. Service, food quality, and prices have very little to do with the desired experience. So when a new restaurant opens with great food and comfy chairs, but no celebrities, it fails to attract that customer type.

New York insiders who are in such a hurry to gain more capital (political, social, financial) want this narrow experience, because it delivers the goods - even at the expense of all the other elements "normal" people might look for in a restaurant.

Contrast this with Danny Meyer, the top-rated New York restaurateur, who succeeds in exactly the opposite way: he creates an integrated, authentic good experience for his customers. (See the Good Experience profile of Danny Meyer or watch the video clip of Danny at Gel 2007.) I've been to every one of Danny's New York restaurants and have been happy about every single one of them: the spirit of hospitality infuses the entire experience.

So we see two different types of successful experiences:

• the narrow experience, which focuses all its resources on one thing that (certain) customers really want. This, of course, takes resources away from other elements, creating a lopsided outcome that only appeals to certain people at certain times. It's a risky strategy in the long run.

• the integrated experience, which tries to deliver quality in multiple aspects. This is harder and often takes longer to accomplish, but it creates a strong foundation for long-term success. Hedgehogs generally do well here.

Personally, I usually prefer the integrated good experiences, since they "gel" many different things and I like Gel - but obviously, seeing the Cipriani approach, it's not for everyone.

P.S. One other element of Cipriani's success, bizarrely, may be its overly inflated prices. This Economist article (reg. may be required) cites studies suggesting that people enjoy overpriced things in part because they've paid so much for them.