Even Starbucks can forget its customers

The recent video message from Starbucks’ new CEO, Brian Niccol, comes at a critical moment for the American giant. Preliminary results for the fourth quarter of 2024 revealed a $2 billion sales slump (-7%), leading to the suspension of 2025 forecasts.

Even giants stumble

The company that reinvented the coffee shop as a global meeting place has issued an appeal through the new CEO’s video message to bring Starbucks back to its roots, promising to rebuild its connection with customers.

Today, Starbucks is forced to confront its own mistakes — or so it would have us believe. The CEO’s recent message presents itself as a deep reflection, but it sounds more like an attempt to reassure investors rather than an authentic moment of humility. After all, when a company of this size admits it has lost touch with its customers, something clearly isn’t right. If even giants stumble, it means that a solid business plan alone is not enough: a clear vision and consistency between words and actions are also essential.

“At Starbucks, coffee comes first,” the CEO declares, emphasizing coffee as the center of the company’s mission. Yet, anyone who has tasted a Starbucks espresso knows it’s far from memorable. Let’s be honest: calling it a “high-quality Espresso” or “finest coffee, handcrafted” is an undeserved compliment. Today’s consumers are better informed, educated about taste, and can tell the difference between a decent coffee and what we might kindly call a “disaster.” The idea that Starbucks can position itself as a master of “high-quality hand-crafted beverages” is almost amusing; as far as we know, an artisanal coffee cannot be produced with the push of a button.

And the problem doesn’t end there. They say, “No one matches our expertise,” and praise the skill of their so-called “skilled baristas.” But here lies the issue: those behind the Starbucks counter aren’t real baristas but operators following the instructions of super-automatic machines. This might be acceptable for a “Latte Company” — a term that fits better than “Starbucks Coffee Company” — but when you try to position yourself as a coffee expert, the details matter. And those who know what a well-made coffee is aren’t fooled by fancy words.

In a world where customers are increasingly aware and quality-conscious, claiming that “we are reorienting all our work to ensure we deliver a high-quality hand-crafted beverage” rings hollow. Where the Starbucks name and convenience may have been enough in the past, today’s public demands more. If Starbucks truly intends to reclaim its “core” and build an authentic experience, it will need to rethink not only its strategy but also the substance of its product.

Video Message from Starbucks CEO, Brian Niccol - Available until Thursday, December 5, 2024 on stories.starbucks.com

Balancing a memorable experience with product quality

Starbucks finds itself in a delicate situation, a kind of impasse that puts its identity at risk. On one hand, the company has always had a history as a coffeehouse, a warm and relaxed meeting place where coffee represents the heart of the experience. But it’s clear that at this moment, the American giant has lost the battle on both fronts.

When the CEO speaks of having “drifted from our core,” he implicitly admits that Starbucks has neglected the much-hyped user experience. If the mission was to create a welcoming environment where customers feel at home, it’s clear they have failed: over time, the brand has drifted from its essence, forgetting what it truly means to make customers feel unique and valued. Unfortunately, the CEO forgot to admit another uncomfortable truth: beyond the experience, the coffee itself has also been left behind. Starbucks coffee is notorious for its burnt aftertaste, hardly known for quality or freshness.

This situation highlights the major challenge for any entrepreneur in the sector: how to balance customer experience with product quality? Starbucks has neglected both, opting for standardization that may satisfy industrial logic but no longer meets consumer expectations. And today, with a more discerning and informed audience, this imbalance has become clear. Customers aren’t satisfied with a pleasant environment if the coffee disappoints, nor do they bond with subpar coffee just for a pleasant experience.

Ultimately, this is the lesson: for a coffeehouse to succeed, there must be a genuine balance between the user experience and product quality. One cannot compensate for the other. Starbucks has played too long on image without reinforcing its core product — coffee — which should be the true star. For anyone looking to build a lasting relationship with customers, this is an inescapable reality:

A Starbuck store - Source: stories.starbucks.com

The problem: forgetting who you are

Admitting one’s mistakes is always commendable, but also revealing. Starbucks’ CEO openly declares that the brand has “drifted from our core,” meaning it has strayed from its essence. In other words, Starbucks seems to have forgotten what made it unique, focusing more on quantity and profit than on quality and values. Loyalty, in this context, has been more talk than action: a mere label for a brand that, in reality, preferred to “speak to everyone” without really connecting with anyone.

The obsession with Rewards customers — the loyalty program that has been central to their strategy over the years — served more as a way to boost numbers than to build authentic relationships. But as they say, if you speak to everyone, you’re speaking to no one. This lack of authenticity ended up alienating customers, leading them to fall out of love with the brand and abandon it. The CEO himself admits that “some customers… think we’ve stopped communicating with them,” and this is reflected in the numbers, with a reduction in visits to Starbucks locations. Without a real connection, the customer feels like just a number and will eventually find somewhere else to feel unique and appreciated.

In today’s market, however, just being everywhere is no longer enough. Competition is increasing, and fortunately, so is consumer awareness. They no longer want a cold assembly line but rather an environment that makes them feel special and valued. And this is precisely where Starbucks has lost its way. Ubiquity and word-of-mouth are no longer enough if the growing demand for authenticity and personalized experience isn’t met.

Starbucks has built an empire, but at what cost? When “quantity” prevails over “quality” and care for the customer’s uniqueness, there is a risk of becoming a soulless giant, lost in the pursuit of profit at the expense of essence. The Starbucks case is a valuable lesson for anyone who wants to maintain an authentic relationship with their customers:

“When you forget who you are, sooner or later your customers will forget you too.”

A Starbucks Baristas serving coffee to customers

“Offering quality coffee is the first step, but it won’t be effective if it lacks an experience that enhances its value”

The solution (or at least a direction) for small businesses: “What to do when you’re at the helm”

The Starbucks case offers a powerful lesson to those running small businesses: success is built not only with numbers and volume but with authenticity, values, and a clear vision. When you’re at the helm, your direction should be guided not by immediate profit but by a sincere commitment to your customer and product.

Starbucks’ CEO repeatedly emphasized certain key concepts in his speech, such as user experience (8 times), communication (4 times), loyalty (2 times), and values (2 times). These are the pillars that every coffee shop should be built on — but not as empty slogans.

Let’s look at how to turn these into concrete actions:

1. Product knowledge and staff training

It’s not enough to serve coffee; you need to be able to tell the story behind it. Customers are more informed than ever and are looking for an authentic experience: they want to know what they’re drinking, where it comes from, who produced it. For a small business, this is a unique opportunity to stand out from the giants: invest in staff training, make your team knowledgeable about the product and process. A barista who knows what they’re talking about enriches the customer experience far more than a name written on a paper cup or a super-automatic machine churning out drinks at the push of a button.

2. Product quality: coffee first

Starbucks says “coffee first,” but it’s just talk. As a small business owner, you have the chance to be serious about it. Make coffee the core of your mission, choosing quality and freshness without compromise. This doesn’t just mean selecting a good product but also caring for every stage of preparation. It’s meticulous work, but it’s what customers notice and appreciate and keeps you far from the low-price competition.

3. Direct communication and targeted loyalty

Another mistake Starbucks made was trying to speak to everyone without focusing on the right customers. In a competitive market, trying to please everyone is often the quickest way to satisfy no one. As a small business, you can concentrate on a specific target and create a loyal customer community that resonates with your product and values. Invest in clear communication that speaks directly to your target audience, creating a strong bond with them and offering an experience that makes them feel part of something special. This approach allows you to build a loyal customer base that is more likely to return and recommend you to others.

4. User experience and attention to the environment

The concept of “experience” is repeated many times in the Starbucks CEO’s speech, but in practice, the chain has strayed from this promise. For you, the customer experience should be a mantra that goes beyond words. Pay attention to every detail: the cleanliness of the space, the welcome, the arrangement of chairs and tables, the lighting. A pleasant and well-kept environment makes customers feel at ease, giving them the sense of being special. This is the true “user experience,” which doesn’t rely on massive budgets but on a clear vision and attention to detail.

5. Being guided by true values, not by profit

Starbucks emphasizes the concept of values, but in practice, it’s clear they have prioritized profit. You can avoid making the same mistake. Define the values you want to convey and stick to them. Profit is important, but it will naturally follow a business that prioritizes the customer and the product. If the values are genuine, the customer will perceive them and be more likely to return.

This reminds us that a strategy focused solely on growth may be effective in the short term, but for sustainable growth, authenticity and consistency are essential. Today’s customers are looking for places where they feel appreciated, not machines churning out soulless products. And if even a giant like Starbucks recognizes the importance of user experience and product quality, then for a small business, it’s time to make these priorities their own strength.

The lesson from the giant

Starbucks’ recent history shows that even giants must stop and take stock. Despite its size, reach, and global success, it finds itself struggling because it has ignored the basics: a clear identity and a satisfied customer. When you lose sight of your core, when the product and experience become mere slogans, the price to pay is high.

The lesson for every entrepreneur is clear: growth cannot come at the expense of one’s essence. Even giants stumble, and this shows that every detail matters. Always remember that consistency and care for the customer are the true foundation of success, the kind that is genuine and enduring.