Customer Centricity through Technology

January 25th, 2013 by under Uncategorized. No Comments.

A visit to a coffeehouse used to be a very personal experience.  When I was a barista myself during undergrad, I loved getting to know my customers, memorize their orders, keep up with their work, family, or weekend plans, and offer a cup on the house or a sample of a new pastry as a way to say thanks.  Today, it seems hard to find these kinds of personal connections at a coffeehouse – especially in high-volume shops like Starbucks.

This week in my Marketing Strategy class, we were discussing customer centricity, and how valuable it can be to focus on the customer rather than just the product, and Starbucks was brought up as an example: customer centric or customer service oriented?  Clearly, Starbucks is customer service oriented, a result of managing a fast-paced, steady stream of “double-venti-soy-sugarfree-vanilla-latte-extra-hot-no-whip” all day, with an expectation of consistency in flavor, style, service, and pricing at its many, many, many locations.  The class consensus was that it was too late for Starbucks, they had already strayed too far from their quaint Seattle coffeehouse roots, and there are just too many customers passing through the shops to manage a customer centric model.

…will that be all??

This discussion brought to mind a recent deal hatched between the coffee powerhouse and Square, the (square-shaped) mobile payments card reader developed by Twitter co-founder Jack Dorsey.  In the agreement, Starbucks committed to using Square to process credit card payments in 7,000 US stores, and CEO Howard Schultz joined Square’s Board of Directors.  This interesting partnership hinted that the two companies had something up their sleeve – and in the first few months since the fundraising round, the partnership is proving that customer centricity is possible even in high-volume, java-fueled international operations.

The Starbucks mobile payment app is considered the best of its kind in the US, generating six million transactions in the last nine weeks of 2011.  Partnering with Starbucks represents Dorsey’s goal to redesign the communication of payment to be more attractive to both the buyer and the seller: “There are ways of going about [web payment systems] that are focused on the payment mechanics (i.e. Google), but we don’t think that’s the right way to focus on it.  We think there are ways to bring that human experience to everyone.”

The Starbucks app has been used primarily to drive its loyalty program, which has resulted in multiple billions in revenue each year – and a pleasant purchasing experience.  The next phase, since the partnership, combined the Starbucks app with Square technology, which has become the “Pay with Square” app.  In the 7,000 Square-powered Starbucks, a wireless signal transfers the customer’s personal information from their app to the shop’s Square Register, allowing the barista to greet the customer by name, recall his or her “usual” drink, and offer the available discounts and perks assigned to this person based on their purchasing history.  The customer is greeted, served, and pays without ever having to remove the phone from his or her pocket – and the barista can focus on more important things, like asking about the customer’s kids, recent promotion, or weekend plans.

Square’s partnership with Starbucks represents the young company’s strategic direction: to create a product that improves and closely engages with the customer experience, and returns to “a more personal interaction between buyer and seller; one that harks back to a quainter time,” when purchases were tracked on a ledger, and friendly chit-chat was the most important part of the transaction.  It may seem like a paradox – using technology to build more personal consumer interactions – but as Dorsey says: “that is the pinnacle of technology – when the technology disappears completely.”