Starbucks: A Model of Success

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A new book offers a glimpse behind Starbucks’ massive success. Pour yourself a cup of inspired leadership, and maybe you can caffeinate your business.

If you’re an entrepreneur in need of an energy jolt, odds are that you head straight to Starbucks. And if you’re looking for a jolt of business inspiration, you’d be hard pressed to beat Starbucks as a model of success. The company earned $3.6 billion in revenues during its fiscal second quarter this year—that’s a lot of beans.

However, it takes more than capitalizing on a national love affair with caffeine to build a successful empire. In his book, “Leading the Starbucks Way,” author Joseph A. Michelli looks at different strategies Starbucks uses to create its success, and he shows how businesses of any size can adapt the those tactics to fit their business. Michelli recently shared some of those findings in an article on Small Business Computing.

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Personal Passion

Michelli’s first piece of advice is to “focus on fueling passion.” You can’t build customer loyalty without it. Of course, true passion isn’t something you can fake; customers will pick up on that immediately. You—and your employees—really need to love your products and services in order to help customers fall in love with them.

The company also excels at creating great rituals, which furthers customer loyalty and mindshare. Reexamine your business in this light: what rituals can you incorporate to recapture the passion and excitement you felt when you first started your business?

An Emotional Connection

Starbucks offers more than a high-priced cuppa joe. It provides an emotional experience: a retreat from a busy day, a place to meet and share with friends, a comfortable, daily destination. It’s welcoming and homey. That uplifting experience forms strong emotional connections, which in turn drives repeat business.

Ultimately, your customers want to feel that you care about them. Find and tap into the emotional value proposition of your business.

Stand for Something

Often companies avoid taking any kind of stand on issues of the day for fear of losing customers. But by doing that, says Michelli, they “create very little passion.” Case in point, through the strong leadership of its CEO, Howard Schultz—who was a driving force for the Create Jobs for USA program—Starbuck’s is known as a pro-jobs company.

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Neither did the outspoken Shultz mince words with a stock holder who expressed dismay over the company’s support of marriage equality.

“We employ over 200,000 people in this company, and we want to embrace diversity. Of all kinds,” said Schultz. “If you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares in Starbucks and buy shares in another company. Thank you very much.”

It’s not about jumping on the hottest issue of the day or being controversial merely for the sake of controversy. It’s about incorporating your principles into your business, communicating authentically and ensuring that your actions mirror your principles.

One of the reasons customers continue to patronize Starbucks is that they feel as though they belong somewhere. How can you give your customers that sense of belonging?

Adapted from Leadership Lessons from Starbucks by Pedro Hernandez at Small Business Computing. Follow Small Business Computing on Twitter.

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