Image Credit: kmf164
Clearly product managers at the Starbucks coffee chain have no problems getting customers to drop by their stores in the morning and purchase coffee. However, as is the case with product managers everywhere, the Starbucks product managers are under pressure to keep growing the firm’s profits. If they are going to do this, then they need to come up with a way to get their morning customers to come back to the stores later in the day and buy more coffee.
The Challenge Of Repeat Visitors
So what’s the problem here? Starbucks gets roughly 59% of their store traffic in the morning when people come in to buy their first cup of coffee for the day. The afternoon only contributes 23% of a store’s traffic. However, this is still a sizable chunk of a store’s business and should look good on anyone’s product manager resume. Getting more customers to come and visit a Starbucks coffee store during the hours between lunch and dinner has become a new challenge that is facing the Starbucks product managers.
Starbucks does not publish any statistics about what time of day their customers come and visit their stores. However, as their sales in the U.S. have started to slow down, Starbucks has started to blame sluggish afternoon traffic to their stores. They say that they are only attracting customers that they define as being “occasional customers”. These types of customers are the ones who visit the chain one to five times a month. Starbucks is determined to spend more time boosting their afternoon traffic and so they recently sold off their packaged-coffee business.
In order to find a way to get more people to visit their stores in the afternoon, Starbucks product managers now understand that they need to start to focus more on the occasional Starbucks drinker and perhaps change their product development definition. In the past, the focus has been on attempting to make the coffee chain appeal to the roughly 15 million people who had signed up for the Starbucks customer loyalty program. It turns out that the 60 million people who visit their stores who are not currently part of the company’s loyalty program buy more products in the afternoon than they do at any other time of day. However, the problem is that these people are not visiting the stores often enough to boost sales.
Starbucks Plans To Get Repeat Visitors
One of the biggest challenges that the Starbucks product managers are facing has to do with customer routines. Our morning routines are relatively fixed. We all do the same thing each morning. However, you cannot say the same thing about the afternoon. Our afternoons have a pit stop in them when we either want a physical or an emotional break. When this happens, consumers have a lot of different options if they want caffeine. Supermarkets offer bottled cold coffee, convenience stores offer coffee, and customers can go to either McDonald’s or Dunkin Doughnuts.
The Starbucks product managers have been studying their occasional customers. What they have learned is these customers tend to drink cold beverages. In order to better meet the needs of these customers, Starbucks is getting ready to start to offer more cold coffee and tea drinks and will be rolling out a “happy hour” promotion in order to get the word out about their new cold beverages. Normally Starbucks does not do very much advertising; however, in support of their new beverages they are planning on doing a great deal of advertising.
A key part of any customer’s visit to a Starbucks is customer service. In order to provide the best possible customer service, Starbucks is putting more of their experienced baristas to work in the afternoon. The training of new employees will now take place during the morning. The company also plans on reducing the number of limited time offers in order to simplify store operations. The hope is that this will allow baristas to concentrate more on providing excellent customer service. One other area that the Starbucks product managers have to work on is food offerings. Consumers think that Starbucks food trails other fast food chains. This is a big problem because the right food can go well with a cold coffee drink.
What All Of This Means For You
Product managers at Starbucks have a real success story on their hands. However, now they find themselves being challenged to bring in even more money. They’ve done an excellent job in getting people to visit their stores in the morning. Now all they have to do is to look at their product manager job description and find a way to get them to come back in the afternoon.
Starbucks has no problem getting people to visit their stores and buy coffee in the morning. However, they don’t have enough people visiting their stores in the afternoon. Right now the people who are coming into the stores in the afternoon are “occasional customers” who only tend to visit the stores one to five times a month. The Starbucks product managers have discovered that the people who visit their stores in the afternoon are not part of their customer loyalty program. When people want to get caffeine in the afternoon, they have a lot of different options for where they can get it. The Starbucks afternoon customers tend to buy cold drinks and so Starbucks is going to roll out several new cold drinks. In order to keep these customers coming back, Starbucks is putting a new emphasis on customer service in order to ensure that customers have a good experience and will want to return.
Starbucks is a very successful coffee company. However, in order to keep growing they need to find ways to get customers who shop with them in the morning to come back and buy more later in the day. They already have a steady stream of afternoon customers, they just don’t shop at Starbucks often enough. The Starbucks product managers have a number of different plans to get these customers to become more regular customers. We’re going to have to watch them closely and find out if Starbucks is where people start to go to get their afternoon caffeine buzz.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: What could Starbucks product managers do to get morning customers to return again in the afternoon?
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What We’ll Be Talking About Next Time
If you lived in a modern city, how would you chose to get around town? Yes, you could always walk – however, that’s going to take a lot of time and you are going to be tired when you get where you are going. There are cabs / Uber / Lyft and these all work, but they can quickly become quite expensive. Most cities have buses and subways, but how far away from you is the closest stop and how close is it going to get you to where you want to go? In these modern times in which we are living, it turns out that you may have another option – ride a bike.