Dr Joseph Michelli’s Interview in South China Morning Post, Hong Kong on 23 August
Consultant helps companies get personal
Consultant Joseph Michelli’s book about the rise and rise of the Starbucks coffee company could not have been more ominously timed.
Described by Publisher’s Weekly as a “paean to one of the truly exceptional American success stories”, Michelli’s authorised corporate profile, The Starbucks Experience, hit bookstores in the United States in November 2006 and began working its way up a number of bestseller lists.
But three months later, Starbucks founder Howard Schultz penned his now famous company-wide memo, “The Commoditisation of the Starbucks Experience”, which bemoaned the watering-down of the company’s ethos for the sake of unbridled growth.
Schultz’s memo marked the start of a painful, multi-year campaign to reverse the ill-effects of over-expansion that included closing US stores by the hundred, refocusing on Starbucks’ core coffee drinks and pushing more international expansion.
“I hit a sweet spot as far as Starbucks’ rise. Everything started to turn fairly quickly thereafter,” Michelli said last week.
“Starbucks made a lot of small decisions that cumulatively were focused on investors and not on customers and they paid the price,” he said.
“Today, a lot of the money they cut in their budgetary structure has gone right back into the customer experience … they did have a loss of soul for a while, but they are back on the right path again,” he said. He has a new book deal to write a follow up, due out in 2012, called Revitalising the Starbucks Experience.
Michelli’s work focuses on teaching companies and their staff about the importance of “making a personal or relevant emotional connection with every customer through the way you design the customer service delivery system”.
Currently on his third Asian trip since October last year, Colorado-based Michelli’s clients in the region include telecommunications companies, carmakers, hotels and businesses with staff who face customers.
“There are definite cultural differences here in Asia and what people expect in terms of service and what they’ll tolerate in terms of lack of service,” he said.
He spends most of his time “looking for ways to teach employees not to just execute based on the checklist but to improvise in the direction of a desired outcome”.
“That’s a big challenge in Asia because I think in some cases compliance has been a big part of the education system,” he said. “So when you’re talking about this model you’re actually trying to encourage people to do more active problem solving beyond the script, and that can be a bit of a challenge in Asia relative to other parts of the world.”
While many companies in Asia fail to make a sales environment that connects with customers, others are almost too successful. He cites the example of Ikea in China.
“It’s really come to the point where they’ve created such a rich experience that in some ways it’s a misapplied experience. Now it is almost a recreational experience instead of a sales experience in China. Lots of people come and spend the full day there with their families.”
Overall, he says, companies are starting to pay “more attention to the fact people in China want to feel important when they buy certain products”. And not just luxury products.
“You try to create a perception of luxury across any product if you can. If it doesn’t cut into your margin to create a luxuriated sense of service delivery then why not do it? Often it is inexpensive and just a matter of training employees.”
Starbucks, he said, is a case in point. “Really, at the end of the day, Starbucks is a lot about service justifying that price point.”
He said the atmosphere in the chain’s stores instils customers with “a sense of emotion, of being in the nurturing living room of a community. You have to have the right people doing that or else it’s awful. It’s just coffee.”