10 Reasons Why Starbucks Is Successful (Why Is Starbucks so Successful + More)

If you are a business owner looking to grow your business, these 10 reasons why Starbucks is successful can help you to rebrand. Starbucks’ success is because of the focus on customer experience as the primary product.

As an entrepreneur who cannot function without my caffeine fix, Starbucks coffee is my go-to morning drink. Getting in line to order my coffee always leaves me in awe of Starbucks’ popularity and customer experience. Every time I get my morning pick-me-up there is always a large line of customers at the Starbucks drive-through waiting to make their order. While waiting in line daily can get irritating, it is interesting. Questions like why is Starbucks successful always flood my mind. For this reason, I have done my research to understand the strategies Starbucks applies to increase and maintain its popularity throughout the years.

If you are a restaurateur looking to grow your business, understanding how multi-billion dollar businesses like Starbucks function can lead you to unlimited growth and success. What you should keep in mind is Starbucks focuses more on their customer experiences as their primary product. Below are some of the reasons why Starbucks is successful. We hope that some tips may be of use to you in growing your brand.

10 reasons why Starbucks is successful

1. People-centered approach

When it comes to sustained growth and customer loyalty, Starbucks seems to be making the right moves. You would be surprised to learn that the primary product responsible for Starbucks’ success is not coffee rather, it is the customer experience. To understand how Starbucks became the mecca of coffee, we need to take a trip down memory lane to understand how Starbucks came about.

Starbucks was founded in 1971 to sell espresso. In 1986, Starbucks was just a normal coffee chain with around six stores selling coffee. Howard Schultz took a trip to Milan, a trip that changed his outlook on what coffee shops should be like. Howard observed that coffee shops in Milan did not just sell coffee but rather, focused on making their coffee shops places where friends and family could meet up and hang out.

Howard loved this and brought it up to the owners but unfortunately, he was turned down. Howard did not give up and started his own coffee house and implemented this customer experience he had observed in Milan. The idea gained a lot of popularity and eventually, Howard bought Starbucks, re-branded the entire chain, and adopted customer experience as a service. This revolutionized how Starbucks coffee chains conducted operations. Starbucks offers quality, digital solutions, and new options to their customers while also creating a premium experience for employees.

You would be surprised to learn that people don’t go to Starbucks just to drink coffee, they go for the customer experience. With a great atmosphere, relaxing music in the background, unlimited freebies and refills, great aromas, and friendly baristas, Starbucks feels like a third place away from home and work where you can relax, and hang out with friends, or finish up on work without too many distractions.

2. Brand loyalty

Have you ever asked yourself how Starbucks has consistently managed to maintain its customer base? Easy, Starbucks has mastered singular customer loyalty to sustain its earnings. Starbucks’ atmosphere, product portfolio, and growth rate through the years have remained unparalleled in the coffee chain sector. The company has successfully created a loyal customer base through systems set in place to sustain growth and revenues even in the case of economic uncertainties. These systems set in place by Starbucks include loyalty rewards and seasonal favorites.

Through the loyalty rewards system, customers can gain rewards on all the purchases they make with all Starbucks products. They are also able to earn stars on all their orders. Initially, when customers sign up, they are placed at the welcome level with a free drink on their birthday as a perk. Eventually, they are placed at the green level membership upon making purchases where they can receive free refills of drinks they purchase. The gold status has a variety of perks like free refills, birthdays, cakes and so much more.

With this system in place, Starbucks has been able to consistently build a loyal customer base of more than 3 million members in the US. This system also allowed customers to frequent Starbucks stores often thus promoting consumer loyalty.

Starbucks also releases seasonal drinks such as pumpkin spice lattes which is the favorite drink of most customers. Customers return for these products as they have become part of their seasonal drinks as it gives them something to look forward to throughout the year.

3. Giving back to the environment

Starbucks is committed to taking care of the environment. They have a plant-based and environmentally-friendly based menu for health enthusiasts. Starbucks also resorted to using reusable packaging and developing greener stores. Under the leadership of its CEO Howard Schultz, Starbucks positioned itself as an environmentally friendly company. Various policies were put in place to ethically source their coffee beans and teas, and also support local farmers that produce these.

If you are wondering where Starbucks takes all their coffee grounds, you would be surprised to learn that they give back to the environment. In 1995, Starbucks started a grounds for your garden program where they carefully package coffee grounds into bags and give them to customers to use in their gardens. This is because they realized that coffee grounds are a great source of nutrients for plants and make good compost specifically for plants that flourish in acidic soils. This eco-friendly initiative has played a great role in the success of Starbucks as people are becoming more self-aware and taking care of the environment more.

4. Location and convenience

If you are a restaurateur, then your main worry is always the location of your business. A strategic location is a major factor in the growth and popularity of your restaurant. Starbucks has mastered this.

Starbucks is a large coffee chain that has strategically placed Starbucks stores in busy neighborhoods and shopping districts which have been a major factor in the growth and success of Starbucks. The likelihood of finding a Starbucks store near your home, school, or workplace has made it easy to get your highly convenient caffeine fix.

Because of brand loyalty, customers prefer to get quality, well-made coffee from Starbucks even though making your coffee is cheaper. The customers have shown that they are more than willing to pay for quality and convenience even if the prices are extremely high or unreasonable. This factor has contributed to the sustained growth of Starbucks.

5. Quality food and drinks

When the CEO Howard Schultz visited Milan, he realized their coffee shops focused more on being a safe space for customers to hang out and spend time with loved ones while enjoying a coffee. He later set out to create a coffee house with a family feel offering quality foods and drinks and a great customer experience. Howard rebranded Starbucks to become what we now know it as.

The next step was to offer a variety of healthy food and drink options for customers with different preferences. The Frappuccino drink which was created accidentally has become a major success and a popular item on the Starbucks menu.

Over the years, the menu has changed to accommodate different dietary preferences such as gluten-free, Keto-friendly, carb-free, and sugar-free food options. This inclusivity has led to the popularity and success of Starbucks as a brand. You are likely to find a variety of food and drink options based on your dietary preferences.

6. Strategic expansion

Starbucks has adopted a strategic growth policy and successfully repositioned 600 stores for a great customer experience. This growth strategy has helped Starbucks with market penetration leading to growth by maximizing their revenue. Starbucks also planned to open stores internationally in Africa, Asia, and China which would lead to the expansion of the brand and products they offer.

However, this growth had not been done rapidly thus making Starbucks maintain their uniformity in terms of appearance and products on their menus. Even though they have opened several stores, this strategic growth has helped Starbucks to maintain its brand identity and quality of products while also maximizing revenues and profits.

By offering improved food options, fresh food and fruits, teas, and sandwiches, lunch has become a great part of getting a Starbucks order. Also, introducing the nitro cold brew in Starbucks stores is a way to entice customers to get Starbucks coffee.

What’s even more interesting is that Starbucks has become more popular in areas with predominant tea culture. The introduction of Teavana has also been a great growth driver for the company. The successful launch of Teavana in China and Europe has positively impacted the sales of brewed and iced teas.

7. Starbucks’ leadership and employee benefits

Picture this, you work for a company that treats its employees with respect, listens to them, and responds to their needs. Isn’t that great leadership? Starbucks CEO Howard Schultz uses this leadership approach and relationship behavior to guarantee the success of Starbucks. It has been proven time and time again that satisfied employees always work hard to ensure the growth of the business. Through motivation, power, and influence, Howard has been able to successfully overcome obstacles to achieve great success with the Starbucks Company.

The company uses the laissez-faire leadership approach. Starbucks is also known to have a great reputation when it comes to treating employees well. The employees are referred to as partners and receive stock options in the company. Employees are also guaranteed good wages and benefits such as healthcare, college tuition, and paid leave. Baristas and employees also receive training allowing them to grow and succeed within the company. As a result, employees are more motivated to work hard and provide a great customer experience contributing to the growth of the company.

8. Brand marketing strategies

Have you ever asked yourself why Starbucks employees always get your name wrong despite asking you to repeat it a couple of times? This is a genius strategy to gain popularity. With social media reaching a far greater audience, a lot of people posting that Starbucks would always get their name wrong led to greater brand awareness. More and more people began to order Starbucks drinks to see if baristas would get their names wrong and sure, they did. A lot of people posting this innocent mistake online contributed to the popularity of the Starbucks Company which automatically led to an increase in growing revenues.

Starbucks also uses multi-channel promotional strategies through its website, app, social media, and in-store displays to promote the brand. Sales marketing, print media, events, and digital marketing are an integral part of Starbucks’ marketing success. The strategy of product differentiation has made Starbucks stand out from its competitors.

9. Brand extension

The strategic brand extension has ensured that Starbucks remains at the top. Introducing other products has made Starbucks more popular. The company’s logo has been changed in a move to rebrand the stores. This new look tested well with Starbucks loyal customers.

Due to accelerated customer demands, Starbucks also rolled out different food options such as the Sous egg bites, sandwiches, etc. which are the perfect grab-and-go snacks for when you are in a hurry.

10. Innovation

Believe it or not, there was a time when people did not know what a latte is. Now, the game has changed and Starbucks pulls in a loyal customer base. This is called innovation. Starbucks no longer feels the pressure to launch new products as customers are obsessed with their existing menu items. By offering aesthetic drinks that are Instagram-worthy, customers naturally gravitate towards Starbucks.

Conclusion

When it comes to coffee, Starbucks is the first company that comes to mind for many. The company has successfully built a loyal customer base due to the strategies it has set in place. Brand extensions, strategic locations, focusing highly on the customer experience, and the great ambiance have greatly impacted the success and growth of Starbucks throughout the years. Starbucks has managed to create a place away from home and work where people can work, hang out, eat good food and drink coffee without any disruptions.