Starbucks is considering investing $40 million to increase customer satisfaction. The document discusses Starbucks' service quality model and focuses on reliability, responsiveness, assurance, empathy and tangibles. It recommends that Starbucks invest the $40 million as it could shift an average of 7,808 customers per day to a highly satisfied category, generating over $100,000 in additional daily revenue. An alternative is to invest in product innovation or target new customer groups instead of customer satisfaction.

1. STARBUCKS: DELIVERING
CUSTOMER SERVICE
GROUP 01
• Alpas Sachan
• Aman Tushar
• Puja Mandal
• Sethu KP
• Shubham Srivastava
• Rakesh Singh

2. The Problem Statement??
• Should Starbucks invest $40 million to increase customer
satisfaction??
• Does it worth the investment??

3. 5 C’s

4. Service Quality Model
RELIABILITY RESPONSIVENESS ASSURANCE EMPATHY TANGIBLES
Starbucks prided on
offering the best
quality coffee in the
world.
Refill of drink in case
of spillage.
Brand component of
atmosphere .
Providing drinks and
beverages according
to customers need.
T-Mobile HotSpot
wireless internet
service.
Trained baristas to
provide pre-
established quality
standard services.
Providing sample
drink in case
customer does not
have cash.
Introduction of SVC. Stores opened at
most of the
convenient business
hours.
Providing seating
areas for lounging
and lingering.
Focussed on
customer intimacy
thus providing
promised services to
customers.
Customized drinks
to customers.
Cardholders tend to
visit Starbucks twice
as compared to cash
customers.

5. Recommendation
• Starbucks should invest $40 million in service improvement.
• An avg. of 7808 customers/day (North America – 3496 stores)shift
from satisfied to highly satisfied category
• Avg. increase from highly satisfied customer/day = 4.42*(7.2-
4.3)*7808 = $100083
• Increase in average customer life.

6. Alternatives Analysis
• Instead of investing $40 million in increasing customer satisfaction,
Starbucks can invest in product innovation or targeting the new
customer group that comprised of the lower income and less
educated people for whom Starbucks was not economical.

7. THANK YOU