If there was any doubt that Starbucks had attained Alpha status, it’s certain now.  With all the talk of downsizing and closing of stores due to “over-expansion,” many pundits have thought that perhaps Starbucks is just another one of those sad stories of poor management caught in an economic downturn.  The truth, however, is being displayed clearly through their customers.

An article in The Wall Street Journal today by Janet Adamy and Anna Prior discussed the customer response to store closings.  Reminiscent of the customer outrage that saved Coca-Cola, when it made the terrible mistake with “New Coke,” we are seeing one of the strengths of an Alpha at work again through Starbucks.

One of the key benefits of becoming an Alpha company is that you can weather difficult times and even bad management decisions better than “normal” companies can.  That extends to the point that an Alpha’s customers will often save it from really bad mistakes.  We are witnessing this at work right now.   By having made themselves the customer expectation leader so that every other coffee shop wants to either emulate or overcome it, Starbucks has made itself a part of American life that people don’t want to have to do without.

According to the WSJ article, all across America — from major metropolises like Manhattan to small towns in Mississippi and Nebraska — Starbucks customers ranging from local neighbors to business owners and managers to city mayors are contacting Starbucks headquarters to lobby for their local stores.  Starbucks has made itself a draw for attracting people and businesses into a community and for attracting employees to businesses near a Starbucks store.

None of this would be happening, if Starbucks had simply managed its business to be a top moneymaking machine, as business schools teach us to do.  It has only been due to Starbucks’ focus upon fulfilling high-level customer emotional needs (self-satisfaction and personal significance) that it is enjoying this level of customer support.  Customer expectations from a coffee shop have changed significantly all across America due to Starbucks.  No cost-side management could ever have created this phenomenon.  Only by understanding and fulfilling these revenue-side customer needs has Starbucks made itself anything more than one more pretty good coffee shop.

Hopefully, Starbucks’ management will recognize that the reason behind their slowdown is not just “over expansion,” but also (and probably more importantly) a loss of focus upon continuing to raise customer expectations by driving them into higher and higher emotional fulfillment (again refer back to The Alpha Factor for a discussion on the core concepts of self-satisfaction and personal significance in driving purchase decisions).  There has been a noticeable decline in customer experience in Starbucks stores wherever I travel.  When I talk with store people, this focus seems to have been replaced with more focus upon new equipment.

Bad move.  Luckily, being an Alpha, they have time to get back to the focus that got them where they are.