So I was at Starbucks to get coffee for a friend this morning.

I got a card and told the cashier to please load $10 credits into the card and use that for my purchase right away. She mistakenly loaded $6 instead.

I said, “okay, just load the $4 then”. Then she said she can’t because the minimum top-up should be $6. I said, “kindly fix it”. In my mind, she already inconvenienced me and I will not let her inconvenience me more. I know there are ways around it.

It took her a bit of time to figure it out and I was getting annoyed. I was obviously not happy with how the transaction is going and the manager swooped in, asked about the problem, provided a solution, and worked fast.

Unfortunately, the machine had a glitch and couldn’t do it ASAP. So I said, “ah just give me my money back I’ll pay for it in cash.”

She said it’s about to be finished and I was fidgety but didn’t say anything.

I looked away, saw another Starbucks supervisor, who saw me, knew what was up, came to me, apologized, and gave me a coupon for FREE COFFEE for my next visit. He apologized profusely, promised to look at the glitch, and told me he hoped to see me again. He guided me out and opened the door for me, too.

I don’t drink coffee so I don’t care about the freebie, but I am absolutely impressed at that male supervisor. He was able to handle it correctly by just giving me one look.

He knew the formula for handling an unhappy customer:

  1. Apologize
  2. Listen
  3. SOLVE THE PROBLEM. ASAP.
  4. Give a promise to not repeat it next time, or a promise to a solution to a similar problem.
  5. Give a gift as form of service recovery. Give them a reason to come back.

Once again, I am reminded of one of the most important business lessons I’ve always followed – RETENTION BEATS ACQUISITION.

You make more money retaining happy customers, and buttering them up to spend more rather than trying to get new customers.

There are several local companies who don’t train their people well and/ or are hesitant to cancel or give the item/ service for free. Please don’t be one of them! They do nothing for service recovery so they lose the customer for good.

Here are other key statistics to remember with their sources:

  1. A customer is 4 times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.
  2. The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.
  3. For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.
  4. A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
  5. 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.
  6. A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.
  7. Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affair.

To local companies, Etsy sellers and handmade businesses still fall behind in service… THIS is the difference between you and Starbucks.

Let me hear your thoughts in the comment box below!

Gary Capps

I live in the one of the most beautiful places in the world on the Sunshine Coast in Australia with my wife and our 2 dogs, Poppy and Mia. Since 2009 I have helped over 15,000 handmade business owners to grow their business with our software and free tools designed for todays entrepreneurial artisan.

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2 Responses to “The Difference Between Your Handmade Business And Starbucks”

  1. Peggy S. 04. May, 2017 at 11:40 am #

    This advice is golden. Retired two years ago from a successful business built on solid customer service.

    My own motto is to treat the customer as I would want to be treated.

  2. Sharleen Christian 18. Apr, 2017 at 1:06 pm #

    I think as a handmade business owner putting our merchandise on a website carries with it the lack of one on one face to face with the customer. Extra effort must be asserted to create a friendly and inviting sales experience. As your blog expresses an immediate response needs to be taken if an error happens. This is even more critical then Starbucks because of the lack of physical presence and the level of trust and satisfaction you wish to maintain with a customer who only knows you through the internet. Of course many other measures as mentioned must also be taken.

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