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Impact of CRM on Customer Retention (A Case of Starbucks)

Executive Summary:

Impact of CRM on Customer Retention Essay (Starbucks Case Study):

In the present era where performing business in an international level has become a tough work, organizations have prolifically carved out significant strategies that would enable to boost their business operations leading them to generate revenues as well as achieving the corporate goals. One of the most significant techniques that have been opted by organizations over the past few years is to emphasize on customer relationship management for customer retention.

For achieving the goals and objectives it is always essential for an organization to understand the importance of CRM as well as the need of customer retention. This significant report provides key insights aiming to explore the relationship between CRM and customer retention at Starbucks. The report highlights the explorative research for evaluating the impact of CRM on customers. With the help of analysis of the research methodology, research process, research, design and data analysis technique this specific report provides in-depth analysis about the chosen topic.

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Table of Contents

Executive Summary 2

Introduction 3

Aims and Motivation 6

Brief of the Organization 8

Research Objectives 10

Literature Review 11

Research Gap 21

Research Methodology 23

Data Analysis 32

Interpretation and Findings 35

Gantt chart 37

Contribution of Research 38

Discussion and Conclusion 39

References 41

Appendix 47

Introduction

There are various factors that ascertain the success of an organization in the international market. There are various factors that critically evaluate the threats that an organization faces while performing their specific business operations. Due to the increase in competition level many issues have prolifically impacted the organizations due to the new appearance of the emerging market. For having a in-depth knowledge about the market and understanding the potential trends along with the preferences of the customers it is always essential for an organization to critically emphasize on the marketing strategy in a significant way for seeking growth and profitability. Immense amount of studies and research are presented by the earlier researchers on the topic of customer relationship management and customer retention. Whenever an organization plans to emphasize on the loyalty or relationship with the customers the prolific presence of some key factors plays the major role. Evaluating this specific research the organization Starbucks has been considered for completing the entire research study.

Evaluating the importance of customer relationship management and the implementation within an organization it must significantly observed about the importance. According to various researches conducted previously it has been reviewed that customer relationship management is the most dynamic aspect that influences the organizations in retaining its existing customers and attracting the potential customers. It must be observed that customer relationship management and customer retentions specifically depend on the balanced mixture of business strategies, budgets, technologies, training and knowledge. Considering the factors that enable the customer relationship management to impact the customer retention procedure within an organization are as follows:

  • Information Technology: The first and the foremost factor that influences the CRM impacting the customer retention procedure is the prolific implementation of information technology in business. Information technology involvement is at all time high in the present and will be the future of business. For assessing the needs and demands of the customers and retaining them the customer relationship management must compliance with the information technology that would to gain proper databases of the customers along with the market trends. Information technology is a beneficial aspect and therefore it can be quite important for retention of employees by the customer relationship management (Kumar, 2010).
  • Management Commitment: Customer relationship management enables the organization to build up a healthy relationship with the customers that result in customer retention for longer time period. Effective CRM and customer relationship therefore both is related to loyalty and satisfaction of the customers. Management commitment is therefore considered to be the most influential aspect for enhancing the productiveness of the customer relationship service and customer retention. Keeping the commitments done by the management of the organization enables the organization to be benefitted by having a healthy relationship with the customers and the customers being loyal to the organization. Not keeping the commitments by the management can also lead to foul relationship with the customers that can negatively impact the organization’s profitability as well as the growth (Knox et al. 2007).
  • Human Resource Knowledge: Assessing the research conceptual model it can be prolifically assessed that the customer relationship management is closely related to the human resource knowledge. The human resource management must play the most important role in ascertaining the need of customer relationship management and how it can be beneficial in retaining the customers for a longer time period. Effective knowledge of the human resource would enable to provide prolific variables in regards to customer relationship management and customer retention. The human resource management of the organization must prolifically look into the productivity and commitment levels of the organization that enhances the possibility of the customer relationship management of the organization for building an effective relationship and loyalty of the customers. The customer retention aspect is therefore dependent on the specific role played by the human resource and the customer relationship management (Berry and Linoff, 1999).
  • Knowledge of CRM: It is important for an organization to have in-depth analysis and knowledge about the customer relationship management. The customer relationship management is considered to be one of the most important ways for organizations to retain their customers. Having a significant knowledge about the customer relationship management enables to understand the key prospects and functioning of CRM. Effective knowledge can be quite beneficial in communicating with the customers and evaluate the significant needs and preferences by which the organization can provide satisfaction to the customers. Moreover the knowledge of CRM not only helps in knowing the customers and building relationship it also enables to research about the market that enables the organization to take significant steps that would help in implementation of necessary strategies and plan for sustainability (Wagner and Zubey, 2006).
  • Organizational Culture: The customer relationship management and customer retention prolifically depends on the organizational culture too. The organizational culture is also termed as one of the most influential aspect that drives the customers to get attracted and be loyal to the organization. Despite the customer loyalty and retention depends on the customer relationship management and the strategies being implemented by the organization, organizational culture also plays a key role in influencing the customers. The organizational culture impacts both the internal as well as the external environment and therefore the culture of the organization is considered to be the most effective functioning of the customer relationship management. If in any case there are issues pertaining to the culture of the organization the CRM would not be able to function properly which will negatively impact the relationship with the customers. For having a significant influence on the customer relationship, loyalty, satisfaction and customer retention it is essential for the organizational culture to be effective. Effectiveness within the organizational culture would enable proper functioning of the customer relationship management and it would also help in retaining the customers that would lead to the growth of the organization as well as generate significant revenues (Brown and Coopers, 1999).

Aims and Motivation

Over the past few decades, the international market has changed rapidly bringing in various significant ways that would enable an organization to perform its operations and activities in a prolific way. It has been critically observed that the modern trend of performing business at an international level is way too different than the traditional way of performing business. The significant change has paved out path for the organization to implement wide range of strategies, tactics and investment on various areas that enhances the success rate of the organization. Moreover organizations invest much more time and money on building a strong human resource management considering it as the spine of the organization. According to various sources, an establishment of an organization prolifically depends on the human resource management which enhances the organization’s productivity, sales, and revenue generation. Considering the distinctive ways of performing business, most of the organizations in present day seek for analyzing and evaluating the market for having an in-depth knowledge of the market trends and the audiences. The choice of this significant study of target market helps the organization in the production of services and goods as per the needs, demands and preferences of customers. This helps the specific organization in accumulate the necessary profit they seek for. Having an acute knowledge about the market trends and market research, organizations are able to understand the prolific level of customer satisfaction and this significant level evaluates the degree of profitability. Thus, it can be assessed that profitability of an organization is directly related to the customers’ satisfaction level of using any significant product or service (Linoff and Berry, 2011).

Due to the evolvement of varied ways in performing business, most of the organizations have specifically emphasized on acquiring more market share and profitability. This has ultimately led to huge competition in the international market. Due to the increasing rate of competition and the growing rate of availability of substitutes organization tends to face concern related to customer retention. It has eventually become one of the primary concerns and therefore organizations are more focused on the significant level to satisfy the needs and demands of the customers. It has been observed lately that the organizations which are unable to retain their customers and attract the potential customers has failed to acquire market share and moved to an organizational grave. Customer retention has become an important factor that has paved the way for continuous monitoring and research of the market trends and consumer preferences and needs. Such emphasis has led the organizations to enhance the marketing mix which has enabled to focus on the products, price, place and promotion. This entire scenario has also led the organizations to emphasize on the cross functional decisions for achieving the declared objectives and goals, along aiming at profitability. Evaluating all the necessary factors and the market scenario it can be ascertained that this has led the organizations to focus on establishing a consumer relationship management for retaining consumers on a wide scale and staying competitive in the market (Chen and Popovich, 2003).

This specific research paper prolifically aims on analyzing the key conceptual analysis about the impact of customer relationship management on customer retention. Considering the importance of this specific topic in the modern era a case of Starbucks have been selected for providing in-depth analysis and evaluation. The major aim of the paper is to highlight and focus on the importance and effectiveness of customer relationship management in an organization that would influence the consumer retention techniques for the significant need of organizational success. Key aspects like research objectives, methodology, data analysis etc. will be considered and evaluated for having a significant outcome. The entire research based on consumer retention would highlight the descriptive review of an organization’s need of customer relationship management and its impact (Barnes, 2001).

Brief of the Organization

Starbucks is one of the most reputable and successful beverage organizations of the world. Established in 1971 by three businessman with the intent of selling high quality whole beans coffee, the inclusion of Howard Schultz changed the entire concept of the business. Howard Schultz expanded the business of selling high quality beans coffee with the name Starbucks. The major intent of the business is to provide high quality coffee to its customers and the major goal is to achieve retail expansion, provide short term and long term service quality and product innovation. In Seattle, Washington the first coffee store of Starbucks was opened. In year 1990, the organization expanded the headquarters in Seattle and also opened up a new roasting plant. By the end of the calendar year, Starbucks opened about 60 retail shops in United Kingdom. By the end of 2000 Starbucks had a total 3500 coffee branches and was started being considered as one of the most prolific and growing industry in the world. The major reason behind the success of Starbucks was the unique business strategy. According to a survey conducted by the United States national coffee association, about 49% of Americans in between the age group of 18 to 50 consumes coffee every day. It was by the end of 1990 that the coffee industry flourished and reached its ultimate peak (Anton, 1996).

Starbucks kept on achieving successful business heights due to its implementation of specific strategies and tactics. Starbucks also emphasized in assessing the consumer habits and sharing the preferences in coffee within the buyers. This has enabled the organization to be successful as well as ascertain an important change within the economic policies of the world. Continuously researching the market enabled Starbucks to acquire the target market i.e. especially the young professionals. The strategy of Starbucks mainly includes the location of stores mainly where the youth professionals can be attracted. The sales of Starbucks mainly depend on the organization’s certified retail operations and retail stores. Starbucks to expand their business sells their tea and coffee products via distinctive channels like hotels, universities, colleges, restaurants and various other workplaces. Fleisher and Bensoussan critically explained that the target market of Starbucks is from the upper segment people who are educated and wealthy and agree to pay high process for Starbucks products because of the customer service and high quality products. The another significant objective of Starbucks was to mainly establish their own brand as a reputable and leading brand in coffee market by providing high quality end products, better relationship in between the customers and the organization and providing quality services (Winer, 2001).

Starbucks adoption of distinctive strategies for building the brand in the market has been the key prospective for attaining success. The organization has various capabilities like the market leadership and the supply chain management that enables the customers to get their significant needs and fulfill their specific demands. Most importantly, Starbucks has been successful due to its broadening of business ideas and strategies. Porter explained that there are three significant strategies that an organization can implement for establishing them in the market i.e. focusing on the market, cost leadership and differentiating it from the other organizations. Starbucks have always emphasized on the aforementioned factors that has enabled them to hold their market share by the unique and self created strategy. Starbucks has always focused on the internal and external operations by focusing on the marketing mix tool that has enhanced the increase in demand for the Starbucks products. Due to the broad strategic levels and treatment of consumers as well as employees with respect and dignity has enabled Starbucks to position themselves and coordinate the strategies for being called one of the most successful organization and brand in the competitive market. The achievement of Starbucks can be summed up by the strategic and tactics implementation and the preferences of customer relationship management which has enabled them to hold on to the market share and retain the both the existing and potential customers. With the unique strategic measures of customer satisfaction Starbucks has been able to ascertain the growth as well as the success of the organization at the international market (Payne and Frow, 2005).

Research Objectives

The significant concept of managing relationship in a business has been existent from quite a time now. The organization in the modern era prolifically realizes the importance of managing the customers in an effective way for improving the sales and generates revenue for the betterment of the organization. Due to the current business environment i.e. extensively competitive, organizations takes significant measures for maximizing the benefits of a good customer relationship. In fact the present customer management often calls for a straight contact in between the marketers and the customers for keeping the customers and building relationships for a longer tenure. This aspect has therefore led to the need for customer relationship management and required organizations to invent prolific ways of dealing with the customers, making prolific advancements for ensuring that they are up to date with the preferences, needs and demands of the customers.

Assessing the importance of customer relationship management in customer retention, the major purpose or the objective of this research is to find out the prolific elements that are required to be considered by Starbucks to evaluate the needs of customer retention by the essential impact of customer relationship management. This specific research helps in defining the elements of customer retention and impact of customer relationship management which is required by organizations like Starbucks to seek growth in the competitive market. This research also studies about the major targets that demonstrate the issues faced by Starbucks in the international market for holding on to the market and the customers. This research is also helpful for various other organizations to provide significant lesions about the importance of customer retention techniques and the impact of customer relationship management on customer retention. By studying the findings and results of the research, developing companies can also initiate significant strategies and plans in regards to CRM and customer retention for proceeding forward in the international market (Reinartz et al. 2004).

It is quite important for organizations to have significant knowledge about the retention strategies and evaluate the key factors that impact the success of an organization. Considering the case of Starbucks, the research objectives of this specific research are as follows:

  • To measure as well as understand the direct impact of customer relationship management on the customer retention.
  • To provide in-depth analysis about how Starbucks emphasizes on the techniques of customer retention and evaluate the customer relationship management for attaining the organization’s objectives.
  • Another key objective of this research is to prolifically inspect the interrelationship in between the customer relationship management and the customer retention.
  • To evaluate the important factors that impacts the success of Starbucks.
  • To evaluate the significant techniques how Starbucks can utilize the key strategies of customer retention and customer relationship management for the success of the organization.
  • Lastly, to provide adequate recommendations in terms of customer relationship management and customer retention techniques that would enhance the attainment of the goals and objectives in a better way.

Literature Review

Customer Relationship Management

Assessing the significant advancements in technology and time, organizations performing at an international level have eventually changed the market practices due the immense competition persisting in the market. The change in marketing practices has not only provided prolific knowledge but it has paved way for understanding the significant knowledge of marketing practices. It has been observed that the modern and the new marketing procedures are based on acquiring effective knowledge and understanding about the experiences and preferences of the customers. Customer relationship management also termed as CRM has become one of the prolific management aspects in the present era. The customer relationship management is defined as a two way procedure that is also known as an interactive procedure that utilizes the customer information to maintain the relationships with the customers. Customer relationship management is also considered to be a cycle that consists of significant actions like market planning, finding knowledge and enhancing the customer interaction along with refinement of analysis. Knox and Ryals in 2001 proposed that the fundamental factors of customer relationship management are based on certain key aspects like customer retention, delivering high and superior quality services and strong relationships by the prolific help of process management. Organizations that plan to implement the effective strategy of customer relationship management must create integration in between the organization and the distinctive departments of the organization. It is critically important to break down the walls in between every single unit, mainly the department that looks into the marketing affairs. The marketing department must also actively work with the information technology department so that the information of the customers can be efficiently retained and utilized for the prolific purpose of relationship management and customized production. From the late 1980’s the prolific trend of marketing of database is intensifying which significantly provides a critical overview about the needful influence of information technology on marketing. This prolific factor facilitates the organizations to maintain long term promising relationships with the existing customers as well as build new promising relationships with the potential customers (Verhoef, 2003).

Eckerson and Watson claimed that the customer relationship management significantly coordinates the touch positions around the widespread view of the customers. As the business of an organization enlarges the amount of customer relationships needs to be managed due to the exponential increase. In this situation the integration of various departments within the organizations must collaborate about the information of the customers for providing emphasis on the interaction of the customers for serving them better. Customers have overt and hidden preferences which significantly provide the marketers to build a learning relationship. Traditionally the marketers use to attempt in interpreting the needs of the consumers evaluating their purchasing behaviors. Presently, the involvement of consumer generated media has enabled the marketers to learn about the behaviors and preferences of the customers. The major aim of the marketers is to keep the customers satisfied and keep them dedicated as well as loyal towards the specific organization. Considering this significant aspect the information enabled relationship marketing is considered for storing, collecting and analyzing the information and data that would enable to build a essential relationship in between the customers and the marketers. The customer relationship management prolifically attempts to imply a strategic connection between the marketing strategies and information technology aiming at creating profitability and long term relationships. This mainly needs information intensive strategies which are critically important for maintain the needful customer information management systems by obtaining the customer feedbacks and consolidating the customer databases (Newell, 2001).

According to various sources, the customer relationship management is considered to be the most trending and latest idea in all form of available businesses that has provided the significance quickly over the past few years, and it is expected to extend due to the addition of the value added services and latest technologies in the upcoming future. The customer relationship service has influenced the business activities at an immense level and it therefore focuses on the marketing mix concept variables including the four P’s of marketing mix i.e. product, place, promotion and price. According to Xevelonaki, customer relationship management provides the organization with the prolific chance of employing the relationship marketing aspect successfully. He further explained customer relationship management as a basic technique of relationship marketing and a prolific procedure that helps an organization to retain the market share via the existing consumers and moreover, it also enables to provide the capabilities of retaining the existing customers. Customer relationship management prolifically assesses the needs of retaining the existing customers of an organization through promising responsibilities and building up the relationship. The customer relationship management comprises of various components and therefore it is considered to be a lifelong prescription of a business. It has been specifically observed that the unique composition of the customer relationship management components along with the interrelationship of the significant components is quite essential for amassing the advantages of CRM implementation in an organization that is customer centric. It must be prolifically ascertained that the primary aim of the customer relationship management is to significantly maximize the organization’s and customers’ relationship for a longer period of time. Richard and Jones critically explained that the customer relationship management enables an organization to integrate and forge itself into the purchasing practices of the consumers along with developing a connection and tight bond (Ngai et al. 2009).

Customer relationship management as explained by Zablah in five distinctive aspects includes customer relationship management as a significant process that deals with the relationship and engagement creation with the customers, Customer relationship management as a significant strategy that defines the direction of the organization’s investment towards its precious customers, Customer relationship as a philosophy that highlights the long and critical thought process that enables the customers at the focal point of the organization, customer relationship as an ability that refers to the proper use of the presented and available information about the customers to the customary organizational behavior for meeting the expected demands of the customers and lastly, customer relationship management as a technology that referred to integrating the organizational systems for addressing the needs of the customers. These significant points defined customer relationship management as an action within the organization that takes care of the customers associated with the organization, its levels of knowledge management and efficiency within the organization. According to Zablah, a prolific mix of these good elements will ensure that the effective decisions made by the organization are for the best interest of the customers that would help in enhancing the organizational performance and market share at large. Considering the initiation of technological advancements Norton, critically proposes that the major idea of the customer relationship management has prolifically been transformed to E-CRM i.e. electronic customer relationship management. According to him, the E-CRM is a coalesce process of software and hardware technology process as the significant application enables to enhance the technology for organizational commitment and customer services for improving the lack in retaining customer and increase the potential of customer service. Ab Hamid also emphasized on the electronic customer relationship management as a prolific process to maintain the customer relations by the use of technological advancements i.e. internet and the benefits are critically obtained by the successful use and implementation of idea and electronic customer relationship management in an organization. He further added that the advancement in technology has significantly changed the customer relationship management into electronic customer relationship management due to the need of the organizations, as internet technologies can be significantly used for attracting potential customers, analyze their behaviors and preferences and then customize the needful services and support by presenting the personalized services. The key focus of electronic customer relationship management system is to retaining customers, amplifying the customer service, amplifying the benefits of customer value and the significant use of mandatory strategies for encouraging the customers to remain dedicated and loyal (Buttle, 2009).

Ylikoski claimed that a good relationship in between a customer and an organization is the significant type in which both the parties benefits from and this forces them to continue the relationship depending on the major question of what sort of services are provided by the organization to the customer. He proposed that resources and time that has been taken to increase the customer relationship would be squandered if the customer plans to opt for a substitute. It is important to know that, involvement of financial profits can be gained if the customer can be tied into a long term relationship. However, it must also be assessed that a loyal customer would also tend to be a profitable customer instantly because of the essential resources that are used for capturing the customer and amplify the relationship. There is a decline in customer relationship cost over time while the organization has quality information about the customers and thus it helps in serving the customers more effectively considering the information. It is also important to know that a satisfied and loyal customer can also pay more for the quality services they receive. This significant aspect can be quite beneficial for the organization to generate quality revenue as well as keep tabs on the relationship with the customer. Migdad moreover explained that there is an important relationship in between the quality of the information and customer relationship management system quality. The system quality along with the service quality of customer relationship management helps the top management of the organization to support the success of the customer relationship management implementation. Migdad and Brotherton also proposed that the critical success factors must also be considered to be the prolific amalgamation of process and activities that are designed to support the achievement of the necessary results that are specified by the organization’s goals and objectives (Parvatiyar and Sheth, 2001).

The electronic customer relationship management is mainly for the people of all levels in business who are intended to create up interaction with the consumers by the means of technology and electronic aspects. It is thus quite important for realizing the major role of electronic customer relationship plays within the dynamic and contemporary marketing organizations. By successful implementation of customer relationship management, organizations can be benefitted by generating profitability and help to provide mutual benefits for the service providers as well as the customers. This significant aspect highlights that customer relationship management can bring in distinctive advantages for the organizations to increase e ability in the present competitive market, increase in profit rate and profits, reduction in costs, reducing implementation times of new activities of sales, increase knowledge and information about the customers and increase prolific awareness of low sized target marketing. This prolific research evaluating the case of Starbucks examines the impact of customer relationship management on customer retention. The major objective or aim of the research study is to estimate the customer relationship management influence in creating dedication and loyalty among the customers for retaining them for the growth and profitability of the organization. As there is technology and frequently changing dynamic environment, Starbucks being a reputable international organization thinks about the significance of customer retention and customer loyalty as a prolific management attempt and decision to expand the concept of customer relationship management and electronic customer relationship management. With the essential help of electronic customer relationship management, the customer information can effectively flow into Starbucks and would be used in analyzing the customer databases as well as emphasize on retaining the strong relationship with the customers via unexpected services (Boulding et al. 2005).

The major reason the customer relationship management has surfaced such extensively because of the frequent changeable nature of the international market environment. Presently multinational organizations like Starbucks are now emphasizing on customer oriented strategy along with product oriented strategy and therefore it is becoming one of the key reasons for organizations to achieve their respective goals and objectives. The participation of the customers and the customer profiles significantly impacts the customer relationship management. For influencing the customer retention aspect, organizations creates customer profiles for collection of all important information about the customers. This acquirement of such information lets the organization know their customers which enables them to determine the investment ratio to be done on the customers. Organizations also gains potential advantages from the customer participation process. Participating customers via significant ways interact with the organization and share information as well as their experiences (Wang et al. 2004).

Customer Retention

Previously, no attention was given to the preferences of the customers and most of the times the customers were disregarded. Due to the unavailability of wide range of substitutes the customers use to face significant issues in finding alternative marketer or producer. In some scenarios it has been observed that the customers were deprived of the service and quality factors and the immense growing market did not emphasize on the needs, wants and satisfaction level of the consumers. Compared to the traditional markets, currently the increase in competition and market trends increased the significance of the consumers and organizations are taking prolific strides to emphasize on retaining their consumers to save the organization from raising more competition in the market. For achieving the significant aspect of reducing the competition level, customer retention is the ultimate requirement for the organizations. According to Ramakrishnan, customer retention is an effective marketing objective of preventing the customers from purchasing from the competitors in the market. Organizations prolifically emphasize on making the existing customers their center point for putting necessary efforts to retain them and focus on the relationship via customer retention. The customers those who continue having an effective relationship with a specific organization, marketer or a provider for certain duration of time it is also termed as customer retention. According to Fluss, the success of a business in the present competitive market significantly depends on customer retention. He observed that the competitors in the market are always seeking for various ways to capture the customers by providing them the most effective deals for increasing the relationship (Ryals and Knox, 2001).

Customer retention is referred to the significant process of having long and close relationship with the customers. Distinctive studies have eventually reported that is one of the most expensive procedures for an organization to attract the customers compared to the strategy of retaining the existing customers, Schefter and Reichheld evaluated that maintaining relationship is more economical with the existing customers of an organization as they are fewer price receptive compared to the potential customers. They also observed that maintaining relationship with the existing customers is even less price receptive. They further added that the customer retention approach is influential and it therefore impacts the extended beliefs and values which is considered to be an advantageous opportunity for organizations that seeks for extended business activities and enhance to protect their goodwill in the market. Lombard stated in support of the aforementioned argument that organizations are mainly influenced by the market to retain the customers especially wherever the customer possession is low. In scenarios when the sales are declining and customer loyalty is at stake, customer retention approach becomes the significant aspect for that business organization and environment. It must be critically assessed that considering the aforementioned scenario, if by any means the customers shift to other competitor then both growth and profitability of the organization is noticeably affected. According to a research conducted by Peter Drucker it was considerably noticed that about one percent increase in the retaining the customers impacts the organization almost five times which is considered to be one percent change on the firm value or the capital cost. This significant research eventually highlights about the need for the organizations to focus on implementing customer retention for becoming more established and gain market share. Due to the increase in recognition within the customers in regards to the product and its life cycle it is the effective role of the organizations to attempt in managing the knowledge about the customers and what can be acquired for understanding the preferences and desires of the customers. The significant understanding can eventually help in retaining the customers which have significantly grown in value over time. It has been proposed by Freeland that the customers tend to climb the value staircase from suspect and prospect (Peppard, 2000).

Assessing these prolific changes significant emphasis has been on the defensive marketing aspect that critically focuses on to holding the existing customers for achieving more customary share from them. One of the most significant reasons for the prolific rise in customer retention among the organizations is the needful recognition of the customers as holding on to a existing customer is more beneficial than performing a single sale. Losing a customer or ruining the relationship with an existing customer can be termed as losing the whole purchase stream that the specific customer could make for a curtained period of time. Weinstein critically explained that most of the organizations spend most of their time in chasing new resources and energy for new business process. It has been prolifically researched by Weinstein that about 80% of the marketing budgets are mainly earmarked due to achieving new business. But Weinstein proposed that spending more time on significant techniques of customer retention can be more affective to build a relationship that would enable an organization to generate revenue and growth. He further proposes that the importance of retaining customers is not a new scenario to marketing therefore he believed that marketing is significantly related to the retaining aspect as well as acquirement of the customers (Morgan et al. 2000). Though, the increase in competition in international markets has saturated the opportunities and therefore the awareness of retention advantages have prolifically grown. Contrasting to the proposal of Weinstein, Dawes and Swailes argued that successful retention of customers thwarts the expenses of looking for potential and new risky customers. This enables the organizations more in focusing in the accurate needs of the existing customers by emphasizing more on relationships with the existing customers. Many researchers have also figured out the customer retention technique has an important impact on customer satisfaction as well as profitability. Both these aspects lead the organization to quality financial performance. In his research Reynolds suggested that once an organization acquires an entire customer group, the organization can significantly retain that group of customers by making all the customers feel special via the implementation of the customer recognition technique. In the article “Learning from Customers Defection’ Reichheld observed that as long as a customer has a quality relationship with an organization, they are considered to be more worth because the long term relationship enables the customers to purchase more, take less time of the organization and are not so sensitive in regards to the price like the new customers. The existing customers also provide the organization with significant advantage of bring more new customers (Mithas et al. 2005).

Smith and Ongena has specifically observed that when organizations specifically focuses more on individual customers by establishing a significant relationship and heartening satisfaction as well as loyalty, those organizations tend to have more chances in increasing as well as the retaining of the customer base. It has been further explained that increase in single brand loyalty decreases the sensitivity in price by inducing more customer resistance and attract more customers. This not only enables the increase in purchases but it also provides the prolific ability to customize the communication which helps in promoting the trust and attempting to acquire larger share of the market. In terms of customer retention customer relationship leads to loyal customers who purchases more by paying high prices of the products and services and by the help of word of mouth support bring in new customers that boost the organizational growth. Assessing all the positive aspects, Reinartz argued about the customer retention process comparing the revenue, profitability and behavior of about 10,000 individuals and corporate customers and stated that there is hardly any evidence found to provide significant suggestion about the customers who continues to purchase on a regular basis are inevitably less price sensitive or efficient enough to bring in a new business. It was also found that the loyal customers were only slightly profitable whereas a huge percentage of customers mainly short term were profitable enough (Hennig‐Thurau and Klee, 1997).

In contrast to the research conducted by Reinartz, Woolf argued that superior amount of success can be achieved from a prolific strategy that is based mainly on the understandability of the customer economics and on the loyalty of the customers and building the relationships. Despite facing huge criticisms it has been assessed that customer relationship and loyalty is one of the most efficient contributor for enhancing organization’s shareholder value. Novo from a distinctive perspective evaluated customer retention and he explained that retaining of existing customers must be done but not by diminishing the important activities related to marketing. He further explained that customers can be categorized for clarifying the acts and analysis of the basis of marketing activities that are designed for improving the techniques of customer retention. Knox in his article claimed that customer retention can be ascertained by calculation of the customer lifetime value. It can help in forecasting the products the consumers purchase in the upcoming years and how the administration and sales cost will count. The major aim of his statement critically analyzes the about the valuation of profitability an organization can make from a customer that would help in building a healthy relationship with the organization (Zablah et al. 2004).

Parashuram in his research concluded about the gaps or discrepancies in between the perception if the executives of the service quality they provide and the associated tasks with delivering all those services to the customers. It was evidently observed that the perception service quality mainly depends on the direction and the gap size in between the customer expectancy to receive and what the customer actually perceives to have been received. Parashuram noted that the gaps or discrepancies can be a major drawback for attempting in delivering a quality service which the consumers would recognize as being of elevated quality. As the study significantly focused on the interaction in between the customers and the organization’s representative it highlighted that the relationship plays a key role in gaining the trust of the costumers which eventually helps the organization to hold on to the customer for a longer period of time. Zeithaml studied about the perceptions of the customers in regards to the quality and how it influenced them. The major perspective was to experience any recent issues with a service. Examination of the customers led to provide needful outcomes i.e. service issues negatively affects the perception of the customers. The most important thing that an organization can do is to keep tabs on reliability by which the customers can be made satisfied in terms of any product or service. Whenever any issue with the product or service comes up it is the role of the organization to step up and resolve the issue for the satisfaction of the customers. Performing in such critical scenarios helps the organization in improving the rate of customer retention which is quite important for the growth and profitability of the organization. Zeithaml further claimed that for achieving the ultimate level of customer satisfaction and achieve the clarity role organizations must empathize on feedback communication, competence and confidence. These specific four factors can be quite advantageous for the organization to enhance the rate of retaining employees which is quite effective for its sustainability (Hallowell, 1996).

The management and the employees of the organization must have in-depth knowledge about their specific roles and responsibilities along what they are expected to do. He also explained that organizations must also need to enhance the level of interpersonal skills and technical knowledge for being responsive, which would enable to enhance to implement the customer retention techniques. Clarity in role, confidence and competence within an organization can be considered as beneficial for understanding the customers’ perceptions, preferences and desires which are the key aspects that drives the satisfaction level within the customers. It must be critically assessed that more the rate of satisfaction within the employees more will be the possibility of customer retention. Hoech and Bitran suggested that the organization that seeks to retain its existing customers must also opt for the customer relationship management that would enable to diagnose the issues, checking and gathering the information and managing the waits. The customer relationship management is necessary for customer retention and the prolific skills of the customer retention representatives would be the key aspect in building strong bonds and relationship with the customers by critically analyzing their behavioral traits (Bose, 2002).

Research Gap

It has been lately observed that international organizations have got significantly involved in customer relationship management for retaining their customers. Over the past few years with the prolific change in performing business the organizations have significantly understood about the importance of customer retention that yields in distinctive economic advantages. Assessing the case of Starbucks the customer relationship management have essentially become a key part of the marketing strategy. The customer relationship management is basically performed by Starbucks by the significant use of customer loyalty programs. These sorts of programs mainly exist due to the prolific increase of profitability by focusing on the customers and the personal relationships. Presently, Starbucks uses various loyalty programs to create a sense of urgency within the customers that enables to reach the ultimate satisfaction for increasing the profits (Jayachandran et al. 2005).

According to various sources, the customer relationship management of Starbucks is basically defined under three major objectives, Firstly acquisition of the customers highlights about the attraction of the right customers towards any specific product or business that are mainly based on the learned or known features. Assessing the case of Starbucks, in the year 2016 the organization has been able to increase 28% i.e. 10.4 million users by the implementation of the loyalty programs like “My Starbucks Rewards.” This significant figure provides a key analysis and in-depth knowledge about the strategies the organization implements for achieving the significant objective of customer relationship management. The loyalty programs of Starbucks are considered to be the key drivers of this organization not only to acquire the short term increases in profitability but it also helps in gaining revenue for long term basis. The entire concept of the short term and long term objective of Starbucks significantly evaluates the importance of customer relationship management that had provided about 18% increase in generating revenues. Apart from the loyalty programs the organization also emphasizes in the network effect that has enabled to create an intimacy sense by the use of online payments which influences the suitability for the customers. The significant implementation of the network effect has eventually witnessed Starbucks getting more customers that is boosting the sales and revenue generation of the organization. Starbucks despite having a wide range of customer relationship management initiatives have always emphasized in their specific loyalty programs for achieving the success. The organization has been quite prolific in assessing the customer database through extensive research providing extra advantages to the customers (Heller Baird and Parasnis, 2011).

Evaluating and analyzing all the aforementioned factors that Starbucks have implemented for a healthy customer relationship, the organization has suffered in the significant area of customer retention techniques. The customer relationship management have always been a major priority for organizations like Starbucks but one major thing that has been lacking is the customer retention procedure. Though customer relationship management impacts the customer retention techniques of an organization Starbucks have always emphasized on digital marketing and emphasized on customer relationship management for loyalty purposes. The organization has never taken any such initiatives for retention of customers. The basic reason constituting the fact is that Starbucks is a multinational organization which mainly targets customers of age group in between 18 to 40 years and it has been already explained by researchers that Starbucks customers comes mainly from the upper segment of the society who are wealthy and educated and therefore agrees to pay premium prices for their product and service. As the organization runs on the product oriented strategy and lately started emphasizing on the customer oriented strategy the organization does not have any significant approach to customer retention because the organization is quite aware about their quality of products that attracts new customers every day. Thus, the organization does not emphasize on customer retention rather than that they put much emphasis on loyalty programs via the customer relationship management and attract new customers by the significant help of product oriented strategy (Storbacka and Lehtinen, 2001).

The lack of customer retention in Starbucks is the major aspect that will be discussed in this significant research assessing the implications and the impact of customer retention along with the customer relationship management. The absence of customer retention is the prolific research gap which will be highlighted in this specific research. Considering the case of Starbucks, and the marketing relationship importance is mainly highlighted by performing a significant survey followed by a data collection and analysis techniques. The missing element on the existing literature in the case of Starbucks would be significantly highlighted by the following research approach. The significant hypothesis of customer relationship management and its impact on customer retention will be the key focus of this specific research (Dyche, 2002).

Research Methodology

The research methodology is considered as an important chapter that prolifically provides and evaluates the processes that are used in completion of a research study. It is quite important to understand and analyze that before performing a research it is essential to evaluate the way the research has been conducted which actually helps in making the research study more elaborated and easier to read. Research methodology is one of the most significant part of a research study as it significantly helps in explaining the prolific methods used in the research for conducting it. A research methodology also highlights the way a research report has been presented. A research methodology throws light and explain every key detail of the methods like data collection process, research type, research philosophy etc that enables to make readers understand the type of analysis that has been conducted in the study for providing a concrete and solid evidence about the research work that is explained in the report (Keiningham et al. 2007).

A research methodology significantly acts as sustaining evidence to the topic on which the research has been conducted. It also demonstrates the process used in the specific research which enables the other researchers to have an in-depth idea about the analysis and evaluation carried out. This also helps the researchers to carry out further studies provided on the research topic. A research methodology can be presented by the use of wide range of analysis, distinctive methods, and various structures. The major reason behind using distinctive methods, analysis and various structures helps in demonstrating the distinctive procedures that has been effectively used for justifying the research and using distinctive methods within the research. All these critical aspects are considered while developing a research methodology as it helps various researchers to defy their specific work and provide critical evidences based in the authentication of the data and variables that has been used for studying and conducting the research (Lemon et al. 2002).

Research Design

The research design is considered as one of the most significant blue print of a research. A research design helps the research report to present the methods and prolific structures that has been used to express the hypotheses on the provided research topic. Distinctive methods are used for representing the research report, like the exploratory research method and the descriptive research method. Both these methods can be used for a research study to find various outcomes. Exploratory research method can be specifically referred to the gathering of some basic data on the provided topic that is not much beneficial in conducting a research study evaluating the present situation of the market. The exploratory research method is specifically used for gathering significant information of a research study by evaluating the researches done by previous researchers. This sort of method does not help researchers of the specific research study to collect the necessary data and information on a significant research topic that is conducted on a technique or strategy based on a specific industry or organization. Analyzing the exploratory research method, it mainly helps in collecting essential information and data on the provided topic which makes it quite problematic for the researcher to evaluate the specific outcomes and results of the hypothesis (Campbell, 2003).

In this scenario the most suitable research method has been used for a topic that is provided to study about a significant management technique and evaluate the market trends, customer needs, and preferences which enables the organization to understand the significance the specific technique. Assessing the need of analysis and evaluation the descriptive method of research has been used as it is considered to be very helpful for collecting huge amounts of data to conduct the research study as well as support the study with concrete and solid evidence for proving the authentication of the findings, results and outcomes of the research. As this specific research has been conducted considering the multinational beverage organization Starbucks which needs to ascertain the customer behavior, retention techniques and customer relationship management the descriptive method of research is the most suitable method for conducting this report. The descriptive research method is one of the most used methods that presents the research blue print in an effective manner, It significantly helps in providing the perfect solution about the hypotheses of the specific research study. The use of descriptive research methodology enables to provide a significant relationship in between the variables that connects the customer relationship management and customer retention it would also help in focusing and understanding the research paper. The use of descriptive research method helps in discussing the results, findings and outcomes in a descriptive way which enables the understanding of the research paper much easier for various readers. Thus, the descriptive research method has been used as it is justified to be the most effective for the chosen topic. The descriptive research method is a suitable enough and helpful technique for representing the research study on the topic of customer relationship management and its impact on customer retention (Zikmund et al. 2003).

Research Questions

Considering the aforementioned research design i.e. descriptive research method it can be prolifically evaluated that this method is the best suited method for analyzing the research topic of customer relationship management and its impact on customer retention. As the given topic deals with the relationship aspect in between the customers and the organization the research questions are outlined based on the importance of the topic that would provide necessary outcomes and findings (Reichheld, 1993).

The research questions that are evaluated in this specific research are as follows:

  • What is the role of the customer relationship management in the performance of customer retention?
  • What are the key factors that contribute to the larger extent in enhancing the customer satisfaction level within the customers?
  • How customer relationship management is related to customer retention?
  • How an effective customer relationship management in an organization can help in retaining its existing customers and attract the new and potential customers?
  • How an organization can be benefitted by the customer relationship management?
  • Does customer retention is needed for sustainability and profitability of the organization?

Data Collection

In a research study the data collection is considered to be the most important as it helps in enhancing the researcher database for conducting the research. It is impossible to conduct a research with enough data being collected. The collected data are the significant aspects that helps in providing outcomes and results from the study. As already explained, the descriptive method of research has been used for conducting this specific research and two distinctive methods have been used for collection of data and information. The collection of primary data has been done by the help of primary data collection technique which helps in conducting the primary research. Via the help of this technique, the primary data has been collected unswervingly by the help of preparing questionnaires for the customers whose feedback is quite essential for finding the outcomes and results. The questionnaires were prepared for collecting significant feedbacks and the views if the people about the provided statements. This has helped in understanding about the customer preferences, choices and demands that impacts the relationship and loyalty towards Starbucks (Rust and Zahorik, 1993).

Secondly, the secondary data has been collected by the help of secondary sources which has helped in increasing the researcher database for conducting the hypotheses according to the need of the research study. Through the help of secondary sources, the needful data and information has been collected i.e. from books, journals, articles and internet sources. For attaining all the necessary data and information the primary data collection method and the secondary data collection method has been used . The data and information that has been collected is mainly required for performing the hypotheses. By the help of primary sources the information and data has been collected i.e. by providing a list of questionnaires to the customers of Starbucks. In this specific research, the feedbacks attained from the customers have been significantly observed for converting the data and information into the needful variable that would help in proceeding further with the necessary hypotheses. The list of questions that has been prepared are used for collecting the data needed for further references. Apart from the primary data that has been collected journals, articles and internet sources has also been used as the secondary sources for supporting the hypotheses of the and comparing the findings and results of the other researchers who have previously researched on the significant topic. After analyzing and evaluating the previous literatures that were done by the previous researchers, the needful database has been prepared for conducting the entire study of customer relationship management and its impact on customer retention in Starbucks. Thus from here it can be significantly ascertained that use of both primary data collection and secondary data collection is justified for fulfilling the requirement of the research paper on the given topic. For collection of data about 50 customers were selected within the age group of 18 to 40 years and the questionnaires were provided to them by mailing them on their respective emails. The questionnaires specially highlighted about the key factors in regards to loyalty, customer relationship and customer satisfaction in regards to Starbucks. The data analysis has been performed by the help of SPSS software and the findings are elaborated in statistical analysis segment (Bull, 2003).

Sampling

For conducting a research it is essential to involve a lot of participants and out of which only few participants are considered because it is always not possible for studying the immense amount of information and data gathered from mass participants for completion of a hypotheses. One of the basic reasons constituting this fact is that there tends to be significant boundaries and limitations of the research study. By the significant help of the sampling technique few participants are chosen and are considered for studying the topic on which the research study is being conducted. According to Bourdiue, for studying any significant research topic that is based on a specific industry, it is important to consider studying the specific industrial fields and then analyze with the information and data collected from the chosen participants that are basically distinguished from the entire population via the help of sampling techniques (Schwetz, 2000).

For performing this specific research about 50 participants are considered and the feedbacks were collected via the questionnaires that were prepared for this research study. The questionnaires that were framed, presented the statements that are directly related to the provided topic assessing the key factors of the impact customer relationship management has on customer retention in Starbucks. Despite collecting feedbacks from the primary sources, a distinctive evaluation had been performed that significantly helped in providing the necessary outcomes and journals of the research study. Along with the primary research technique, many other secondary sources like the journals and the articles were also considered for getting adequate data and information that are needed for the provided topic. The selection of data and information from journals, articles and internet sources has been done for observing and conducting the research study. The use of secondary research method has been used in a significant way for analyzing the critical review that needs to be considered for understanding the customer relationship management and the factors that drives customer retention in an organization. The distinctive philosophies that were presented by previous literatures by the researchers provides the significant trends and beliefs of the people who had studied about the key factors before. The purposive sampling technique has been significantly used for choosing the participants that are needed for conducting the research study. The purposive sampling technique is the opposite of the random sampling technique. In purposive sampling technique the participants are chosen according to the specific needs of the research questions for fulfilling the research requirement. Thus, it can be said that the use of the purposive sampling technique is acceptable in this research study (Richards and Jones, 2008).

Research Model

For analyzing the significance of the research study, along with the research methodology and research design the research model is also of great importance. Assessing the research model for the specific research study on the given topic of impact of customer relationship management on customer retention the academic research model can be quite effective in demonstrating the research phenomenon and correlate the variables to one another. IT must be prolifically assessed that academic research model is developed by analyzing the critical assessment of the literature review conducted on the given topic (Lewis, 2004).

Image result for what is research model

Evaluating the aforementioned academic model it can be observed that each step is interrelated to the other which provides a critical overview about the significant components of the research study. The evaluation of all the components in the academic research model significantly highlights the integration of the hypotheses that is achieved by conducting the research with the participants (Gerpott et al. 2001). The essential components of the aforementioned model are critically evaluated below.

  • Investigation Area: The investigation area for the specific research study is based on the research questions. But, the major focus is given on the impact of customer relationship management on customer retention. The entire investigation is based on how sales of products and services impact the customer satisfaction level. For this Starbucks has been chosen as the main organization (White and Yanamandram, 2007).
  • Previous Research Review: The previous research on the topic of customer relationship management and its impact on customer retention has been performed by previous researchers by providing critical overview from outlining the literature review. Thus, the previous research review is the literature review (Oyeniyi and Joachim, 2008).
  • Testing Hypotheses: The testing hypothesis is not considered in this research study. Thus it is not applicable in this case (Singh, 2006).
  • Conduct Study: The research study has been conducted by the means of a survey. A list of questionnaires has been prepared to attain the necessary feedback from the customers in regards to customer satisfaction and customer retention (Edward and Sahadev, 2011).
  • Analysis of Results: The outcomes, results and findings of the research study is performed by the descriptive techniques. The use of descriptive techniques has been used to evaluate the information and feedback received from the customers to provide effective results of the research study (Coyles and Gokey, 2005).
  • Thesis: Lastly, the thesis has been performed by writing a detailed report that specifically evaluated the findings of the customer relationship management and customer retention after significantly evaluating and analyzing the findings from the conducted study. The report specifically provides in-depth knowledge about the feedbacks gained from the customers for providing a conceptual conclusion about the given topic (Seo et al. 2008).

Research Limitations

The conducted research study on the impact of customer relationship on customer retention, a case of Starbucks is of great importance for both the organization as well as the customers. Despite having being quite significant there are various elements that restricts the research. The major limitation in conducting this specific research study is the lack of time that acts as a main boundary for the research. It is quite important for considering the time boundary for the completion of research appropriately and makes significant utilization of the research study. Though the time boundary is considered to be the main research limitation there are various other limitations like the limited research scope for understanding the impact of customer relationship management on customer retention. Thus it can be specifically ascertained that it is really important for taking the limitations into consideration for overcoming the distinctive issues and complete the research study. The lack of time is also provided in the Gantt chart (Nitzan and Libai, 2011).

Ethical Considerations

There were some significant principles that was considered while research was conducted. It must be assessed that every research is significantly regulated by distinctive regulations and rules that prolifically governs the research that is being conducted. It is critically important while conducting a research to follow the rules and guidelines for avoiding unwanted scenarios during the hypothesis procedure (Xu et al. 2002). Thus it is critically important to provide adequate justification and proper evidence about the findings and results that supports the research study. Some of the key elements of the ethical considerations are as follows:

  • It is important for the research study to conduct the survey with the existing and new customers of Starbucks.
  • The identity of the customers will not be disclosed and personal information of the customers will be taken only for the survey purpose.
  • The findings and outcomes will be presented without forging or any alterations.
  • While conducting the research study consistency will be monitored
  • Any sorts of discriminating acts against the customers will be prohibited
  • The data and information collected by the customers will be kept confidential and will never be disclosed to anyone.

Questionnaires

For conducting the research study about 50 participants will be taken into consideration and a list of questionnaires will be provided to them for acquiring the essential feedback for analyzing the outcomes and findings. The lists of questions are specifically related to the provided topic and it would be provided in a way that would be quite easy for the customers to answer.

  • Is it important for Starbucks to emphasize on customer retention techniques?
  • Does Starbucks service and product quality positively impacts the ultimate satisfaction level and loyalty of the customers?
  • Will emphasizing on customer relationship management will help Starbucks in impacting the customer retention?
  • Are the loyalty programs of Starbucks good enough to satisfy the needs of the customers?
  • How much would you rate the service quality of Starbucks out of 10?

Data Analysis

The data analysis is also one of the most important and is considered as a challenging work in a research study. This significant part of the research study takes the most time in completing the research. It is quite significant enough because without the necessary analysis, the outcomes and results of the study cannot be presented. Initially the raw information and data has been converted to derive the significant variables via the proper techniques of sampling and the information and data has been analyzed with the prolific help of distinctive methods for producing the results and outcomes. Two significant ways has been chosen for analysis of the data in this specific research study. Firstly, the findings and results have been represented by evaluation of previous literatures proposed by the researchers and secondly the questionnaires feedbacks has been observed and evaluated (Borle et al. 2005).

The data analysis of the research has been performed by using the qualitative and quantitative research for getting the effective results. The use of quantitative analysis has helped to analyze and evaluate the significant relationship in between the distinctive variables via using statistical analysis like correlation and regression. The qualitative analysis has helped in comparing the acquired data with prolific research for understanding the differences and provides a solid solution to the research study. Thus it can be portrayed that use of both qualitative and quantitative research method is justified for completion of the research paper. The use of SPSS tool has provided significant evaluation for deciding the key factors that has been considered in regards to customer relationship management and customer retention (Ang and Buttle, 2006).

The inspection of the data has been used for discovering the correct information. In regards to the specific research study data analysis has been conducted for understanding the huge amount of data that has been collected. The feedbacks from the customers has been taken into consideration and it has been also categorized into small divisions as per the customer age. All the customers have been categorized into five age groups and the feedbacks were collected from ten customers from each age group.

AGE GROUP SAMPLE SIZE
18-24 10
25-31 10
32-38 10
39-45 10
45-50 10

According to questions provided in the questionnaires the specific research study has been critically analyzed determining every single question’s viewpoint. All the feedbacks of every single customer have been noted for understanding the needs and acquiring needful feedback.

Question 1: Is it important for Starbucks to emphasize on customer retention techniques?

AGE GROUP Agree Neutral Disagree
18-24 10 0 0
25-31 9 1 0
32-38 7 3 0
39-45 6 4 0
45-50 5 4 1

Question 2: Does Starbucks service and product quality positively impacts the ultimate satisfaction level and loyalty of the customers?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 8 1 1
25-31 10 0 0
32-38 7 2 1
39-45 6 4 0
45-50 4 5 1

Question 3: Will emphasizing on customer relationship management will help Starbucks in impacting the customer retention?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 10 0 0
25-31 10 0 0
32-38 9 1 0
39-45 8 2 0
45-50 6 3 1

Question 4: Are the loyalty programs of Starbucks good enough to satisfy the needs of the customers?

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AGE GROUP AGREE NEUTRAL DISAGREE
18-24 7 1 2
25-31 8 1 1
32-38 5 3 2
39-45 8 1 1
45-50 6 1 3

Question 5: Would you rate the service quality of Starbucks 10 on 10?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 8 1 1
25-31 7 0 3
32-38 6 2 2
39-45 7 1 1
45-50 6 2 2

Interpretation and Findings

The research study on Starbucks was mainly conducted by taking the necessary feedbacks of the customers hailing from distinctive age groups and backgrounds. The prolific findings of the research were taken into consideration by grouping all the members of distinctive age groups.

  • Age Group 1: 18 to 24
  • Age Group 2: 25 to 31
  • Age Group 3: 32 to 38
  • Age Group 4: 39 to 45
  • Age Group 5: 45 to 50

The data and information collected by the help of questionnaire survey provided interesting perceptions about the Starbucks customers. Evaluating the feedbacks into percentage ratio about 70 percent of the customers significantly agreed that Starbucks must emphasize on customer retention techniques. About 20 percent customers provide their opinion in neutral. This elaborates that the responses from the customers were neither for nor against the question. Only 4 percent of the customers who took part in the survey disagreed to the question that was asked. The table shows a significant analysis about the prolific views from the customers. The distinctions in opinions can be identified and explained considering the age. It can be observed that their views are mainly based on the experiences that had with Starbucks (Larivière and Van den Poel, 2005).

Assessing the second question on ultimate satisfaction level most of the customers agreed to the question saying the product and service quality of Starbucks are premium. About 25 percent of the customers stated their neutral response and only 5 percent of the customers who took part in the survey disagreed to the fact that Starbucks product and service quality can be considered premium. According to the customers who disagreed to the question, stated that the service and product quality of Starbucks do not positively impacts the ultimate satisfaction level of the customers. This age group participant didn’t want to be loyal towards the organization and claimed they would opt for a substitute organization that would provide better product and service quality (Keiningham et al. 2007).

Evaluating the third question that claimed on emphasis on customer relationship management, most of the customers agree to the concept of customer relationship management would help Starbucks in impacting the customer retention. There were hardly any customers that disagreed to this question which critically explains that they would love to come back to Starbucks if the organization emphasizes the on focusing more on customer satisfaction and building relationships with the customers (Kivetz et al. 2006).

The fourth question observed a mix bag of responses as few of the customer felt that the loyalty programs are the best in Starbucks and it satisfies the need and preferences of the customers. Whereas half of the customers provided a negative feedback stating, Starbucks must try to emphasize more on distinctive loyalty programs that would enable them to get something new and would lead them to come back at Starbucks over and over again. The mix bag of responses provided a key evaluation about the wants and needs of the customers that would help in building an effective relationship for the betterment of the organization (Gounaris, 2005).

The last question also can be considered as a mix bag responses received from the participants of the survey. Most of the participants who are the regular customers of Starbucks claimed that they would provide positive reviews for the service quality of Starbucks and most of the customers claimed that Starbucks service quality is not up to the mark. They further explained that Starbucks need to emphasize more on customer preferences for keeping their existing customers. I critically explained that few customers presently don’t find the service quality of Starbucks up to the mark (Gustafsson et al. 2005).

Critically evaluating all the questions it can be clearly stated a mixed bag of feedbacks were received from the participants of the survey. The ratio of agreeing and disagreeing to the questions can be significantly analyzed and it can be therefore evaluated that most of the people wants Starbucks to take significant efforts in the service quality and product quality. According to the customers who took part in the survey claimed that Starbucks must take prolific strides in customer retention by implementing more loyalty programs via customer relationship management to satisfy as well as expect loyalty from the customers (King and Burgess, 2008).

Gantt chart

For evaluation and analyzing the topic with significant process of research, groundwork, research methodology and analyzing the data, the research has been undertaken. The Gantt chart provides a significant overview about the time taken for collection of all primary and secondary data for completing the research effectively.

Gantt Chart
  No. of Weeks
Main Activities/ Stages 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Selection of the topic                            
Evaluation of secondary information sources
Research proposal preparation
Groundwork of literature review
Explanation of research methodology
Collection of the primary data
Collection of Secondary data
Analyzing data
Contrasting findings
Recommendations and Conclusions
Final submission

Contribution of Research

The specific research study provided all the probabilities, merits as well as the limitations of the specific topic. This significant research study can be quite helpful in ensuring further research study. Most importantly the significant discussion and analyzing the existing literature of consumer relationship management and customer retention can be quite beneficial in assessing mechanism and dynamics of customer satisfaction and loyalty towards the organization via customer relationship management. It provides key analysis about how customer relationship management can be effective enough to impact the procedure of customer retention and how a specific organization can achieve sustainability and profitability by these significant methods implementation. The literature review that has been discussed on the given topic certainly provided the basics that need to be focused in for knowing the role of CRM and customer retention. It also contributes in providing adequate knowledge about the significant procedures that needs to be effectively followed for having a significant market share by the help of retaining the existing customers and attracting the potential customers (Srinivasan and Moorman, 2005).

Discussion and Conclusion

The research provides two significant conclusions i.e. customer retention excellence is strong associated with the process of handling the customer complaints in respect to the satisfaction level and desires of the customers. Secondly, it has been found that customer relationship management do impact customer retention but budgeting and assigning accountability is not at all associated with the exceptional customer retention performance. Evaluating the questionnaires it can be stated that to acquire customer retention importance it is always important to have a documented process of handling customer complaints. This can enable the Starbucks to have a in-depth idea about preferences of the customers and the organization can take significant strides to bring in a change to meet the ultimate satisfaction level of the customers. The customer complaints would significantly be beneficial for an organization like Starbucks for giving a chance to overcome the issues that the customers are facing in terms of service quality, products or price. This can be quite helpful for Starbucks in retaining the customers that would boost the future business of the organization. Secondly, the process of complaints need to be well designed that would allow Starbucks and the management to analyze and collect the significant data related to the complaints over time and identify the repetitive and systemic issues and fix them whether they are caused by any significant process, product, people or something else. Though Starbucks does not have a customer retention process and solely depends on the customer relationship management by the help of loyalty programs this aforementioned procedure can be beneficial for the organization (Payne and Frow, 2004).

After performing the research it can be specifically concluded that there are certain factors that needs to be taken into consideration for bringing out the significance and impact of customer relationship management on customer retention. The paper has prolifically revealed assessing the case of Starbucks about the key role of customer relationship management and the impact it has on customer retention in Starbucks. Evaluating all the critical factors and keeping into perspective it can be easily observed that there are various positive aspects in the mechanism of customer relationship management and customer retention. Mainly with customer relationship management it is highly important to pick out the motives of customer relationship management in an organization like Starbucks. Similarly it is also recommended for selecting a significant procedure to customer retention that would be quite impressive for both the organization and the customers. The product and pricing also plays a major role in case of customer relationship management and customer retention. It is essential for Starbucks to prolifically follow distinctive strategies and tactics in regards to customer retention for making a positive and long lasting impression on the customers. Along with this, the management of the organization must take significant strides for making the customers feel special that would enhance the level of loyalty and build a firm relationship for the betterment of the organization (Nambisan and Baron, 2007).

For being successful in implementation of the customer retention techniques through the prolific influence of customer relationship management the mechanisms of tactics and selection of significant procedures are suggested in the research paper by the help of in-depth analysis and research. Theoretically in various instances all the significant strategies do not work out and match the findings for successful implementation of the customer relationship management and customer retention. First of all it is important for Starbucks to ascertain the environment and analyze the prolific implication related to customer retention. Though are some specific risks associated with the customer relationship management, it is essential to examine the market before going forward and deciding about the possibilities of the customer retention strategy. Most importantly, as already been mentioned above prolific strategies and effective decision making has to be on the professional level for achieving success in retaining customers. It is essential to understand the key drivers of customer satisfaction and loyalty before proceeding with the strategic implementation of customer retention. Though customer relationship management is interrelated to customer retention it is important for Starbucks to make sure about the circumstantial decision making that would ensure in achieving the potential objective of retaining its existing customers and attract the new and potential customers. Assessing the research it can be critically explained that patience is the key to success for Starbucks in emphasizing on customer retention, Positive attitude high quality strategies and tactics and emphasizing on the commitment level can help in achieving success (Stone et al. 1996).

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Appendix

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Figure: The Academic Research Model

AGE GROUP SAMPLE SIZE
18-24 10
25-31 10
32-38 10
39-45 10
45-50 10

Figure: Categories of Five Age Groups

Question 1: Is it important for Starbucks to emphasize on customer retention techniques?

AGE GROUP Agree Neutral Disagree
18-24 10 0 0
25-31 9 1 0
32-38 7 3 0
39-45 6 4 0
45-50 5 4 1

Question 2: Does Starbucks service and product quality positively impacts the ultimate satisfaction level and loyalty of the customers?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 8 1 1
25-31 10 0 0
32-38 7 2 1
39-45 6 4 0
45-50 4 5 1

Question 3: Will emphasizing on customer relationship management will help Starbucks in impacting the customer retention?

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AGE GROUP AGREE NEUTRAL DISAGREE
18-24 10 0 0
25-31 10 0 0
32-38 9 1 0
39-45 8 2 0
45-50 6 3 1

Question 4: Are the loyalty programs of Starbucks good enough to satisfy the needs of the customers?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 7 1 2
25-31 8 1 1
32-38 5 3 2
39-45 8 1 1
45-50 6 1 3

Question 5: Would you rate the service quality of Starbucks 10 on 10?

AGE GROUP AGREE NEUTRAL DISAGREE
18-24 8 1 1
25-31 7 0 3
32-38 6 2 2
39-45 7 1 1
45-50 6 2 2
Gantt Chart
  No. of Weeks
Main Activities/ Stages 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Selection of the topic                            
Evaluation of secondary information sources
Research proposal preparation
Groundwork of literature review
Explanation of research methodology
Collection of the primary data
Collection of Secondary data
Analyzing data
Contrasting findings
Recommendations and Conclusions
Final submission