Undercover Economist

Last updated: May 19, 2012 12:12 am

A questionable move by Starbucks

Big organisations should test out their new policies whenever they can
illustration of a mug©Raymond Biesinger

An awkward moment recently: I ordered an espresso from Starbucks and the barista, a young fellow with fashionably chaotic blond hair, asked my name. I’d heard that this is the new policy at Starbucks but, not being a regular, I’d forgotten. None of your business, I thought, and fumbling for something to say instead of my name, I said, “I suppose you’re getting annoyed having to ask people their names.”

The young man’s face darkened perceptibly. “A lot of things annoy me,” he said, “but if you don’t want to tell me your name, that’s fine.” His colleague proceeded to pull me a deeply uninspiring espresso, which I felt that I rather deserved.

I took the coffee and sat awkwardly in the corner, avoiding eye contact with the staff and vowing to steer clear of Starbucks in future. One bad espresso just isn’t worth the social discomfort.

If my Starbucks experience is typical, the policy of requesting names is going to prove very ill-judged. But perhaps my Starbucks experience isn’t typical; I’m not a regular customer, after all. Perhaps the regulars love it. Who can say? But it’s worth asking: where does this kind of idea come from in a large organisation? How is it tested? Under what circumstances might it be reversed?

The question of the U-turn is a particularly vexed one. Politicians find it especially painful, perhaps because lazy journalists find U-turns easy to criticise: either the old policy was wrong or the new one is wrong, and either way, the politician can be blamed with no need for further investigation. Just think of the plight of Theresa May, the Home Secretary: she demanded tight border controls, but lacked the personnel to carry out the new regime efficiently. She has painted herself quite methodically into a policy corner.

Any high-profile policy runs a similar risk: if it doesn’t work, it is hard to perform an elegant about-face. This is why I think Starbucks should have conducted a randomised trial to test the question: pick 100 branches, then randomly select half of them to receive instructions and training videos, and see whether there was any effect on staff morale, customer satisfaction or sales.

It wouldn’t have been a perfect double-blind trial, but it would have been revealing. I can confidently assert that if we were talking about Amazon, it would be inconceivable that the company would change how it interacted with a customer without testing the idea with such a trial.

As it happens, Starbucks wasn’t quite as clueless about this as I might have guessed. (I suppose I shouldn’t be surprised that these people know something about selling coffee.) I am told the idea emerged after listening to customers in focus groups, who pointed out that they liked the fact that in their local branch, the staff knew who they were. (I think the Starbucks press officer telling me about the focus groups was about to say that the customers didn’t mention the coffee as a reason to go to Starbucks, but thought better of it. Perhaps I imagined that.)

Next came informal testing: staff at some Starbucks branches – for instance, in Cambridge and in the new Westfield shopping centre in east London – had already been doing this for a few months. An internal “training” video shows these staff enthusing about the idea and entertains no possibility of awkwardness.

Perhaps my cynicism is misplaced. Starbucks is trying to keep regular customers happy; there is no reason to expect sceptics to like it any more than we should expect atheists to be impressed by a religious sermon. Intuition can be misleading in such matters – all the more reason why big organisations should test out their new policies whenever they can.

Tim Harford’s book ‘Adapt’ is available in paperback (Little, Brown).

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