On April 12, 2018, a store manager at a Philadelphia Starbucks called the police on two men who were waiting for a meeting, but had not yet made a purchase. Some of what happened next was captured in a video that's been viewed more than 11 million times. By the time police released details of the episode, #BoycottStarbucks was trending on Twitter.
Kevin Johnson, the CEO of Starbucks, later publicly apologized and vowed to "fix" the issue. By May 19, Starbucks adopted a new Third Place Policy, which comes from the urban sociologist Ray Oldenburge's notion of "third places" as the spaces on neutral ground where people can gather and interact with one another.
"We want our stores to be the third place, a warm and welcoming environment where customers can gather and connect," the coffee giant said in a press release. "Any customer is welcome to use Starbucks spaces, including our restrooms, cafes and patios, regardless of whether they make a purchase."
Not only does the Third Place Policy redefine what is and isn't allowed in Starbucks stores, but incidents like the one above should prompt small and large businesses everywhere to reevaluate what it means to be a customer, whether that person appears in your brick-and-mortar location or if they are just visiting your website.
Evolution of the 'customer'
Margaret J. King, director of The Center for Cultural Studies and Analysis, believes the term "customer" has begun to fade from its retail origins as a buyer of goods and services, which can be traced back to the 1400s. That's, in part, because of a decline in brick-and-mortar shopping. For instance, 6,700 stores shuttered in 2017, according to Fung Global Retail and Technology, which is changing what customer service looks like.
"When customers are more than receivers of commodities, goods and services – when they don't buy and go away but stay, pay and play – you have a snapshot of the economy of the 21st century," King said.
The accessibility of communication between businesses and customers in the digital age has changed the dynamic between the two. It used to be that shoppers could only communicate with companies by visiting in person, writing a letter or calling customer support. Today, consumers can do all of that, plus use digital channels like email, live chat and social media. Regardless of the channel they are using, users expect to be known and served promptly.
When expectations aren't met, individuals often complain, not only to your business, but to the rest of the world. With the growing accessibility to share experiences (whether it be positive or negative), the customer service industry is valued at $350 billion a year and is expected to grow.
Giving the loyalty treatment before the first purchase
Companies are pouring their budgets into advanced technology that caters to their audiences on every channel imaginable. For online purchases, 51 percent of consumers think a business should be available 24/7 and 73 percent of consumers believe Live Chat provides the highest satisfaction levels.
Customer service specialists are listening to these preferences. More than a third of all U.S. businesses have some sort of live chat service. In most cases, multi-time purchasers and prospective buyers are given the same treatment on the popular platform.
For a quick experiment, I took to Amazon's Live Chat to see how the company approached inquiries that weren't directly related to a buy. After answering a few questions about the topic of my query, I was matched in a chatroom with Angela.
"Everyone has the same accessibility to our customer service team," Angela told me when asked if I could still use the chat, even if I wasn't planning on purchasing something.
If you use the live chat feature on Eat Your Coffee's website, you'll be talking to one of the energy bar's seven team members. More than often, it'll be Johnny Fayad, the company's co-founder and CEO responding.
Fayad said the inquiries he gets via live chat rarely come from individuals who don't eventually make a purchase. Usually he gets messaged only when a site visitor is nearing a decision and has specific inquiries.
"We try to treat all customers the same, especially if they're just asking a question on our website, but we have steeper discounts for some of our more loyal customers and try to engage them with little surprises every now and then," he said.
Cornell's School of Hotel Administration takes a similar stance. According to management professor John Bruce Tracey, students are taught that first-time guests are treated differently than loyal visitors, but many companies focus on being hospitable and customer centric in general.
Paying customers only?
For brick and mortar institutions, practicing outstanding customer service gets a little more complicated, as Starbucks, CVS, Waffle House and others have recently learned.
Walmart is a company known for its excellent customer service standards; most famously for its "greeters." When shoppers enter a store, an associate is almost always positioned to greet customers with a hello and a smile.
"Greeters are a big part of our company and culture," wrote Mark Ibbotson, executive vice president of central operations for Walmart U.S., in a blog post. "Providing customers with an excellent first impression is part of Walmart's broader strategy to ensure simpler, more convenient shopping."
For individuals who enter a premise solely searching for a water fountain, restroom or place to escape intense weather, Tracey says more enlightened firms will welcome everyone with a smile and open door.
"While not everyone may be a current or potential paying customer, hospitality does not require an economic transaction," Tracey said.
Apple is another example of customer service that goes above and beyond, online and in person. The company sends all new managers for hospitality training from the Ritz-Carlton, which is known for its own customer service credo. The Ritz-Carlton says the company's core belief and highest mission is "the genuine care and comfort of our guests." The company outlines three steps to quality service: "a warm, sincere greeting," "anticipation and fulfillment of the guest's needs," and "a fond farewell using the guest's name."
Some business owners might want to embrace community spirit and open their doors with a smile, but many may decide to stick with a "paying customers only" policy. And in most cases, they have a legal right to do so.
Countering Customer Service Biases
Last month, the Supreme Court ruled in favor of the Colorado baker who refused to bake a cake to celebrate the marriage of a same-sex couple because of religious objection. Baker Jack Phillips certainly doesn't consider everyone who enters his shop a customer and as a result, has faced some negative pushback, particularly on the shop's Yelp page.
But most businesses want to be welcoming to all and avoid such sensitive subjects. With Starbucks, CVS, IHOP, Denny's and Applebee's all making headlines about racial biases in their customer service practices, institutions are beginning to instill anti-bias education in their core training practices. For instance, this past May, Starbucks closed 8,000 stores nationwide to provide 175,000 employees with four hours of racial bias training. [Read related article: Can Artificial Intelligence Solve Your Bias Problem?]
In another case, Food Service Training Portal released its Anti-Bias eStart online tool on July 19, platforming itself on a Harvard University study that found more than 70 percent of foodservice employees exhibited some form of unconscious bias. The service challenges users to examine their motivations and guides employees to express the company's values to all co-workers and customers.
The operating costs of modern business
Robert Garcia, owner of iPatio Umbrella, decided in his first year of operation that his customer wasn't just the person who purchased from the company, but also the person who came to learn, research and be told the truth.
"In essence, making that purchase somewhere else or deciding not to purchase at all based on the experience our small company provided made them my customer and my responsibility," Garcia said. "Maybe they never buy an item from me, or decide that the information from my site or on the phone helped them to make a better investment in their home."
Claire Goodwin, legal affairs consultant at Farzam Law Firm, said her firm's perception of a customer extends to anyone who brings opportunity. She said it was common for potential clients to take a free legal consultation with a law clerk, but ultimately decide against pursuing the matter. Free consultations don't always lead to a direct profit, but the company views it as part of the operating costs of modern business.
"True customer service is meeting the needs of your customer within the boundaries of the circumstances they are able to meet you, even if that is something as simple as an unpaid seat at a café or a helpful phone call," Goodwin said.
These complimentary services, whether it be a consultation, information or even a "third place" to gather, are ultimately designed to increase the likelihood of a prospective customer becoming an active and loyal customer.
Nancy Friedman, president of The Telephone Doctor, thinks you should always practice outstanding service because you never know who your next customer might be.
"Starbucks has made a smart decision," she said. "I know because I've gained new business from people who I never expected to be clients."
The definition of a customer and the treatment of prospects, new purchasers and loyal buyers ultimately comes down to each individual business. Some view the term as outdated, considering the many amenities that are extended to individuals who never pay anything.
"We really do need a better term to begin embracing not just the service economy, of which Starbucks is a member, but also the new economy based on experiences," King said.
But others view the multi-dimensional expression as an indication of the necessity for superb customer service in today's competitive market.
"So, while distinctions are certainly made, enlightened hospitality companies know that their employees need to be courteous and nice to everyone – customer and non-customer alike," Tracey said.