Creating together and the Starbucks effect

Café society

The earliest menus of the cafe that would eventually become the modern-day Starbucks deliberately mimicked the 1980s-era Milanese establishments that inspired the concept. Coffee options were limited and described in plain language, which was designed to introduce Italian permutations of brewed coffee and milk to American consumers long before terms like macchiato and doppio entered the vernacular.

Sizing was simple, with a standard cup for espresso drinks and a slight upcharge for a bigger one, logically named a “tall”—which over time has become the default smallest size on a Starbucks menu.1 The proliferating array of flavorings and sweeteners were not available, and concoctions like the Frappucino had not yet been conceived.2

From this simple beginning the chain has expanded its offerings such that there are now tens of thousands of possible beverage variations, fine-tuned to the most idiosyncratic patron.3 The rotating menu boards spotlight only the tiniest fraction of these, leaving the majority of options unknown unless discovered during a customer’s past experiences.4

Thus the spectacle of millions dutifully queuing up each morning with their own highly-customized order, specific to the point of absurdity, specifying the number of shots and flavor pumps, the temperature, the type of creamer or level of frothiness, even the size of cups in which the drink is presented.5

Starbucks sits in that paradoxical center of a modern retail business: a highly-standardized global monolith with consistency as a selling point, that simultaneously gives the sense it has personalized its offerings to customers’ exact desires.

Patrons take ownership and craft the option that suits their personal identity, while Starbucks provides the venue and ingredients to accomplish this. An outcome has been loyalty and affinity unmatched by comparable retail outlets.6

If they build it

The Swedish home goods behemoth IKEA is known for its labyrinthine stores displaying furniture sold in compact packaging for easy transport home. Depending on the item’s complexity one can then spend the better part of an afternoon grappling with particleboard panels and fasteners, while flipping through the wordless instruction guide.

This self-assembly was originally a cost- and space-saving feature, but it turns out to have another effect on purchasers. After the effort of transforming parts into a finished product, owners end up imbuing it with the pride of their own handiwork, building stronger affinity than they might otherwise have for a common, inexpensive item.7

Academics studying this phenomenon noted that people who invest their own labor in a product feel unexpectedly attached to the result, no matter how unskilled they may have been or how precarious the resulting bookcase may be. Researchers have dubbed it the “IKEA effect,” given the store’s reliance on purchasers’ contributions to make its products.

This effect is the inverse of the observation that people undervalue that which they receive for free. That which comes easily or requires no investment is disposable.8 Like the Starbucks customer who participates in fine-tuning her drink, and so values it more than she otherwise would, the IKEA buyer thinks more highly of his purchase after investing his time putting it together.

The process needed to finally settle on the exact coffee drink or build a stable bunk bed may be tedious, but it exploits a key principle of human behavior: we place disproportionate value on things we play a role in creating.

Businesses in several industries have latched onto the concept to involve their customers as active participants. Farms advertise pick-your-own days, enlisting suburbanites as temporary apple or strawberry harvesters and getting them to pay for the privilege.

Food companies design instant cake mixes to require the addition of an egg before mixing, even though they could easily be formulated to make the step superfluous—the prospective baker should feel like he contributes something to the process.

Some restaurants center their meals around griddles on which diners complete the cooking of their meals, making them more likely to appreciate the outcome, no matter how charred the result.

In every case, co-creating the solution makes it more personal, and more valuable.

All together now

Whatever you provide, involving your customers or clients in the process of creating it can be more powerful than merely dumping a finished product into their laps. The approach has several benefits:

• It tailors the result. The original, simple Starbucks menu has grown to the point where even baristas have a hard time tracking every variant. The chain uses this hyper-personalized approach to give drinkers the sense they are designing something unique, assembling the perfect beverage from the chain’s vast set of options. Involving those you serve provides a way to meet their needs more precisely. In medicine, patients involved in their treatment are more likely to take appropriate action and share information that helps their care providers choose the best paths. Students given a hand in designing their own learning process can be more engaged than those given a default, one-size-fits-all pedagogy.9
• It deepens understanding. Instead of simple, transparent offerings that are easily understood, Starbucks launched a world-dominating business on the back of arcane options that required translation for those without a study-abroad semester spent in Italy. This was a feature, not a bug, as early customers became the promoters of a coffeehouse culture to countries where it wasn’t previously known. Where you offer something confusing or novel, consider how to engage your customers to help ensure they truly understand it. In client service situations, develop solutions where end users have the chance to create the recommendations with you, instead of offering canned templates. Those who deeply understand what you do can turn out to be your most fervent advocates.
• It builds affinity. Starbucks visitors often have their own signature drink, developed after many iterations, that can’t easily be replicated at a competing café—the more outlandish combinations are even a point of pride for their originators. The company obliges in making them, and in return these patrons have been fantastically loyal, spurring the chain on to its current footprint of some 28,000 stores in 75 countries. Consulting clients that play a role in creating the final recommendation are more likely to adopt them as their own once their advisers have packed up and gone. IKEA’s customers look more favorably on the furniture they exerted themselves to assemble.

In what ways could you engage with those you serve earlier, and involve them more deeply in the journey of creating value along with you?

References

The Starbucks website has a rundown of its corporate history, as filtered through a mild hagiography of its primary architect Howard Schultz.

Background on the Frappucino at Boston Magazine.

The IKEA effect was discussed early on in a Working Paper from Harvard Business School, which also mentions the cake mix example.