Starbucks is the most successful coffee shop in Mexico

And it’s not because of the coffee!

Starbucks is a fascinating example of the power of customer experience. As of early 2018, according to Statista, Starbucks is by far the coffee shop market leader in Mexico, commanding 39% of the coffee shop market through its 632 stores. Statista shows its closest competitors, Café Punto de Cielo, and The Italian Coffee Company, holding 12.9% of the market each. Full disclosure: all Starbucks stores in Mexico are owned by a Mexican firm called Alsea. Alsea has an exclusive store operation and development agreement with Starbucks Coffee. Alsea also operates Dominos Pizza, Burger King, and other popular American chains. But for the purposes of this article, Starbucks is Starbucks.

As an American consumer in Mexico who regularly patronizes Starbucks, I can unofficially say that the Starbucks stores I visit are as crazy-busy with Starbucks-loving fans as their American and other international counterparts. Each of these consumers will pay something between 40 to 100 pesos, about 2 to 5 US dollars at today’s exchange rate, each time they place an order at Starbucks. That’s what my empirical studies of Mexican Starbucks consumers tells me, anyway. And these customers will come back and place an order day after day, week after week, month after month. They’ll go to their local Starbucks, the Starbucks in the plaza, the Starbucks in the airport, the Starbucks at the hotel, and any other place they can get their fix. Why? Is the coffee better? Are the pastries better? The sandwiches? The lemonade? The candy, the nuts, the blended beverages? My answer to all those questions is ‘probably not’. You can visit the coffee shop on the corner that everyone says has better coffee and pastries. You can buy coffee and all the other things that Starbucks sells much more cheaply in your neighborhood supermarket. You can go to a restaurant and get many of the things on Starbuck’s menu, perhaps made fresh, on premises. So why do people flock to Starbucks, and return, over and over again, despite the high prices, despite the fact that it is a chain-store concept, despite the fact that there are many local, often high-quality alternatives?

The answer is simple: Starbucks provides an outstanding customer experience. Yep, that’s the answer. With few exceptions, the Starbucks experience is the same, every time and everywhere you go. You know what to expect. The service is fast, and the staff are friendly, well trained, and helpful. The coffee, food, and other menu items are consistent. Your particular favorite, be it a grande — no foam — skinny latte, a 5-shot espresso Americano with poquito half and half and extra ice (yes, that’s my favorite), or a simple doppio, meets your lips, taste buds, and your expectations the same way, time and again. And if it doesn’t. They remake it for you. At no charge. With a smile. This is true in Mexico City, in New York City, in Singapore, in London, Beijing, and everywhere else in the world Starbucks operates.

But it’s not just the service and consistency of product that defines the experience. Carrying that Starbucks coffee cup, with that Starbucks logo, in your hand as you walk around the city, the airport, or wherever you walk, is a part of that customer experience. Starbucks has hooked generations of coffee lovers not on coffee, but on coffee experience.

Well so what. Why does that matter? It matters because the experience I have at Starbucks is the experience I want EVERYWHERE, not just other coffee shops. Sometimes I try another coffee shop. They inevitably disappoint me. It’s almost not fair. Starbucks has set the bar so high, that local shops are almost certain to deliver a worse experience. And that annoys me. Can you see yourself uttering these thoughts in your head as you patronize a non-Starbucks?

“What? You don’t have half and half?”.

“There’s no bathroom?”

“You’re closed on Sunday??”

“You can’t make a soy latte?”

“No App huh? Guess I’ll pay in cash.”

“I’ll have a grande… oops, I mean medium…”

“Ugh, this table is filthy. And they are out of napkins.”

“That’s an odd choice of music.”

“Um, this garbage can is completely full and it’s gross.”

“No WIFI? How am I supposed to work? Oh great, no outlet to plug in my computer either.”

Other companies have big shoes to fill, just to meet the expectations I have, let alone exceed them. Recently, my wife told me about a coffee shop in San Pedro Garza Garcia (where we live in Nuevo Leon) that had a great reputation among the locals. She insisted that we try it one day. I have a soft-spot for small businesses, so I reluctantly agreed.

One weekend morning we paid the local shop a visit. We arrived just after the shop had opened. The slightly frazzled barista was hustling to get all the equipment turned on, the napkin dispensers filled, the tables cleaned, etc. People were waiting in line, patiently, while she did her morning opening routine. Note, she was alone. About 5 minutes later, when it was my turn to order, she told me that I couldn’t have espresso as the machine hadn’t warmed up yet. I opted for a coffee and asked for a little bit of half-and-half.

“I’m sorry sir, we don’t have half-and-half”.

“Ugh.” “Ok, whole milk”. “What kind of pastries do you have?”

“Sorry sir, they haven’t arrived yet.”

“Ugh.”. “Ok, I’ll have a banana”.

I paid in cash because the credit card machine wasn’t working. We sat down at a small table inside and waited for her to bring us our coffee (it was still brewing). While we waited, I was talking to my wife about how important it was to nail the customer experience the first time a customer interacts with you. And the second, and the third. I glanced outside to where several patrons were sitting, enjoying the cool morning air, sipping their coffees. I saw a tray of pastries, wrapped in plastic, sitting on one of the tables. The pastries were sweating under that plastic, like a jogger wearing polyester. I guess the pastries had been delivered earlier that morning but the barista hadn’t noticed or had time to collect it and fill the pastry case. Sigh. With this local coffee company, my experience was, frankly, terrible. I’ll never go back there.

Imagine if Starbucks didn’t exist. This coffee company would probably get a return visit from me because of its reputation. I would have attributed my bad experience to bad luck. But Starbucks does exist. Every coffee shop in Mexico, indeed every restaurant and every retailer, to some extent, has to match the experience I have at Starbucks for me to be happy. And I’m not the only consumer who feels that way. Ask the millions of Mexican customers who shop at Starbucks.

Let’s bring this home. If companies can’t match the best experience their customers have with competitors, even competitors that are in different businesses, they risk losing those customers. If you’re a coffee shop, learn from Starbucks. Focus on the customer experience. Let it drive your entire strategy. And watch the customers, and pesos, roll in.

Comments? Which Mexican companies in your view provide the best customer experiences? I’d love to hear from you. Let’s talk!

Until next time.