Membership Lessons from Starbucks' Near-Death Experience

In 2008, Starbucks was in a bad way.

Hit by reduced spending during the Global Financial Crisis and fiercer competition from cheaper coffee options (McDonald's and Dunkin' Donuts), the numbers told a grim story: same-store sales declining for the first time ever and stock price plummeting by almost 50%.

Howard Schultz returned as CEO in January 2008 to lead the turnaround. It was his focus on lead measures that made the real difference.

Lead and Lag Measures: A Quick Introduction

Did the plane land safely? 🛬

That's a lag measure. You look in the rear-view mirror and report.

There's nothing you can do to influence the outcome at this point. Either it was a safe landing, or it wasn't.

A lead measure, on the other hand, is proactive and predictive of future success. It follows the formula "Putting energy [here] will improve results [here]."

What Did This Mean for Starbucks?

In this critical moment, Starbucks tracked some key 'rear vision' lag measures:

• Customer satisfaction scores

• Store revenue

• Repeat customer visits

However, these were accompanied by crucial lead measures:

• "Perfect Drink Promise" - measuring drinks remade without customer complaints

• Speed metrics for each step of drink preparation

• Number of times baristas made eye contact and smiled at customers

• Cleanliness checks completed per shift

• Personal drink recommendations made to regular customers

These lead measures were so effective because:

• They were highly specific and actionable

• Every employee could influence them directly

• They were measurable in real-time during each shift

• They had a clear, proven connection to the desired outcomes

• The measures were visible to all staff through simple tracking systems

The results? Customer satisfaction improved by over 20%, same-store sales recovered, and Starbucks established operational standards they still use today.

The key insight was focusing on granular, daily behaviours that employees could control, rather than just tracking end results.

What Does This Mean for Membership Organisations?

Does your team know what actions contribute to success? Are they doing these things?

You can look in the rear view mirror at big numbers like "how many members do we have?" or "what's our churn rate?" Or you can focus on regular behaviours that contribute to getting more members and reducing churn.

For example:

• Response times to member and non-member queries

• Number of follow-up phone calls to lapsed members

• Number of member testimonials collected

• Number of at-risk members contacted with re-engagement offers

• Number of member success stories shared on social media

Responding quickly, calling members, collecting testimonials, follow-up disengaged members and sharing member stories are all predictive of success at the big measures. The best book I’ve read on this topic (and where I learned about lag and lead measures) is The 4 Disciplines of Execution.

What lead measures will you start tracking today?