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Another take on the Shultz memo

Since covering the situation at Starbucks Coffee on BloggingStocks here, I have received numerous comments from readers offering their views on the situation. As a whole, the readers seem to feel like Shultz is correct and, indeed, Starbucks has been losing its "romance." However, in the Wall Street Journal today, there was an interesting take on the situation written by a reader of the paper. Basically, the reader feels that Starbucks's problems are different than those outlined by Howard Shultz in the memo.

Ms. Nolan feels that the real problem with the Starbucks brand is "much more basic: The service is poor and the prices are high." She referenced a recent trip to a Starbucks in Maryland. During this visit, the store was out of cinnamon, sugar, and stirrers, and the store clerk suggested she take those products from a nearby store. However, as Ms. Nolan put it, "I'm not in the habit, however, of sneaking into another shop to steal sugar packets and a stirrer for the overpriced latte I purchased elsewhere."

In my opinion, while some people may feel the romance and theatre is important to Starbucks as a company, undeniably the most important aspect of Starbucks is providing a premier product with a pleasurable experience. This is especially critical because people notoriously pay up for Starbucks products, and if they can't receive this product in its highest quality or a timely manner (when wishing to do so versus staying in the store) they will no longer purchase their coffee from Starbucks. The coffee market is very saturated and Starbucks had better start making some changes or they risk losing market share.

JetBlue dumped from BusinessWeek customer service rankings

JetBlue Airways Corp. (NASDAQ:JBLU) suffered yet another humiliation in the press.

BusinessWeek dropped the low-cost carrier from its first-ever ranking of "client pleasing brands" following the recent embarrassing revelations that it left passengers stranded on the runway for 10 hours during an ice storm. The magazine compares how Southwest Airlines Co. (NYSE:LUV) handled a similar situation and finds that JetBlue's response fell way short.

The airline, of course, says the same thing. Chief Executive David Neeleman has apologized more than Mel Gibson, Michael Richards and Kevin Federline combined. Wait, Federline hasn't said he was sorry yet for his rap album but he should.

This reminds of a time when I was invited to a chemical plant for a safety demonstration. While I was on the site, there was an accident. Timing is everything.

Maybe BusinessWeek is being too harsh. Judging from the huge response to my last JetBlue post, there are plenty of people who think the airline's service is great. But as a great sage once said, actions speak louder than words.

Network Solutions: My online customer service nightmare

For years, I have bought tons of things online – from big places like Amazon.com to small outfits. For the most part, service has been fine, especially from Amazon.com.

About a month ago, though, things went haywire. In one week, I had three bad experiences with online merchants.

The good news is that two of them were resolved very quickly. In fact, in one case, I knew the CEO. His company, VistaPrint Ltd. (NASDAQ:VPRT), is a fast-growing online printer.

Hey, even those companies that are built-to-last get things wrong. The important thing is how they respond. And VistaPrint was flawless. Impressively, I talked to the CEO a couple hours before his earnings conference call (and, by the way, his company had a blow-out quarter).

But my experience was much different with another company, Network Solutions. The company sells web hosting and domain names. I'm sure I've spent thousands of dollars – over the years – with this company.

Continue reading Network Solutions: My online customer service nightmare

Results of Home Depot Q2 Earnings Call

Home Depot got quite a lift yesterday in response to its second quarter earnings report. The stock rose $1.18, up 3.55%, to close at $34.44. The news from Atlanta was good, if modest. Q2 2006 net earnings were up 5.3% to $1.86 billion, versus $1.77 billion in Q2 2005. On the basis of Q2 2006 earnings, Home Depot has scaled back its full year sales growth figure to 14% and has reduced projected earnings per share growth to 10% -- both at the lower end of its range in January 2006.

Bowing to widespread customer complaints about a decline in customer service, Home Depot CEO Bob Nardelli outlined several new initiatives, including budgeting for 5.5 million associate work hours for the second half of 2006. There was no indication how many more hours this figure represents beyond current staffing levels. Home Depot will also introduce a 24-hour customer service hotline: 1-800-Home Depot. By year-end, all Home Depot stores will have one or more customer self-checkout lanes.

There were several flies in today's ointment, however. One was the announcement that Home Depot owes $69 million in retroactive taxes in Quebec due to a change in tax laws. Also, Home Depot is involved in an SEC investigation into its stock option procedures. The company is also named in at least one lawsuit pursuant to those stock option procedures. Home Depot stated that it does not believe these legal actions will have a material adverse impact.

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Last updated: May 28, 2012: 04:53 AM

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