How I Beat Starbucks and Grew Sales 40%

How I Beat Starbucks and Grew Sales 40%
10:08
Starbucks training

Subscribe to our newsletter


Your employees don't smile, greet customers, or follow any script. Your sales are flat. Most retailers don't look in the mirror and realize they're doing terrible.

Starbucks just spent hundreds of millions retraining baristas to connect with customers. The new CEO wants them making eye contact, asking about weekend plans, writing messages on cups.

I applaud the effort. But thirty years ago, I used the same strategy to crush them in Long Beach. The difference? I made it stick.

Here's what Starbucks will learn the hard way.

When David Beat Goliath

In 1994, Starbucks opened a store, ten blocks from my client's coffeehouse in Long Beach. Mike Sheldrake had been the coffee king of Second Street for two decades. With virtually no competition within 20 miles, his Polly's Gourmet Coffee dominated the affluent Belmont Shores market.

Then Starbucks arrived. Sales dropped 10-15% almost immediately.

In 1998, they were about to open another location, this time just 78 yards from Polly's front door. Mike was getting despondent. "We were just trying to hang on," he told The New York Times. "We had a chain problem and didn't know what to do."

When I walked into Polly's, Mike owed more than he sold. Employees were giving away free product for tips. Longtime customers had special arrangements for cut-rate discounts. The tip jar overflowed.

I tightened up service standards. Customers called me the devil. All but one employee quit within 30 days. The regulars were furious.

But once we reset the culture, sales rose 11% the first month. We built a campaign branding Starbucks as ordinary coffee. Our bumper stickers read, "Down the Street From Ordinary." An MBS CSULB marketing study showed 85% of locals knew the slogan.

Sales climbed 40% in 1998 and another 30% the following year.

That work with Mike put me on the map as The Retail Doctor. The New York Times called it proof that "resistance is not futile" when small retailers fight back against chain dominance.

Mike's store is still thriving today. The Starbucks across the street? Closed.

So when I read Starbucks is now trying to teach baristas eye contact and connection, it feels full circle. They've realized what I knew then: you can't win on product alone. You win on connection.

Training vs. Culture

You can't put "connection" in a handbook and expect it to stick. In my last few visits, it seems Starbucks is coaching baristas to ask, "Got any fun plans for today?" That works once. By the third time in the same week, it sounds scripted.

The new CEO Brian Niccol, was laughed at when he ordered Sharpies so employees could write messages on cups. Now his initiative is training them to connect. Without real skill in engaging strangers, employees come across like robots.

That's why so many retailers struggle. Unless employees practice connection until it becomes second nature, it won't sound authentic.

Think about tennis. Watching Carlos Alcaraz doesn't make you trained. Until you've hit 100,000 backhands, it's not in your body. Retail is the same.

Real connection requires skill. I was working with a luxury retailer in New York City when a salesperson noticed a customer's beautiful gold tiger brooch. Instead of asking "Got any fun plans today?" she said, "I really like your tiger brooch. Did you design it or purchase it?"

The customer lit up: "It was a gift from my husband when he got a big promotion at work. He gave it to me over dinner after we saw the Siegfried and Roy show in Las Vegas ... hence the tiger."

Now they had something real to talk about. A meaningful moment instead of weather small talk.

That's what I mean by connection culture. Teaching employees to look for genuine windows of contact, not just follow scripts.

Every time your doors open, you're in the Olympics. Only the best-trained employees bring home the gold: the satisfied customer.

Most retailers aren't even at the baseline of smiling and greeting customers. They're wondering why sales are flat without realizing their service is terrible.

Connection in an Age of Loneliness

One-third of U.S. adults report regular loneliness. For Gen Z, it's 57%. Three out of four restaurant meals are now takeout, shrinking the "third places" where people once gathered. Psychologists warn loneliness damages our bodies like chain-smoking.

People reach for substitutes: algorithm-driven feeds, subscription platforms, AI chatbots. Artificial intimacy fills the void where real connection used to be.

That makes retail matter more. A store visit may be the only face-to-face interaction a customer has all day. Employees who connect create something digital substitutes can't: belonging.

Today's younger employees grew up preferring text over conversation. You can't assume they know how to connect. They need practice and leaders who model what good connection looks like.

When staff feel connected and can't retreat into their phones during shifts, they naturally turn to customers. Neuroscience shows shared experiences sync brain waves and release oxytocin, the bonding hormone. Even a short exchange, a remembered name, or a smile can make someone feel less alone.

What Happens When Connection Fails

This spring I visited Hermès in New York. I had seen a blue scarf online and walked into their stunning flagship, excited to buy it.

An associate approached. I described the scarf and he looked puzzled. Instead of pausing to connect, he waved over another associate. Soon both were scrolling their phones, searching the website, showing me options I had already ruled out.

I could have done that myself.

There was no sense of luxury, no curiosity about why that scarf mattered to me, no attempt to make me feel I mattered. Despite my enthusiasm, they lost the sale.

Whether it's a $6 latte or a $600 scarf, the principle is the same: connection first, merchandise second.

The Connection Problem Is Everywhere

This isn't just happening at one store. In January, I walked through Bloomingdale's men's department looking for a topcoat. I passed nine employees. Not one said a word to me. They were buried in their phones or talking to each other.

I tried on jackets, walked around for 15 minutes, and was ready to leave. Finally, one well-dressed guy at the register looked up and said, "Good morning." Timothy Evans was the only person in the entire department who acknowledged I existed.

I bought the coat, but I never want that experience again. And from the comments on my video, neither do many others.

Whether it's Hermès, Bloomingdale's, or your local shop, the principle is the same: connection first, merchandise second.

What Starbucks Gets Right and Where They'll Struggle

I applaud Starbucks for tackling this head-on. They're standardizing uniforms, redesigning cafes, and carving out time for practice. They recognize that their growth into a "drinks business, a McDonald's of the 1990s," as I told The New York Times back then, has cost them their connection advantage.

But they may stumble if scripts replace substance. A three-hour workshop won't stick without daily reinforcement. Unless managers model and expect connection, baristas will revert to speed over service.

Connection isn't a marketing campaign. It's a culture.

How to Build a Customer Service Culture That Drives Sales

Working with Polly's taught me what Starbucks is learning now:

You can't outspend giants. You have to out-connect them. Sales follow connection. We grew 40-50% when we focused on experience over efficiency.

Culture trumps slogans. When employees resist, turnover may be painful, but replacing them with people who buy into the culture sustains growth.

Chains have organizational advantages and economies of scale. But their weakness is mechanical service without a relationship. People are getting sick of that.

As the bigger chains grow, it becomes increasingly difficult to maintain consistent quality and customer service. That's the independent retailer's opportunity.

How Retailers Can Make Connections Stick

Stores are among the last "third places" left. That's both responsibility and opportunity. Too many retailers only train employees on transactions, ringing sales and scanning SKUs.

To thrive, retailers must train staff to connect. But not with scripts that become hollow after repetition. With genuine skills that create authentic moments.

That's exactly why I built SalesRX+. After decades of seeing retailers struggle with the same connection problems I solved at Polly's, I created a system that makes connection training cultural, not optional.

Associates practice authentic greetings and rapport with our AI-powered Sidekick Rex. Managers can finally hold teams accountable with measurable progress. Training becomes embedded into the culture, every shift, every day.

Starbucks is proving that connection training matters. But without reinforcement, it will fade. SalesRX+ solves that gap, turning the lessons I learned beating Starbucks into a system any retailer can use.

What Retailers Must Do Now

From Polly's to Hermès to Starbucks today, the same truth plays out: people don't just want products. They want to feel they matter.

In a world where loneliness is rising and artificial intimacy is replacing real connection, retailers have a choice. Be another transaction. Or be the place where customers feel seen, known, and connected.

The retailers who choose connection will win. The ones who make it cultural, not scripted, will dominate.

Starbucks is going back to basics, retraining baristas to look customers in the eye. That's the right move. But unless they embed it into their culture every shift, every day, it won't stick.

I learned that lesson beating them thirty years ago. Some lessons are worth repeating.