More often than not, you’ll find my blog discussing something inane that a large corporation has done. But not always.
Being a big corporation, there’s plenty of room for “big dumb things” and “big smart things” to co-exist. Starbucks is a good example of a company with room for both.
The smart stuff
By and large, their marketing and positioning are excellent. The terminology they use and the environment they create in their stores produces a place where people feel comfortable hanging out and spending $3-4-5 on a cup of coffee. Their goal (psst, it’s a secret) is to become your “third place”.
What’s a third place?
It’s where you most often go when you aren’t at home or at work. A comfort zone. Smart.
More recently, they’ve taken off in a series of cross-branding measures, such as the high-end chocolates infused with Starbucks coffee that I mentioned last week. Since I wrote that piece, XM satellite radio and CD music sales deals have been announced by Starbucks.
The dumb stuff
At http://www.rescuemarketing.com/blog/2007/05/10/how-are-your-beans-ground/ you can read the specifics, but the bottom line is about Starbucks losing their focus, forgetting what they really do and how a good bit of this started by letting the bean counters (no pun intended) take over.
No doubt, accounting is a necessary and important function – but not a strategic one from a marketing perspective, and certainly not the group you want anywhere near the marketing department. Measurement of your marketing is important, but you don’t need a CPA to do it. Let em keep the books under control – and keep them there.
Anyhow, when the bean counters took over, and we saw things like pre-ground coffee show up in Starbucks stores. Next, they put in automated espresso makers where the barista only had to be coherent enough to press a button after loading the pre-ground coffee.
These things were done for speed. Not because their baristas are stupid.
Starbucks forgot who they were. A billion dollar corporation can get away with that as long as they figure it out early enough. You, on the other hand, are toast if you do that. You don’t have the time, money and market to stumble like that.
How’d they forget?
Instead of being direct competition to Folgers in a can, roasted who knows when, ground who knows where in a factory, they were the place where people ground fresh store-roasted beans right in front of you, and then personally made you a cup of coffee just the way you ordered it, while you watched.
Experiential is what the marketing geeks call it. You’re embedded in the experience of creating your meal. Think Benihana’s – food cooked right in front of you by an amazing guy whose knives are flying so fast you can barely see them – yet you don’t get even a finger tip in your food. Entertainment + food.
Like Benihana’s, the Starbucks experience (ie: entertainment) is part of the drink. Switching to automatic machines ruins that part of the experience. For the coffee aficionado, knowing that the beans were ground a week ago in a warehouse in Bayonne NJ just doesn’t do it for you. Supposedly, that’s why you went to Starbucks in the first place, way back when. Since then, it’s simply become a habit, a third place.
Next move? They announced that they were switching their drinks to use 2% “reduced fat” milk (unless you ask for something else) as a cost-savings move. Publicly, they said it was because of consumer demand (plausible, even though they largely ignored consumer complaints about their use of rGBH milk for years), but leaks coming out of Seattle told a different story: they wanted to save a few cents per cup.
No matter what the reason, this is what happens when you forget why your customers came to you in the first place.
Do you know why your customers come to you? Really?
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