Love Starbucks or hate Starbucks, the company has done many things right in managing its business and brand over its history, and especially since starbadvisor the downturn in 2008. Even I have to admit this, despite my historically not being a Starbucks fan and someone who still doesn’t truly care for the coffee (sorry!). Yet, I have become a Starbucks brand advocate, and its brand development efforts have resulted in this change of heart, turning me into a believer.
There are several key lessons marketers starb advisor should learn from Starbucks’ success:
1. Retrench and recommit. While Starbucks’ performance contracted with the rest of the economy, the company didn’t do what most would – completely shift course while limiting investments. To the contrary, while the company did step back and refocus, founder and CEO Howard Schultz instead reinvested in the brand, its heritage and its culture, reminding the company of its roots and values. Case in point: in an unprecedented move during the recession, he invested over $30 million to take 10,000 store managers and partners to New Orleans to do community service to remind them of the company’s character and values. Another CEO would have focused solely on cutting costs. It’s this level of commitment to the brand and to the company’s employees that started to bring me into the Starbucks fold.
2. It’s about both product and brand. While quality product is critical to creating brand loyalty, you need to stand for more. In building brands, it’s important to remember that your product is not your brand and your brand is not just your product. Great brands have depth and thus are able to extend and grow beyond a single product line. Starbucks has demonstrated this reality well. A key initiative of its turnaround centered on reinvesting in its coffee’s market leadership, knowing this is crucial to the brand’s perception and to ward off competitors entering the space, such as McDonald’s. But at the same time Starbucks was solidifying its commitment to quality coffee, it emphasized that its brand had a broader definition that Starbucks is in the people business, serving coffee, not in the coffee business, serving people. That’s a very different mindset than being narrowly focused on coffee. Starbucks has always focused on this people connection and creating the “third place” for people to connect with baristas and each other. This broader brand understanding allows the company to think beyond coffee and create a richer, deeper brand experience.
3. Seek out consumer input. Brands today are not shaped by brand marketers in isolation; frankly they really never have been. But today it’s magnified: to build loyalty, brands must be owned jointly with consumers and must behave in a way that is open, social in nature, and dynamic. Building these “kinetic” relationships with their consumers requires brands to engage constantly with them and reward them for their involvement. Starbucks did this, recognizing it should reach out to consumers for input and feedback on what they wanted Starbucks do to make their experience that much better. For example, Starbucks learned that one promotion it had launched, Treat Receipt, which allows a morning customer to get a drink in the afternoon for only $2, received significant positive feedback giving them the confidence to launch it nationally.
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