what is starbucks missing from its marketing strategy?
DESCRIPTION
Read the full blog post here: http://www.distilled.net/blog/marketing/how-starbucks-can-enter-the-third-space-online While Starbucks isn’t a client of ours, we think it’s a fascinating brand. On the surface, Starbucks appears to have all the components required to “future proof” its success: a massive social media following and customer base; a consistent, global coffee experience; and an in depth knowledge of its individual customers through its Starbucks Card program. Yet there are significant ways in which it could improve its online marketing.TRANSCRIPT
What is Starbucksmissing from its
marketing strategy?
A thought experiment from
Starbucks is an internationally
respected brand
... but it could do a whole lot more
to dominatethe online space
We are going to cover:
1
2
3
Three ways in which Starbucks’ online marketing can be improved
The way forwards
How to pitch this idea to CEO, Howard Schultz
Three areasfor improvement
Earning Attention
1
Starbucks has millions of customers
… despite it being harder than ever to
“buy attention”
When interests and attention are spread thinly
Starbucks followers are an asset
It’s got huge numbers of fans
Starbucks doesn’t have to pay to “re-acquire”
existing customers
Real permission works like this: if you stop showing up,
people complain, they ask where you went.
http://sethgodin.typepad.com/seths_blog/2008/01/permission-mark.html
SETH GODIN
People wouldmiss Starbucks ifit wasn’t around
How Starbuckshas earnt attention
Buildaudience
Earnpermission
Earnattention
… and how other brands should too
Starbucks has a massive offline audience
visiting its stores…
daily visitorsmillion9
to its stores
Starbucks has around
If every Starbucks customer was
online, it would be a similar size to…
or
+
+
or
34 million people pay attention to Starbucks
on FacebookOn just the Starbucks US page alone
And yet…
Starbucks is dependent on
other businesses’ platforms
… its attention strategy is built on “sandy land”
Is it a smart long-term strategy to rely
on another platform if there is an alternative?
Loyal following
2
Starbucks is great at forming habits among its customers
Starbucks provides consistently great
experiences
Starbucks provides consistently great
experiences
Similar to how cinemas sell popcorn
Cinemas sell popcorn
through...
Qualityscreens
Friendlystaff
Comfyseats
Popcornsmell
Coffeehouses sell coffee through...
Relaxingmusic
Sofas &armchairs
Nicedécor
Coffeesmell
There are a lot of opportunities around selling coffee
Cinema = occasional treatCoffee = daily treat
Starbucks creates consistently great
experiences online tooby curating content
for customers in coffeehouses
The quality of content is
incredible, and free!
And yet…
The content isn’t personalized…
No one reads The New York Times cover to cover
Which is surprising because Starbucks
does personalization so well in its stores
Starbucks gives you a rare opportunity to
define yourself
Personalizedcontent...
... is the way forwards(like personalized coffee)
Identifying with individuals
3
Customers’ identity, location and credit card detailsall in one place
There’s no easier way to buy a
coffee than with a Starbucks Card
And yet…
Starbucks Card and Rewards can become more than
“points and plastic”Identity + location + credit card details is a powerful mix...
Starbucks knows:
(just imagine what it could do)
Who its best customers are
Where its best customers are
Its best customers’ credit card details
What Starbucks is missing is...
Leverage.
Social mediaBuilding an audience to earn attention
StarbucksDigital NetworkConsistently great experiences
Starbucks CardIdentity + location + credit card
What happens ifyou combine them?
How Starbucks could leverage its assets to own the
third space online...
In an increasingly fractured society, our stores offer a quiet moment to gather your thoughts and center yourself.
Starbucks people smile at you, serve you quickly, don’t harass you.
A visit to Starbucks can be a small escape during a day when so many other things are beating you down.
From Pour Your Heart Into It by Starbucks’ CEO Howard Schultz
Howard Schultz
(broadly speaking...)
There are two“modes” in life
work play
Online, this roughly translates into…
work
play
socialnetworks
Then, there’s the“third space”
Somewhere personal between work and home
Me time.
Me time.If other people are there, okay...
but that’s not why you go.
StarbucksPlaces like
Where is theThird Space online?
Where is “me time”?
Not here.
Starbucks can do better than this...
It’s different, like our coffee
What could Starbucks’ Third Space look like?
“Break time” from your inbox. Space from social networks.
Own platform
Personalized content
Customer identity
Not dependent on Facebook
Content picked for each individual’s tastes
Based on who they are, where they are and who they’re connected to
1
2
3
Three axes of content...
Personalize customers’ experiences
1
Length of Media
Headline Summary Commentary Long Form
EspressoTall
GrandeVenti
2
Personalization
Different flavours of content for different customers
3
Amount ofStarbucks input
As published With comments Full commentary Editorial Feature
Curate content for Starbucks Card members
Move the loyalty program beyond “points and plastic”
Leverage Starbucks’ “Third Space”as a platform
Use Starbucks Card profiles elsewhere on the web.
Sign in with Starbucks
User identity
User location
Prepaid line of credit(ideal for online micropayments)
Sign in with StarbucksConnect
Who would The New York Times prefer to partner with?
Yes
If user allows it
No
Yes
Always
Always
Buying a coffee at Starbucks: the next
social check-in?
Share to Facebook via Facebook Open Graph and Starbucks mobile apps (keep a presence on other platforms whilst building own).
Better still, make it social...
Joe Smith
Joe shared a Frappucino – with Sarah at Starbucks.
about a minute ago
102 Pike Street, Seattle, WA
Let customers share their presence in coffeehouses
Why“Starbucks Card 2.0”
is powerful
It knows who you are, your interests
and what you care about
It knows where you’ve last
bought a coffee
You’vealready paid
+ +Identity Location Credit Card
Starbucks then becomes a viable,
potent competitor to...
... and coffee shops, of course
Should Starbucksbuild a platform
... or buy a platform? Partner or acquire with people who are “nearly there”
Unlike Starbucks, publishers struggle
with the “third space”Editors make decisions, not readers
No one reads The New York Times cover to cover
Publishers can’t offer a personalized
experience
Sending eyeballs away = sending revenue away
Publishers are afraid of curation. It contradicts their
business model.
...but this isn’t Starbucks’
business model
Starbucks is in media, not in the media business
The kinds of platforms Starbucks should acquire
Internet success+
No huge business model=
Awesome target
Partners and acquisition targets
Curators
Creators
Media Companies
Flipboard | NextDraft
Medium | Svtble | Quora
Advance Publications Inc.
A Seattle entrepreneur who
understands media
In summary…
TheThirdSpace
Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
StarbucksDigital Network
Online experience
How to pitch this toCEO, Howard Schultz
Explain you can’t buy attention
forever
1
Attention is fragmented and fragmenting
Starbucks can’t depend on other
party platforms like Facebook in the
long term
2
Own your own audience
Starbucks is perfectly placed to dominate
online media
3
Media companies desperately need partnerslike Starbucks to survive
It’s not that hard for Starbucks to assemble
this platform
4
Starbucks already has the partnerships, the processes, the skilled team, the marketing budgets,
Starbucks Card, SDN, huge social followings...
And there are plenty of people to buy or partner with.
Create an ongoing source of signups for
Starbucks Card
5
More signups more engaged customers more direct sales
What’s the smallest
first step for Starbucks?
A to Z starts with A to B.
Test the assumption that Starbucks customers will
consume personalized content with an email newsletter
Validated Ideas > Untested Ideas
Pay for one editor to curate content for a
specific subject
Arm them with tools such as Spundge and Mention.net
Pull up subscribers through social and in-store channels
Email existing customers and Starbucks Card
members to drive subscriptions
Write and send out custom email newsletters for
different interest groups
Understand why existing newsletters
do incredibly well
http://www.brainpickings.org/index.php/2011/06/21/best-daily-email-newsletters/
Compare the level of engagement in the
newsletters to existing social channels
… then, if there is a true market fit, build
or buy a platform to create the Third
Space Online
Starbucks has aced individual channels...Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
StarbucksDigital Network
Online experience
...now it’s time to combine and conquer
Sources
Slide 1, 60 & 62 Coffee designed by Sam Ahmed from The Noun Project Slide 2 ImageSlide 11 ImageSlide 13 ImageSlide 21 ImageSlide 24 ImageSlide 25 ImageSlide 26 Friendly Staff ImageSlide 26 Popcorn SmellSlide 26 Comfy SeatsSlide 26 Quality ScreensSlide 27 Coffee SmellSlide 27 Nice Décor Slide 27 & 49 Relaxing MusicSlide 27 Sofas & ArmchairsSlide 28 ImageSlide 34 ImageSlide 46 ImageSlide 50 & 51 ImageSlide 52 ImageSlide 56 ImageSlide 62 Coffee Bean designed by Pavel Nikandrov from The Noun ProjectSlide 63 ImageSlide 73 ImageSlide 74 ImageSlide 77 Image