Starbucks: The right combo of sales and marketing
I've got a conflict.
With the goal of supporting small business I prefer to go to privately-held, non-mainstream cafes. But I am often met with a superior experience at Starbucks. Which motivates me more?
Small, off-brand cafes tend to have good coffee, lower prices, and a relaxed atmosphere. Plus, I like to give my $1.50 to the small business, the local guy, the entrepreneur. But I've noticed that the independent cafes are often falling short on a few basic sales and marketing angles that the big coffee gorillas exploit.
Sure, Starbucks has struggled during the last few years. They've had to shut down hundreds of stores. Some bash on them because they're perceived as being the "McDonald's" of coffee. But the Starbucks company and brand are still going strong, arguably stronger than ever. The SBUCKS stock price has been on the rise, so Wall Street likes what they're doing.
One of the things Starbucks does right is sales and marketing. Smaller, independently-held cafes may think that it's all about the product. They need to read a couple of my recent blog posts:
It may seem petty, but I look forward to Starbucks' iTunes Pick of the Week. That alone is worth a dollar; usually two dollars because they often have a couple of different cards available. I've discovered some great new music that way.
Starbucks has a stellar logo. They understand the power of imagery in marketing. They've also done an exceptional job with the inside design of their stores. Starbucks barristas are obviously encouraged to offer samples of different premium drinks, like their Frappuccinos. Did you realize they've got more than 20 different kinds of Frappuccinos?
I was recently in a Starbucks with my dad. He had a Strawberries & Crème Frappuccino (480 calories!), and I had an ice tea (with one pump of sweetner). While I was ordering our drinks I was noticing their new instant coffee brand, VIA Ready Brew. I picked one up to take a look. The barrista said she make a sample so I could try it for the first time.
Starbucks in-store promotion experience carries over to the grocery store
Why is this noteworthy? Because VIA Ready Brew is one of the Starbucks consumer packaged goods that's being rolled out to the grocery stores. Starbucks' is betting big with consumer packaged goods. This Starbucks barrista was doing precisely what her CEO needs to grow the company: get me familiar with a product I'll see in the grocery store.
A few minutes later she brought out a tray with a dozen samples. The samples were attractively served on a large platter, in espresso-sized paper cups with the Starbucks logo on them. She handed them out to everyone sitting in the store. She explained she'd added a splash of hot milk and some vanilla-flavored syrup (which they also sell). Delicious, and a better experience than what I had expected.
This doesn't happen at the local, non-Starbucks store.
The other guys need to step up the competition and take advantage of people like me - the kind of person who appreciates the little differences in what may otherwise be perceived as a commodity.
More people are drinking premium coffee
According to Seattle's Best, a subsidiary of Starbucks, we're drinking more premium coffee. I think this is partially, or mostly due to the experience we have in-store, and its carryover effect in the grocery store and other places. According to the Wall Street Journal, Seattle's Best is currently being served in about 500 Border's bookstores and 2,500 supermarkets. Plans are big, and Seattle's Best will grind away at plans to filter into some 30,000 fast food (known as "QSRs" Quick Serve Restaurants to people in the industry).
Starbucks is trying to pump up Seattle's Best with a new look and tagline, "Great Coffee Everywhere," from agency of record Creature, Seattle. The brand will go from 3,000 points of distribution last year to more than 30,000 before the end of this year. Seattle's Best President Michelle Gass says the appetite for premium coffee is increasing, with 35% of consumers drinking it today, compared with 29% three years ago. Eventually Ms. Gass expects her coffee to show up in coffee carts and vending machines. —Excerpt from AdAge article, "Why You Are Not Drinking Nearly Enough Starbucks"
A final thought about coffee and the economy
When the economy sucks, like right now, we drink a lot of coffee (and booz). We're looking for value, but we're also craving some familiar. By the way, both value and familiarity are subjective.
When enjoyed in moderation, cafes represent an affordable diversion for people of all demographics. In an uncertain world, there's something comforting about retreating to a familiar place and placing an order for a beverage that's made exactly the way you want it.
Wake up and smell the coffee local coffee shop owners! Take some sales and marketing hints from Starbucks. They're beating you.
...And did you know?
Starbucks topped 10 million fans on its Facebook page, making it the most popular brand on the social networking site. Last year, the coffee shop franchise beat out its closest contenders, Coke and Skittles, which each have 6.5 milllion fans.
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