Starbucks marketing

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

email

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

brought to you by

distilled.net

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