Starbucks – Maybe the greatest WoM program ever?
A ton has been written this week about Starbucks and their first ever decline in customer traffic. Let me say up front that I am not a huge fan of Starbucks coffee. Seni Thomas has an interesting post over at DailyFix and John Moore and Paul Williams over at Brand Autopsy have an excellent line up on the issue. Yes – no question Starbucks went away from their core business. They diversified. They had to. They grew – would have been stupid not to. (Starbucks hyper growth seems similar to what the Gap did before they experienced their downturn in customers- they also seemingly had a store on every corner and they did stray from their tried and tested. Starbucks grew and continued to grow – in size and in the experience they offered. The bigger question for me is whether Starbucks is experiencing what the Gap faced: a consumer that aged and as it did, that consumer’s tastes changed. When The Gap went back to its core – their customers had far more choices and were buying different things. But I digress!
I am of the opinion that Starbucks has always been all about new media – in the sense of earned media as opposed to paid media. People have spent tons on creating WoM programs, seeding conversations, blogger and social media outreach, buzz and viral campaigns and so on – and Starbucks just created a great experience, surprised us and we went forth and spoke about it.
Starbucks moved the goal posts, reframed the question and changed our lives – and they did it without intrusive advertising. And all along the way, they created this comfortable yet seemingly luxurious experience that their customers wanted to talk about and did talk about – online and offline. And Starbucks achieved this in a number of ways that a few years ago would have been seen as ludicrous by traditional business. They trusted their consumers and they gained their consumers trust. They amazed them by allowing the consumers to sit there all day; charged a small mortgage for a commodity product and got a away with it, sold seemingly unrelated products, created a place where you could hang with your friends, and I have even seen Starbucks drive-throughs! They created an experience that was good, consistent and reliable.
And maybe the growth caught up, maybe they wanted to maintain the growth rates, maybe they sensed the party would not go on forever and they began to diversify. And as John and Paul discussed, they lost their focus and some of the experience went with it. In a strange way the very thing they created (that “special” experience) became a commodity because of their growth and because of imitators and competition and that dilution does not include some of the cannibalization that occurs when you have 3 competing stores within a four block stretch in NY and other big cities. The per store unit sales may have plateaued before they began to diversify the products they sold and the growth had to slow at some point as they started reaching a saturation point.
In my mind Starbucks did a fantastic job staying relevant, providing a quality service (not just a product) and they have achieved what some are never able to do with huge budgets – get their evangelists to sing their praises and become their silent sales force. Starbucks has had and still has one of the greatest WoM platforms ever. They just need to keep the experience special and stay aligned with their customers in a way that they are not the commodity that their success and growth has made them. They redefined coffee, the experience and a delivered a home away from home. Their growth had to flatten. Now what? Can Advertising “save” their growth rate? Surely it is not an awareness program. And it is not that it is a bad product. Maybe with Starbucks it is now about: What product.
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