Starbucks has a G.M. moment
Judging by its latest ad campaign, Starbucks is losing touch with its customers, just as G.M. did. So here's a suggestion to turn the coffee giant around.
Graphic by Matt Fikse
Full disclosure: I've gone to Starbucks at least twice a day pretty much forever. Two tall drips in grande cups with a little bit of nonfat milk sets me back about $3.74 or just shy of a grand a year. For a treat I'll trek to Stumptown, Umbria, Vivace, or Verite and savor the taste and the time in a way I never do at Starbucks. In my head — and in reality — the two experiences are completely different.
Starbucks' latest ad campaign attempts to convince us otherwise and fails. Instead, one wonders if we're witnessing a "GM Moment" in the history of the coffee leviathan.
Were it possible to go back in time and find the precise moment where cracks first appeared in General Motors' relationship to its own customers, the instant where the world darted but the company weaved, perhaps it was something like the ad campaign we're seeing from Starbucks right now.
The ads proclaim Starbucks' exceptionalism. Among them: "If your coffee isn't perfect, we'll remake it; if it still isn't perfect, you must not be in a Starbucks."
This is marketing overreach. Try to convince your customers that you are something everyone knows you're not and you start down the slippery slope of corporate self-delusion. Starbucks' defensive campaign is pleading, snarky, and ultimately off-putting. Once a company gets to the point of positioning the customer as the problem, ("They just don't understand us!" "Other people have gone to school on us!") it might not appreciate how much market share is evaporating until it sees the vapors in its rear view mirror. Ask the General about that. (Pontiac Aztek, anyone?)
Very few people go to Starbucks for the perfect cup of coffee. Vast hordes of people go to Starbucks for coffee that is good enough, fast enough, hot enough, and close-by-enough to get through the rest of the day.
If Starbucks wants to be truly in tune with the times and the temper of its customers, it should take a stab at a new product that gets the zeitgeist right: "The StarBuck." A one-dollar cup of smooth drip, tax included. Available every day until the Dow hits 10,000 again.
A good basic cup of coffee at a great price would pull students from the indies and cause pickup trucks to veer away from McDonald's often enough to boost Starbucks' traffic — along with the chances of selling some add-on stuff. Four-dollar diehards will still order their froofy coffees because they love 'em. And if they can't afford them any more they'll still come for the StarBuck instead of stopping altogether. It it's good enough, cheap enough, and fast enough, gosh darnit, people will drink it. Even people who would have never dreamed of being caught in a Starbucks before.
Having hipster baristas on YouTube telling the "truth" about the "myth of four dollar coffee" won't change minds much less actual coffee habits.
Any minute now Starbucks will have more employees (172,000 and presumably going up) than General Motors (235,000 and definitely going down). Starbucks makes money; GM doesn't and won't anytime soon. But the trajectory of Starbucks' earnings isn't reassuring and the tone-deaf ad campaign will likely have zero impact on those numbers.
A Starbucks store may count as a fancy coffee joint — but it's one of sixteen thousand such fancy joints. Truth is, Starbucks are more useful than they are special. And there's nothing wrong with that.
The company isn't likely to win or keep any more customers just by nagging us about how we just don't get it.
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Comments:
Posted Mon, Jun 8, 8:33 a.m. Inappropriate
I'm not sure it's a GM moment as much as it is a Coca-Cola moment. Starbucks first made me hesitate with the swill it calls its Pike Place Roast. It was like tasting New Coke. That, combined with the economy, has made me less of a Starbucks devotee. Either way, Matt is right -- the company is going to have to wash down humble pie with its own coffee pretty soon.
Posted Mon, Jun 8, 9:48 a.m. Inappropriate
This is a good idea with one problem—Starbucks drip coffee is uniformly terrible.(Granted this is a personal taste thing—but the drip does seem to be over roasted.) Love the espresso, and even the tea is good, but a basic cup of Starbucks drip rivals 20,000 mile motor oil from my 1993 GM car.
Perhaps this proves your thesis. Starbucks just needs to make a decent South American based drip for a buck just to prove that they can.
Posted Mon, Jun 8, 9:51 a.m. Inappropriate
In my mind, Starbucks has a couple of things going against it. One is the economy, and everywhere you look the top item on the list of "how to pare down your budget" is stop buying coffee. In fact, you almost get at this with your initial comment in the article about how much it amounts to over time. Personally, I've begun redirecting my coffee spending to a handful of small indie businesses I'd like to help keep in business, which has translated to a loss to Starbucks. Sure, this is anecdotal, but what if everyone either pares back or redirects?
At a broader level is overrepresentation in the market. You can't throw a rock in these here parts without hitting a Starbucks. There are three within walking distance of my office: a company-owned, standalone store; and the coffee bars at both Safeway and Barnes & Noble. They're competing with themselves, and I don't think they put the brakes on their unfettered expansion early enough.
Posted Mon, Jun 8, 9:52 a.m. Inappropriate
Back-to-basics with logo and ads, and the buck-til-10,000 sound like good strategies to me. you should be on retainer.
Posted Wed, Jun 10, 8:23 p.m. Inappropriate
I like the buck idea too as all I ever get is plain coffee with cream when I occasionally go there to meet friends. It was about a $1.67 last time and that is still way more than mine at home which is my lazy preference. So lets hire Fitske to run the company.
Posted Thu, Jun 11, 6:24 a.m. Inappropriate
niece piece but even though its a seattle based company who cares about starbucks? any coffee lover knows the drip coffee blows. the worst is on weekends when I go to buy the NY sunday Times and middle aged ballard-ites with infants and kids are streaming out the door buying steamed milk or soy latttes and hovering around like it's the farmers market. who brings a kid to a coffee shop? go to starbucks on saturday and sunday and watch just for kicks!
Posted Tue, Jul 14, 10:01 p.m. Inappropriate
Where Starbucks lost it's way.
Can you say VIA? It's version of Folger's crystals?
Or that it's trying to squeeze out local vendors for it's pastries and go to frozen?
Or that Howard (Sonics Seller) Schultz was quoted as saying "those folks at McDonald have some pretty good ideas."
Starbucks is no more than an upscale McDonalds as it is.
Soon, very soon, you'll see Starbucks or Seattle's Best which Starbuck's owns in "other" fast food chains.
They tried to grow to fast and screwed it up.
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