Ronald, Jared & the Mermaid?


Last week it was announced that Starbucks was successful again.

The past few years we have seen a change in consumer spending habits and some companies adjusted while others died.

On a personal note, my wife switched from Starbucks to McDonalds for her daily coffee consuption. She was motivated by price.

I have actually increased my Starbucks visits in the past year. Why? It wasn’t the coffee, but the wifi service. There used to be a couple of local shops near my office that I would give my money to for a cup of java and free internet service. Problem was they went out of business or their internet was not always working.

Meanwhile Starbucks switched over to free wifi and now they get some of my coffee cash, along with a couple other locally owned coffee shops.

Over the past couple years, I’ve been scolding Starbucks for the way they were doing business and it turns out even though they’ve made plenty of mistakes, they are healthy again.

Number 3 on this list from AdAge.com:

Starbucks Becomes No. 3 U.S. Chain, Passing Burger King and Wendy’s

McDonald’s Is No. 1, Subway No. 2, as Burger-and-Fry Perennials Slip on Restaurant List Despite Heavy Ad Spending

Published: April 27, 2011

Starbucks, just a few years ago a flailing company closing hundreds of locations, has become the No. 3 restaurant chain in the nation, surpassing Wendy’s and Burger King, according to Technomic’s recently released 2011 Top 500 Chain Restaurant Report.

For years the top three chains in the U.S. were burger-and-fry heavyweights McDonald’s, Burger King and Wendy’s. Now Starbucks is surpassed only by McDonald’s and No. 2 Subway.

According to the report, Technomic estimates that Starbucks posted about $9.07 billion in U.S. sales, up 8.7% from the prior year, giving the coffee giant 57.2% share in the coffee and other beverage category.

McDonald’s, perennially No. 1 in U.S. sales, had about $32.4 billion in U.S. sales in 2010. Subway, despite having about 9,000 more locations in the U.S. than McDonald’s, had about $10.6 billion in U.S. sales, according to the report.

Top 10 U.S. Restaurants, per Technomic
  1. McDonald’s
  2. Subway
  3. Starbucks
  4. Burger King
  5. Wendy’s
  6. Taco Bell
  7. Dunkin’ Donuts
  8. Pizza Hut
  9. KFC
  10. Sonic Drive-ins

Burger King, on top of recent marketing-management and ownership changes, as well as being on the lookout for a new agency since it announced it was splitting with CP&B after a seven-year relationship, is facing a sales slump. According to Technomic, Burger King, No. 4 on the top 500 list, had about $8.7 billion in U.S. sales, down 2.2% from 2009. In terms of the hamburger category, as well as restaurant chains overall, Burger King could potentially lose to No. 5 restaurant Wendy’s, a chain nipping at Burger King’s heels with $8.3 billion in U.S. sales, according to Technomic.

In last year’s top 500, which ranked chains by 2009 U.S. sales, McDonald’s was No. 1 with $31 billion, Subway was No. 2 with $10 billion, Burger King was No. 3 with $8.9 billion, Wendy’s was No. 4 with about $8.4 billion and Starbucks was No. 5 with just more than $8.3 billion.

Starbucks last year aggressively upped it measured media ad spending, according to Kantar, doubling it to $94.4 million, up from $47 million in 2009. Still, it doesn’t come close to the measured media spending of Wendy’s and Burger King. Wendy’s in 2010 spent $283.4 million, down from $293.4 million in 2009, according to Kantar. Burger King, pulling back over the years on its outlay, shelled out about $301 million on domestic measured media in 2010, down from $308 million in 2009 and $327 million in 2008. McDonald’s spent about $887.8 million on U.S. measured media spending in 2010, up from $872.8 million in 2010.

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The Instant Mermaid?

For all the time I spend in coffee shops, I could live without coffee.

I am working my way thru a Starbucks gift card I got this month, and somewhere I have a gift certificate to one of my favorite local shops. But I’ve never had Starbucks instant…

Someone has though according to AdAge.com:

How Via Steamed Up the Instant-Coffee Category

Starbucks’ Premium Blend May Have Swayed Skeptics but It’s Yet to Realize Goal of ‘Additional Usage Occasions’

Published: January 24, 2011

CHICAGO (AdAge.com) — When Starbucks entered the instant-coffee market two years ago this February, the company was not bashful, heralding the Via launch as a “transformational” moment that would “reinvent” the much-maligned instant category. And when the brand went national that September, President-CEO Howard Schultz flatly said it “will change the way people drink coffee.”

REMOVING THE SHAME FROM INSTANT COFFEE: U.S. consumers have avoided ready-made brews, associating them with lower quality, but in Europe, they're the norm.
REMOVING THE SHAME FROM INSTANT COFFEE: U.S. consumers have avoided ready-made brews, associating them with lower quality, but in Europe, they’re the norm.

Was he right?

It’s hard to argue with Via’s sales results — topping $180 million globally as of December, according to the company — which have proven some skeptics wrong.

“I was very dubious as to its chances of successes. We just didn’t see that an instant-coffee product would do well in the U.S.,” said Bill Patterson, an analyst with market researcher Mintel. But “we are being proven wrong on that,” he added. “They should be pretty pleased with what they’ve achieved.”

But if the coffee giant was aiming for a radical makeover in how consumers enjoy coffee, it has missed the mark — at least so far, said another expert.

“The whole idea that people are going to put this in their purse or briefcase and walk around with it and make their own Starbucks in a flash, I think is unrealistic,” said food industry analyst Phil Lempert. Mr. Lempert, who runs supermarketguru.com, even put Via’s recent flavored-coffee line extensions on his list of the worst products of 2010, offering this review: “This is one of those products where the added convenience just does not make up for the taste. Inside one of these little packets is a secret recipe of instant and ‘micro ground’ coffee. But the first ingredient is not coffee — it is actually sugar. No aroma, no real coffee flavor, and for about a buck each — no sale!”

Back in 2009, Mr. Schultz predicted that coffee lovers would incorporate Via “into their daily routine so they will never be without great coffee.” In other words, Starbucks sought to increase the number of times per day people drink coffee — or as Mr. Schultz said, create “additional usage occasions.” As a result the coffee giant would not only take market share from other instant- coffee brands, but grow the entire category.

By that score there is evidence of success. Via hit grocery and drug stores in May of last year and for 2010 was already the fifth-best-selling instant coffee brand by volume in the U.S. with 10.4% market share, according to Euromonitor International. While other brands lost dollar and volume share — including a four-point loss by market leader Folgers instant, which has 22.9% volume share — dollar sales in the entire category grew by 15% to $704.9 million. That’s a big jump for a category which shrunk three of the previous four years, with the only increase coming in 2008 at a modest 1.8% gain.

“I think Via contributed a lot of incremental volume to instant coffee,” said Richard Haffner, head of global beverage research at Euromonitor International.

For Starbucks, opportunity lies in persuading skeptical Americans to try instant for the first time by enticing them with a more premium version, which, by the way, is also more expensive. Historically, U.S. consumers have mostly avoided ready-made brews, associating them with lower quality. In 2010, instant retail coffee sales in the U.S. accounted for just 8% of the overall coffee market compared with 77% in the U.K., for instance, according to Euromonitor International.

In Europe “you’ve got a culture where people are always boiling in the kettle for tea,” said Mr. Patterson. “If you’re boiling in the kettle for tea … the easiest thing is to make coffee with the same tool.”

In the U.S., Starbucks is seeking to change the coffee culture by leveraging what no other competitor has — a network of 3,000 licensed stores that sits inside grocery stores where the company, though sampling, can increase Via awareness. “The grocery channel, the trade, would probably have no interest in a traditional new instant coffee priced at 6 times [higher than] traditional instant coffee unless it had the brand name of Starbucks and was validated in our stores,” Mr. Schultz said at a recent investor conference. “And that’s exactly what’s happened.”

But Mr. Haffner isn’t ready to call it a victory just yet: “I think what will tell the tale will be [this] year and how much of the volume they generated [last] year they hang on to.”

In Defense of Starbucks


I read this commentary and it makes sense.

Still I have my reservations, not about the logo design, but what is Starbucks going to be anyway?

From Mediapost:

Unshackling Starbucks’ Logo by Vikas Mittal

As our research shows, highly committed consumers react negatively to logo redesigns. To the extent that highly committed consumers are closely connected to the brand, any change can be seen as negative. This is why such changes should be deliberate and carefully managed.

Some experts also are criticizing Starbucks’ move to drop “Starbucks” and “coffee” from its logo. Such criticisms may be shortsighted. Realize that major markets for Starbucks lie abroad and not within the U.S. Starbucks has about 400 stores in China and plans to triple that in the next few years. Similarly, it is set to enter India in the next couple of years with a presence in many other countries and cultures.

In such a multicultural, multilingual, and ethnically diverse marketplace, it is important for Starbucks to consolidate its logo by simplifying it, removing linguistic elements, and broadening its value proposition, which is not limited to coffee alone.

By simplifying the logo, Starbucks has obviated the need to translate the words “Starbucks” and “coffee” on its logo into many different languages as it enters regions where English is not the main language. It may seem difficult now, especially to U.S. consumers, but in the long run a visual logo without text will do Starbucks a lot of good. Obviously, the benefits will only materialize if Starbucks supports its brand positioning through marketing-mix elements such as innovative products, high-quality service, and the café ambience people have come to associate with the brand experience.

Could customers get confused if they don’t see the words “Starbucks” and “coffee” enmeshed within the logo? It is possible, but not probable. Unlike branding experts who seem to focus on the logo as an isolated entity, customers are usually not presented with the Starbucks logo in isolation. In most cases, customers are in a Starbucks café and know they are buying Starbucks coffee.

When buying Starbucks products in the supermarkets, the logo is displayed on the packaging, which also shows the brand name and the product description, as well as a differentiating message. It is these latter elements that need to be adapted based on the culture and language of the various international markets. Many companies have successfully adopted such a strategy to have a global brand with local roots, and there’s no reason why Starbucks cannot do that also.

Starbucks has become an iconic American brand. However, it must now reach beyond the U.S. and become a world-leading brand. From this perspective, un-shackling linguistic barriers (“must spell Starbucks in English on the logo”) and crossing the product chasm (“must say coffee”) is a necessary first step for Starbucks.

Clearly, Starbucks must support its logo redesign with appropriate investments and resources designed to deliver on the brand promise — high-quality product, superior service, and distinctive psychological associations. CEO Howard Schultz has the right ideas — and execution capacity — in that regards. Let’s sit back, take a sip, and enjoy!

Economic Recovery is in the Beans


My wife introduced me to coffee shops when we met 10 years ago. I never had a $5 cup of coffee before.

In Fort Wayne, we saw plenty of locally owned and operated shops open and close since 2000. We still have a few mom & pops, but Starbucks arrived and they were a game changer.

At one point, we had a full size Starbucks in a parking lot outside of a Meijer SuperStore where inside they had a Mini-Starbucks!

Both of those stores survived the downsizing that Starbucks went thru a couple years ago, but some in outlying towns were shuttered.

I’ve come to believe that Starbucks is a good company to watch to predict the state of the economy. Because of their size worldwide, they have research in every market they are in or planning to expand to.

Also because they are an experience and not just a food product, they are less flexable with their prices than, say, McDonalds (one of my clients). McDonalds tries to be more than food, but if they doubled their prices, Ronald McDonald would be homeless.

Check out this story on Starbucks future plans:

Starbucks to Double Store Openings on Economic Recovery

Starbucks Corp., the world’s biggest coffee chain, plans to more than double the rate at which it opens stores to an average of more than one a day as the global economy recovers.

“Our ability to navigate through the financial crisis and come out much stronger gives us reason to start growing the company again,” Chief Executive Officer Howard Schultz said in an interview in China’s Yunnan province today. He plans to open 500 stores in the fiscal year that began in October, with 400 outside the U.S., he said.

China, which offers the best opportunities for investment over the next year according to a Bloomberg survey, will be Starbucks’ biggest growth market in two years, Schultz said. Jinlong Wang, the restaurant operator’s China chief, said outlets in the world’s most populous nation will exceed 1,000 in the “near future.”

Coffee chain operators are expanding in the world’s fastest-growing major economy, as increasingly affluent consumers buy more beverages in coffee shops. Starbucks seeks to boost coffee consumption in China, which is at an annual 22 grams per person, compared with an estimated 3.3 kilograms in Japan, according to data from roaster Key Coffee Inc.

Still, Schultz said “one needs to continue to be mindful of the fragile nature of the global economy.”

Opportunity ‘Underestimated’

While 39 percent of 1,030 investors in the latest Bloomberg Global Poll said they were “seeing opportunity and taking more risks,” 35 percent said they were “still hunkering down.”

China topped the list of markets that offered investors the best opportunities over the next year, followed by Brazil, India and the U.S., according to the survey.

“I think the opportunity that we have in China — we’ve underestimated it in terms of the number of stores and the reach that Starbucks is going to have,” Schultz said.

The restaurant chain’s planned store-opening rate will be the highest since the 2008 fiscal year, when it opened 1,669 stores, according to its website. The Seattle-based company closed 45 stores in fiscal year 2009 and opened 223 in fiscal year 2010, which ended Oct. 3.

Schultz didn’t specify how many stores he planned to open in China over the next 12 months.

He faces increased competition. Gourmet Master Co., operator of Taiwan’s largest coffee-shop chain, plans to increase its China outlets more than sixfold to 1,000 by 2015. China Resources Enterprise Ltd., which in June said it will acquire control over Hong Kong’s second-biggest coffee chain, last month said it plans to open as many as 1,000 Pacific Coffee shops in the country.

Market Share

Sales at China’s coffee shops more than tripled to 35 million yuan in 2009 from 11 million yuan in 2004, according to data from Euromonitor International. Starbucks dominated the market with a 69.8 percent share last year, compared with No. 2 player Jiangsu Yueda Group Co. Ltd. which operates Costa Coffee restaurants with 5 percent share, according to the researcher.

The number of specialist coffee shops in the country rose to 613 last year from 220 in 2004. Starbucks outlets comprised 59 percent of the total, while Jiangsu Yueda controlled 6 percent by the end of 2009, according to Euromonitor.

Middle-income and affluent consumers in China will probably almost triple in 10 years, Boston Consulting Group Inc. said Nov. 8. China’s economic prospects remain “sound,” the World Bank said this month. The Washington-based lender increased its estimate for the nation’s growth this year to 10 percent from a June forecast of 9.5 percent.

Schultz was in Yunnan to announce Starbucks’ plans to set up a farm and processing facilities in Pu’er county, where the namesake tea is grown. He said in April he plans to have “thousands” of stores in China.

Starbucks has about 800 stores in the Greater China region. About half are in mainland China, which doesn’t include Hong Kong, Macau and Taiwan. The restaurant chain’s first mainland China store opened in Beijing in 1999.

To contact the Bloomberg News staff on this story: Michael Wei in Beijing at mwei13@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net

Starbucks Lessons


Starbucks.

I could have said, “Don’t be Stupid like Starbucks”, but I said that a couple years ago when they were falling apart.

And lot’s of companies and brands make these same mistakes.

Now that they’ve worked on getting themselves upright again, here’s some lessons that we can learn from their recent history as told to us by Craig Arthur:

How the Quest For Growth Can Be Disastrous for Your Business

Two valuable lessons for all business owners.

By Craig Arthur, Wizard of Ads Partner

Starbucks. The rise. The stumble. The back to basics.

*(Bolding in all quotes by editor)

In his 1997 book “Pour Your Heart into It” then Starbucks CEO Howard Schultz said…

“A company can grow big without losing the passion and personality that built it, but only if it’s driven not by profits but by values and people.”

Schultz went on to say…

“The number-one factor in creating a great, enduring brand is having an appealing product. There’s no substitute. In Starbucks’ case, our product is a lot more than coffee. Customers choose to come to us for three reasons: our coffee, our people, and the experience in our stores.

“We could save millions of dollars every year if we bought even slightly cheaper coffee. If you can raise profits by shaving costs on your main product and 90 percent of your customers wouldn’t even notice, why not do it? Because we can tell the difference.“

”Higher profits, at the cost of poorer quality? The best people would leave. Morale would fall. The mistake would eventually catch up with us.“

Every business has a memory. The memory of sacrificing quality for profit would have been fixed in the minds of Starbucks people forever. It would have been an impossible price to pay.“

Starbucks success was built on a Memorable Customer Experience and Prime Locations.

Aroma
”What’s the first thing you notice when you approach a Starbucks store? Almost always, it’s the aroma. Aroma triggers memories more strongly than any of the other senses, and obviously plays a major role in attracting people to our stores.“

Baristas
”The hiss of the expresso machine, the clunk-clunk as the barista knocks the coffee grounds out of the filter, the bubbling of the milk steaming in the metal pitcher, and, at the bean counter, the swish of the metal scoop shovelling out a half-pound of beans, the clatter as they hit the scale – for our customers, these are all familiar, comforting sounds.

Brand
“Authentic brands do not emerge from marketing cubicles or advertising agencies. They emanate from everything a company does, from store design and site selection to training, production, packaging, and merchandise buying. In companies with strong brands, every senior manager has to evaluate each decision by asking: “Will it strengthen or dilute the brand?”

The CEO’s who followed Schultz should have had that quote etched on their desks.

Schultz stepped down as CEO of Starbucks in 2000, with a total 2,498 stores.

Orin Smith took the reins and at the end of his 5-year term (2000-2004) the total number of Starbucks stores stood at 8,569.

Under new CEO Jim Donald, (2005-2007) the push for expansion accelerated sharply. He added 6,414 stores in three years, bringing the total to 15,011 stores worldwide.

But in the race to please shareholders with increased turnover and increased profits, Starbucks made the major blunder of diluting the customer experience and opening stores in less than prime locations.

On February 14 2007, Schultz sent an email to the Starbucks executive team, with a subject line, “The Commoditization of the Starbucks Experience”.

Here are a few excerpts:
Over the past 10 years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.”

“For example we went to automatic expresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines.”

“This, coupled with the need for fresh roasted coffee… moved us toward the decision and the need for flavour locked packaging.”

“We achieved fresh roasted coffee, but at what cost? The loss of aroma-perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage.”

Luckily for Stabucks, Schultz took back control, and once again they are back on track, but only after a mighty big scare.

In Smart Growth, Building an Enduring Business by Managing the Risks of Growth, author Edward D. Hess wrote, Starbucks shows that: (1) small changes can add up and can have a big impact; (2) rapid growth can dilute a company’s culture; (3) rapid growth can dilute the customer proposition; and (4) the pressure from the public market to grow can cause dilution of quality controls. All of these outcomes can result in a competitive position vulnerable to attack by new competitors.”

Business success can breed arrogance and give business owners a sense of invincibility.

And the race for business growth and increased profit can lead to business failure.

Lessons from the Starbucks experience:

1. Even a strong brand struggles in a poor location. Remember, expensive rent is the cheapest advertising your money can buy.

2. Dilute the customer experience and watch your business collapse. As a business owner you must evaluate each marketing and cost saving decision by asking: “Will it strengthen or dilute our brand?”

Starbucks "Other Brand"

from Brandweek:

Why Starbucks Rebranded Seattle’s Best Coffee

– Elaine Wong

Starbucks is brewing a fresh image for Seattle’s Best Coffee, a specialty brand it acquired in 2003. The coffee giant (last) week kicked off a rebranding effort, which includes a simpler, more contemporary logo and design. Starbucks hopes to grow Seattle’s Best into a billion-dollar business by expanding it to fast-food channels, convenience stores, drive-through restaurants and even vending machines this fall. But the coffee chain faces a challenge presented by competitors like McDonald’s and Dunkin’ Donuts; both have rolled out lower-priced coffee drinks aimed at penny-pinched consumers. That’s why Starbucks is rounding up its best and brightest marketers to lead the rebranding effort. One of them is Michelle Gass, the former evp-marketing, who oversaw the launch of Via. She has served as president of Seattle’s Best Coffee since September. In an interview with Brandweek, Gass and Robson Grieve, president of Creature, the agency that worked on the rebranding, discussed the thinking behind the new Seattle’s Best image, the challenges the brand faces, and more.


Brandweek: You ran marketing at Starbucks and helped grow Frappuccino into a billion-dollar business before being tapped to oversee Seattle’s Best Coffee in September. How would you characterize the transition?
Michelle Gass:
I’ve been with Starbucks for 13 years now and this has been an unbelievably exciting journey. Over the last seven months, I’ve had the opportunity to totally reinvent not only a business model, but a brand. This is one of those icons in the Seattle area, and it’s steeped in decades of history. We have really great coffee that’s approachable and great to drink and we offer a premium experience.

BW: Starbucks has looked to Seattle’s Best Coffee as its next big potential business for some time now. Why is it launching the rebranding and new logo identity just now?
MG:
That wasn’t a deliberate intention on our part. The business was a nice, healthy, steadily growing business and there was just a moment in time when—and I’ve got to credit [our CEO] Howard Schultz—he said there could be something much bigger here. When you look at the history of Starbucks Coffee Corp., we do grow and develop big, emotional, meaningful brands in this world. Not just with Starbucks businesses like Frappuccino or Via [instant coffee], but Seattle’s Best Coffee has the opportunity to be one of those next, big powerful brands that is not only big, but also has a special place in people’s hearts. That is our objective.

BW: So, how did you start? What challenges and category nuances did you have to consider?
MG:
We started with the history. When you go back to the early approach, in the 1970s, the brand was very [whimsical] and fun, but some of that got lost and when we assessed the market today, we thought it was time to bring a little bit of that fun back. We don’t have to take the category too seriously.

BW: What’s your goal with the new rebranding and logo effort?
MG:
We are looking to create a global identity and this is not just a domestic play. We need a brand that reflects our values, and the ones I’m speaking about are fun, optimism, simplicity and mobility and also showing that with great design. When you see Seattle’s Best Coffee and all of our marketing, you’ll get a very clear picture of what we stand for.

BW: How are you looking to expand it?
MG:
Just to back up, our business model is multi-faceted. We have retail cafes, but we also have many key partners. You can find us in [airlines] and in some restaurants, like Burger King. It’s important for us to design a [business model] that honors the great history that we have in Seattle’s Best Coffee, but that also brings forward those attributes that make who we are really special and that invite people [to experience the brand] in expected and unexpected ways.

[And so], we are going to innovate in many new channels and in how we deliver coffee. We have interesting and new partnerships that we’re excited about and we’re working on refreshing our approach to our retail stores and our new products. One example is we recently introduced ready-to-drink iced latte products [in major West Coast grocery, convenience and retail stores].

BW: How did you decide on the creative execution and final logo rebranding?
Robson Grieve:
The thing it boiled down to was as we looked at the business plan, [we realized] that coffee was a bright spot for people and our coffee, [in particular], was a bright spot for people, whether they encountered it at a cafe or at a partner restaurant. We wanted to build a brand around this ideology . . . We wanted to take it and liberate it from this dense to dark structure and put it in a more modern form and turn it into a more flexible, universal symbol of great coffee not rooted in geography or culture, but really from place to place and all of these new places that we need to take it.

BW: Why the whole focus on premium if consumers are cutting back on discretionary spending now?
MG:
There is something really big here, something that we have not fully taken advantage of and now we’re unleashing it from the shadow of Starbucks and saying, “Let’s go build another big, iconic coffee brand.” Starbucks has only 4 percent of the coffee [sales] in the U.S., and that’s less than 1 percent worldwide. So there is room for another coffee brand with a different point of view to coexist happily with the Starbucks brand.

RG: When you look at the data about consumer behavior, spending hasn’t stopped. Spending has shifted and so, people are allowing themselves certain treats or things they want and scaling back on other expenses. I think that’s a positive consumer condition [for growth].

BW: What’s the differentiating factor here?
MG:
The way to think about it is that it’s really about occasions. So many times when you’re craving a great cup of coffee and can’t get it because you’re in the back of the line or there might not be a Starbucks store nearby, your ability to access that great coffee just isn’t there. So we see this wide open space to go to all of these places where traditionally there has not been a cup of premium coffee and we have an opportunity to turn the model around on its head and say, “It’s okay for a great cup of coffee to show up in new distribution models,” and new ways of thinking about coffee that the world has yet to see.

BW: Any new advertising on the way?
MG:
We do have plans under way. Like our voice, [the tone of the ads] will be fun and simple and you’ll see that topic show up in all kinds of places. We’re going to start a two-way conversation with our consumers. We have plans in the works.

And now for another viewpoint, we go to BrandAutopsy:

SBC = Seattle’s Brand Confusion

Seattle’s Best Coffee (SBC) was purchased by Starbucks Coffee seven years ago. Starbucks hasn’t done much with it except to ink distribution deals with Borders and few fast food companies.

On May 12, SBC launched a “brand reinvention” project. A new logo was revealed, a Facebook page was launched, and a very confusing tagline was unleashed, “The next big thing from Starbucks, isn’t Starbucks.”

Paul Williams, former long-time Starbucks marketer, shares his smart take on the confusing brand reinvention of Seattle’s Best Coffee. Give it a read.

And give this beyond confusing video a look. It’s on YouTube and the description only helps to amplify confusion…
SBC_Huh_What

Wait? Does SBC seriously think they can replace Starbucks as the universal symbol for great coffee?

There are so many more confusing elements… just watch the video and read Paul’s post on what went wrong and what should have gone right.

Crappy Customer Service

Now, I’ve seen some horror stories, but this is in the top ten. From Drew last week:

The bar is set pretty low

Posted: 16 Apr 2010 05:29 AM PDT

Ummm, YummImage by Thomas Hawk via Flickr

In marketing, we talk a lot about being remarkable. We want to delight our customers. We want to create moments that they can’t help talking about. In short — we want to stand above our competition in a way that we become the brand of choice.

I’m here to tell you — we don’t have to be on all too high a step stool do just that.

Earlier this week I was in Mt. Kisko, New York conducting a social media workshop for an advertising agency. After we were done, the agency owner and I decided we needed some caffeine, so we swung through the local Dunkin’ Donuts.

What I witnessed in those next 15 minutes could be a half day case course on customer care and employee relations. I’ll try to sum it up.

It’s around 5:00 in the afternoon, so most of the people in line (and there was a significant line) were just buying some form of coffee. There were two guys behind the counter and a manager who flies in with supplies (milk, syrups etc) and then flies out.

It’s taking them forever to fill anyone’s order or advance the line. People seem pretty frustrated with the two clerks — neither of whom seem to actually know how to make many of the coffee drinks. Worse…as they are getting it wrong, they’re sort of giggling about it — clearly uncomfortable. But they’re not asking the manager for help, which I observe and think is a bit odd.

Finally, it’s my turn to order. I order the two coffees and the guy has to ask me 3 times what I ordered. Meanwhile, the other clerk is taking an order from an old man who is clearly agitated. The manager walks by (carrying more milk) and the old man says to him in a very loud voice, “this is the worst Dunkin’ Donuts I have ever been in!” (Now before you keep reading…stop and ask yourself if a customer said that to you in front of a room full of customers…how would you react?)

The manager looks at the old man and in a very sarcastic voice replies, “thanks for the compliment.” The old man shakes his head and then commences to shout at the clerk because he’s making the wrong coffee. I’m thinking to myself two things: First…blog post heaven and second, this can’t get any worse.

I was wrong.

After the old man leaves, muttering under his breath, the manager says to the two clerks — “if that old guy ever comes in here again — you tell him to go someplace else.” In the next breath, he adds, “and if you two would stop talking to each other and listen (and then he shouts for some emphasis) LISTEN to the customers — you wouldn’t be getting all of these orders wrong.” He continues to berate his clerks for a couple more minutes and then storms into the back of the store.

As you might imagine, the two clerks gave him a look that pretty much substituted for the finger and get back to trying to fill the order. Now I get why they didn’t ask him for help.

Meanwhile, I am holding up a $10 bill because we got our coffees (mine was wrong but it wasn’t worth the drama of saying so) but no one has taken my money. Both clerks nod at the other guy when I ask who I should pay. I practically have to insist that someone take my money. Finally, the kid who filled our order starts to ring us up. I remind him of what we ordered. My coffee alone should have been $3.95 but somehow he ends up charging me $4.20.

The point of this incredibly long tale? Here are some of my takeaways:

  • Without training and setting a good example — no employee can be successful
  • Secret shopping is a vital investment if you own a retail establishment
  • The manager/leader of an organization sets the tone for everything that happens
  • As customers, our standards and expectations are incredibly low (which means it should be easy to exceed them.)
  • Some people just should not have “front of the house” jobs
  • It only takes one bad experience can taint the consumer’s impression about the entire brand (I see and think about Dunkin’ Donuts in a totally different way now)

The whole experience was a train wreck. Are you so sure that your management team and front line employees would fare better? Are you really sure?