Starbucks Brand Abandonment and Brand Re-Capture, All in one Motion

I enjoy dusting off Starbucks’ CEO Howard Shultz’s book, Pour Your Heart Into Itfrom time to time. Reading it reminds me of when Starbucks was Starbucks. You remember, Schultz’s third place, what he describes as an “inviting, stimulating sometimes soulful respite from the pressures of work and home.” That concept has been a passing memory as Starbucks focused on selling more stuff. At least it was a passing memory.

Starbucks Raises the White Flag While Simultaneously Charging Forward

Earlier this year, Starbucks opened the 15th Ave Coffee & Tea store to test a new concept. Actually it was the old Starbucks concept but under a new name. The coffee giant wanted to return to its roots, but knew the public would no longer buy the Starbucks as a third place sales pitch. Trying to do so would create brand confusion. So they gave up on trying to re-brand the old stores. Instead, the solution is to unveil the old heritage with a new name.

Now comes the news that there will be more of this new/old concept. with the opening of Roy Street Coffee & Tea in Seattle. To quote from the Starbucks internal memo about the opening, “As customers visit our stores, we hope they’ll feel a deeper connection to coffee, an enhances sense of community and a greater level of commitment to environmental consciousness.”

That sounds like the old Starbucks to me.

Time to Refocus on the Experience

The past year has not been kind to the Starbucks brand. In the week that Starbucks has yet another new product introduction, there is hope that the customer experience has not been forgotten in Seattle. Could CEO Howard Schultz and company be going back to their customer experience roots out of necessity?

Hot Breakfast Sandwiches

First, the new product: hot breakfast sandwiches. Customers can choose from a variety of wraps, padinis or english-muffin type sandwiches. Sandwiches. currently only available at stores that were opened after October 08. These newer stores received ovens to warm the sandwiches as they were being built. As you may remember, Starbucks had plans to drop breakfast sandwiches last year when Schultz still had what he called a "laser-focus" on the customer experience. Evidently his laser malfunctioned because sandwiches are back.

The picture above is a fetta-spinach wrap I had at a Starbucks in Round Rock, Texas. It was good, not great. A good choice for breakfast on the run. But that's what McDonald's is for, right?

Tuning in the Experience

Now on to the good news. While vacationing in Philadelphia last week, I spent my mornings in the Starbucks on Market Street using the free WiFi. One morning a threesome of Starbucks executives stood at the end of the bar watching employees and customers. One of those execs was Starbucks regional director Krista Kondravy. Kondravy and her team, which included the store manager, were observing customer and employee behavior and interaction.

I eavesdropped for a while before introducing myself. Sneaky, I know. Kondravy and her team discussed ways to make the workspace more efficient. and the customer ordering process friendlier. Kondravy told me that one of her responsibilities was to enhance the customer experience. She often went to various Starbucks locations just to observe the customer. She also asked for my opinion and suggestions for improvement.

CEO Howard Shultz has recently said that there will be fewer product introductions this year. That's a good thing. Product introduction has done nothing for the Starbucks stock price and has devalued the brand. Maybe Schultz and company will now focus on the experience that he promised when he took over as CEO.

StarLinks: Good Stuff on the Starbucks Experience

Here are a collection of links and stories involving a Starbucks experience.

Flickr Photo by roland

The Stalk Market - A "Buy-Nothing-Day" protester can't resist not buying an iced chai latte. And then gets protested by his wife.

(STARBUCKS) RED - A manager from North Little Rock goes to the Starbucks Managerial Conference in New Orleans and gets pumped about the (STARBUCKS) Red project. Bono even made an appearance to pump up the troops.

As local cafe shuts down, others wonder how long they'll last. - Local coffee houses experience the anxiety of trying to keep up with Starbucks in a soft economy.

Still something to wake up to in the morning, at least through the holidays - Ottawa store slated to be closed trying to remain open as business steadily increases. Store manager: "We try to make your day better..."

Five Lessons I Learned at Starbucks - A sales consultant has epiphany whilst sitting in a San Francisco Starbucks. Starbucks is a learning experience.

Stupid Humans - Don't complain about gas prices if you're buying your coffee at Starbucks.

What Has Starbucks Become?

As I sit out on the patio of my neighborhood Starbucks sipping a signature hot chocolate and spooning down some Perfect Oatmeal, I marvel at what Starbucks has become. But just what has Starbucks become? I’m not sure. One thing is for certain, Starbucks is no longer a coffee house.

I’m not saying that what Starbucks has become is bad. It is what it is. I do miss the “old Starbucks” however. And maybe that’s just nostalgia talking. I miss the days when the premium coffee experience was new. The days before it took 15 seconds for a customer to recite their secret recipe and order something that resembles coffee. I miss when Starbucks used to be that “third place” that Howard Schultz talks about so often but never pursues.

So just what is Starbucks now? Is it oatmeal and breakfast? Is it healthy smoothies, made to order Frappuccinos? Chai & hot chocolate? Is it better coffee, faster? It’s all of these things, with still more to come. It’s a branding mess, but it’s more (or less) than that.

Starbucks is now also an undistinguished experience; a hermaphroditic jumble of new product introductions. Now being rolled out: the Clover. Soon to come: Sorbetto. It appears that Starbucks has decided the way to a higher stock price is to just sell stuff. Any kind of stuff. What ties all of these products together other than they can all be consumed?

So help me out. What is Starbucks? I’ve previously suggested that it’s a beverage convenience store, but that’s not accurate. An upscale quick serve restaurant? Or is it some new hybrid category?

One thing is for certain, it’s not the old Starbucks and Starbucks is no longer about coffee.

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Check out all previous Re-Experience Starbucks articles in our archive.

It Takes a Pipeline

Anybody tired yet? Starbucks continues to roll out new products one after another, but that's not the way it was supposed to be. Let us recall the day Howard Schultz returned as CEO of Starbucks and promised to transform the Starbucks experience. As part of his transformation agenda, he talked of,

“Re-igniting our emotional attachment with our customers by restoring the connection our customers have with you, our coffee, our brand, and our stores. Unlike many other places that sell coffee, Starbucks built the equity of our brand through the Starbucks Experience. It comes to life every day in the relationship our people have with our customers. By focusing again on the Starbucks Experience, we will create a renewed level of meaningful differentiation and separation in the market between us and others who are attempting to sell coffee.”

And, in a letter to customers Schultz shared that,

“Twenty-five years ago, I walked into Starbucks first store and I fell in love – with the coffee I tasted, with the passion of the people working there, and with how it looked, smelled and felt. From that day, I had a vision that a store can offer a welcoming experience for customers, be part of their community, and become a warm “third place” that is part of their lives everyday – and that it can provide a truly superior cup of coffee.”

Well it is eight months later and where’s the experience? In my opinion we’ve seen little to no improvement in the customer experience. Instead Starbucks has either rolled out or announced several new products. But, no new experience.

Product Development Takes Time
A friend reminded me that changes in a big company like Starbucks take time. They must be developed, tested and improved. Changes need to make their way through the pipeline before they get a nation-wide roll out.

Fair enough. My question then is; Where’s the experience pipeline? Starbucks has been busy developing stuff to sell, but has not been developing stuff to experience. We’ve seen the product pipeline, Pike Place Roast, Vivanno, Clover, Sorbetto, the Perfect Frappuccino, Breakfast. But what have we seen come through the experience pipeline?

Very little, if anything. Some might point to the loyalty card. I might argue the loyalty card self-serving. But even if I concede the card, shouldn’t there be more?

The Experience Pipeline
People crave human contact, they also love coffee. The solution is to give them both. But it won’t be easy for Starbucks to re-ignite an emotional attachment with a customer that is no longer excited about the brand. The company has spent this year trying to figure out how to make customers buy more stuff. But people don’t go to Starbucks just to buy stuff. They can do that at McDonald’s and a convenience store.

Anyway, I am tired of waiting for the Starbucks experience pipeline, so I’m starting one right now. Here are what I consider to be Starbucks experience challenges along with ideas for the new experience pipeline.

The Challenges	The Pipeline
Uncomfortable and hard chairs Small and non-functional tables Limited, inaccessible WiFi – Access to WiFi is currently an exercise in hoop-jumping Ambient noise – can be difficult to have intimate conversations Cups –remember when we used to drink coffee from a real cup and not paper? Charm/individuality - Cookie cutter? That's not a unique experience.	More comfortable seating Convenient tables for: meetings reading work Easily accessible free WiFi - not viewed as a revenue stream but as a customer experience enhancement. Improved acoustics In-store real coffee mugs Regional “charmers” – a marketing position that is responsible for adding local individuality to each Starbucks location.

Now feel free to add your suggestion to the experience pipeline.

Update 9: Customer Loyalty

Part 9 of the ongoing ReExperience Starbucks project with Jay Ehret from The Marketing Spot. Don't forget our survey, which is still open, at the end of the post. Please tell us what you think about the changes at Starbucks!

How does Starbucks create customer loyalty? John Moore at BrandAutopsy said this a few years back:

"For years, Starbucks Coffee has used high-touch methods to build and maintain a loyal customer base. In his book, “Pour Your Heart in It," Howard Schultz, in supremely succinct fashion said, “If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.” That is the true description of a high-touch way retailers can connect with customers to build enduring loyalty. "

John was writing this post to contrast the approach of high-tech methods of building loyalty with high-touch methods of building loyalty. Which approach is Starbucks using today? Let's look at what they have been doing lately to improve customer loyalty and the customer experience.

Customer Service

Starbucks closed all of their US-based stores for a few hours earlier this year to conduct partner (employee) training. Right after the training, it was observed that Starbucks partners were making it a point of asking for customer names again (something they had moved away from) when taking drink orders. They also seemed pretty cheerful and upbeat.

Fast-forward to July 2008. At my most recent experience in a Starbucks I regularly frequent, there was no recognition or asking for names. My mother-in-law was with me, and she pointed out how "grumpy" one of the partners seemed to be. I had noticed this before with the same person. I did notice signs on the wall, directed at partners, which pointed out how to manage fresh bananas (a key ingredient in their new Vivanno smoothies).

I have also noticed a quieter, more subdued attitude from employees at other Starbucks I have been to lately (including my most commonly visited store near my house). I wonder if a combination of store closing news and the introduction of new, time-consuming drinks has weighed-down our barista friends.

Customers Rock! Take: Keep focusing on your employees, especially when things are difficult. They are your brand ambassadors to the outside world. Customers will notice the change in customer service right away!

Customer Experience

I am not sure if this is happening at other Starbucks, but one of our local stores has put in nice, comfy seating - outdoors! Now if they can just 1) keep the tables cleared of trash and 2) put some more cushioned chairs inside, we might have a winner. (Note - that is my Passion Iced Tea on the arm of the chair...)

Introducing... New Products

Starbucks has really been focusing on the introduction of new products in their stores these past few months. First came Pike's Place Roast, a new blend of coffee meant to hearken back to early days when Starbucks was a true coffee experience. Although it has had mixed reviews, the idea of grinding in the store has helped boost the coffee aroma (which was sorely missing before).
Most recently has come Vivanno smoothies (mentioned earlier), the Orange-Mango Banana and the Banana Chocolate. These two new smoothies are high in protein and fiber, and not horrible with respect to calories (compared to the Frappuccino). Reviews of the Vivanno so far have been mixed. One interesting thing I noticed in the comments to the blog post Starbucks' Vivanno vs Jamba Juice was how customers felt like it was out of place to order "smoothies" at a coffee store! Others who are comfortable with the use of protein powders really seemed to like these drinks (see comments in this BusinessWeek post on Vivanno). Personally, I would rather stick with my iced tea and get smoothies somewhere else.

Customers Rock! Take: The Pike's Place Roast has been a good way to try and re-focus on being a coffee store. It still needs some work, but they are on the right track. The smoothies are a good option for someone coming to Starbucks looking for something nutritious to drink. However, is this really why people come to Starbucks?

Does It Make a Difference?

Here are the real questions to be answered. Do these new smoothies help Starbucks get back to the "third place" experience? Does the Pikes Place Roast bring in new customers? Does the Starbucks Loyalty Card bring back loyal customers? So far, the reviews are conflicting. It takes more than new drinks, free WiFi, and comfy chairs to retain customers. It is not just about high-tech vs high-touch approaches. It takes building relationships, one customer at a time.
Starbucks has the opportunity to do so through many channels, both high-tech and high-touch: the daily interactions with customers, the registered Starbucks Reward cards (they have yet to try to interact with me, and I have three cards registered), and their site MyStarbucksIdea (which is heading in the right direction but lacks a true dialogue between customers and partners). However, it just hasn't really happened yet.

Starbucks, I would like to see you be successful in re-inventing yourselves through the customer experience. It would set new standards for other companies who know they should be more customer-focused. It would make your existing customers happier. It would help insulate you from your competition, and they are charging up fast. There is just one thing you still need to do: look at your stores truly from the customers' perspective.

What do you think? Fill Out Our Survey!

Jay and I have put together a short survey to see what you, our readers, think about Starbucks and its “re-Experience” project. Please take just a minute to click on this survey link and fill it out. You could even win, what else, a gift card to Starbucks! We will be report results on our blogs shortly.

(Photo credit: TAlex)