The Starbucks comeback story: The time they lost their focus, only to regain it!!!

Starbucks is one of the best consumer experience-led brands. While certain consumers believe it is a great coffee, in some blind taste tests, Starbucks coffee has finished middle of the pack. Starbucks builds everything around the consumer experience. The brand views itself as being in the “moments” business. The brand stresses the importance of the culture with its staff and uses service values to deliver incredible guest experiences. Employees wear their green aprons with pride.

The moment of escape

For consumers, Starbucks offers the perfect moment of escape between home and work. To spark pleasant moments, Starbucks offers a unique combination of Italian coffee names, European pastries, relaxed and friendly staff, comfortable leather seats, and indie music. Overall, Starbucks creates a warm atmosphere, all in support of a fabulous experience. The experience the brand creates makes the coffee taste great.

Starbucks had tremendous success in growing its brand in the 1980s and 1990s. By 2003, people viewed Starbucks as one of the most modern beloved brands in the marketplace. Starbucks had earned a very healthy position, so it began looking for new opportunities to grow beyond coffee. As Starbucks defined the brand as an “escape,” it naturally looked for other areas where consumers escaped.

Starbucks took their eye off the ball

In 2003, Starbucks created its own music recording company, won eight Grammys, then launched a movie, and started a partnership with William Morris to scout for music, books, and films. Starbucks even opened an “entertainment” office in Los Angeles.

Within five years, Starbucks had lost focus of who it was. These new businesses had become a significant distraction; Starbucks’ core coffee brand suffered dramatically. Without the inspired leadership on coffee, sales plummeted, and the stock price had fallen from $37 to $7.83. The company had to cut 18,000 jobs and close 977 stores. The Starbucks brand was in a complete free fall. Would it be yet another trendy brand to fade off into the sunset?

Creating Beloved Brands Starbucks turnaround story

Starbucks desperately needed to refocus.

The company exited the entertainment business and rebuilt everything back to the coffee ritual. It closed each store location for an entire day to retrain every barista—a symbol of what is most important to consumer experience of the brand. Starbucks created sandwiches, snacks, and pastries around the coffee routine to gain more share of requirements and stretch the coffee routine into lunch and dinner. All these efforts were designed to rekindle the consumer experience.

The following five elements of strategic thinking allowed Starbucks to complete its turnaround plan.

1. Set a vision of what you want

Starbucks wished to become a cherished favorite moment of the day. The question for Starbucks was how to build smartly around the consumer experience to drive significant growth in same-store sales.

2. Invest resources in a strategic program

Starbucks needed to regain its strong bond with consumers, to refocus on the consumer experience and build the brand through its culture-led essence, supported by a phenomenal team of employees. Starbucks wanted to bring this culture to the forefront of the consumer experience.

3. Focus on an identified opportunity

In 2008, Starbucks refocused to shift the coffee ritual beyond mornings. It wanted to build an all-day gathering place. The company broadened the portfolio around coffee by adding desserts, snacks, and sandwiches. Starbucks saw an opportunity in its underutilized retail locations, which remained relatively empty after 11 a.m. The company wanted the broader portfolio to boost lunch and dinner sales, and earn a higher share of the consumer’s wallet and higher same-store sales.

4. Leverage a breakthrough market impact

Starbucks closed every store for a day to refocus on its service, then built a broader portfolio around coffee. The company successfully reconnected with most loyal Starbucks fans. It was able to turn the morning coffee routine into an all-day life ritual, allowing Starbucks to focus on becoming a consumer experience brand, and a gathering place to savor moments with friends and colleagues. 

5. Performance result that pays back

No longer seen as a destination just for morning coffee, but rather an escape at any point in the day, Starbucks saw double-digit growth for five straight years. Meanwhile, the stock price increased 10-fold over that period.

The Starbucks Brand Plan

If you took the strategic thinking model and began to outline a brand plan for Starbucks, these would be the core elements:

  • Vision: Build a cherished meeting place to gather as a favorite moment in consumers’ day.
  • Goals: Increase same-store sales and earn a higher share of requirements among Starbucks loyalists.
  • Key Issues:

1. How do we build an overall consumer experience beyond coffee?

2. How do we drive significant growth in same-store sales?

  • Strategies:

1. Rebuild the consumer experience by training all Starbucks baristas to emphasize how our people make the difference to bring brand lovers back to Starbucks.

2. Enhance the Starbucks experience at lunch with innovative sandwiches and snacks, to reinforce the quality difference at Starbucks to successfully enter the lunchtime market.

  • Tactics: Focus staff on creating amazing consumer experiences. Retrain all baristas. Launch exotic, refreshing coffee choices, light lunch menu, increase dessert offerings. Create shareable experiences to motivate brand lovers to influence others.

My new book, Beloved Brands, coming this spring.

How this Beloved Brands playbook can work for you. The purpose of this book is to make you a smarter brand leader so your brand can win in the market. You will learn how to think strategically, define your brand with a positioning statement and a brand idea, write a brand plan everyone can follow, inspire smart and creative marketing execution, and be able to analyze the performance of your brand through a deep-dive business review.

 

Beloved Brands: Who are we?

At Beloved Brands, our purpose is to help brands find a new pathway to growth. We believe that the more love your brand can generate with your most cherished consumers, the more power, growth, and profitability you will realize in the future.

The best solutions are likely inside you already, but struggle to come out. Our unique engagement tools are the backbone of our strategy workshops. These tools will force you to think differently so you can freely generate many new ideas. At Beloved Brands, we bring our challenging voice to help you make decisions and refine every potential idea.

 

Brand Coaching

We will help you find a unique and own-able Big Idea that will help you stand out from the clutter of today’s marketplace. The Big Idea must serve to motivate consumers to engage, buy and build a loyal connection with your brand. Equally, the Big Idea must work inside your organization, to inspire all employees who work behind the scenes to deliver happy experiences for consumers.

We will help build a brand plan everyone can follow. It starts with an inspiring vision to push your team. We then force strategy choices on where to allocate your limited resources. With our advice on brand execution, we can steer the brand towards brand love and brand growth.

To learn more about our coaching, click on this link: Beloved Brands Strategic Coaching

Brand Training

At Beloved Brands, we deliver brand training programs that make brand leaders smarter so they are able to drive added growth on your brands. We offer brand training on every subject in marketing, related to strategic thinking, analytics, brand planning, positioning, creative briefs, customer marketing and marketing execution.

To learn more about our training programs, click on this link: Beloved Brands Training

If you need our help, email me at graham@beloved-brands.com or call me at 416 885 3911

Graham Robertson bio

The love and tradition behind the Starbucks Red Cups

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If you have been into a Starbucks the last few weeks, you’ll certainly feel the magic of the holiday season.   Every Starbucks feels well-decorated but never over stated.   You can smell peppermint and ginger as soon as you walk in.  If you want to add some flavor to your regular Latte, you can go for a Caramel Brûlé, Eggnog or Peppermint.  And if you want to try one of the Christmas deserts, there’s Gingerbread loafs, Frosted Snowman cookies or the Cranberry Bliss Bar.  Better yet, have you had one of those incredible Peppermint Brownie Cake Pops?  

And of course, there is the Starbucks Red Cup.

As the red cups arrived at Starbucks as early as November 1st, you could see the Facebook posts and my 15 year-old daughter was “SO EXCITED” count down(her words)  But it is such a great understated brand cue for Starbucks to link into the holiday season.  They are in year 10 of the cups, and it’s become something we now connect with the modern day world of Christmas.  

When you look on-line, you’ll see how big these little red cups are.  There is a website dedicated to the countdown.  And of course there are tons of tweets about the Red Cups, every time a consumer has one for the first time, signalling their excitement to all their network. That’s tons of free media.  

Starbucks is a Beloved Brand

In the consumer’s mind, brands sit on a Brand Love Curve, with brands going from Indifferent to Like It to Love It and finally becoming a Beloved Brand for Life.  At the Beloved stage, demand becomes desire, needs become cravings, thinking is replaced with feelings.  Consumers become outspoken fans.  It’s this connection that helps drive power for your brand: power versus competitors, versus customers, versus suppliers and even versus the same consumers you’re connected with.  The farther along the curve, the more power for the brand.  It’s important that you understand where your brand sits on the Love Curve and begin figuring out how to move it along towards becoming a Beloved Brand.love-curve-detailed

When you reach the Beloved stage like Starbucks, it becomes all about the experience and the magical moments you can create.  While you can continue to attack yourself before others can attack you, it’s also about maintaining the love by creating a bit of magic to surprise and delight your most loyal consumers.  For a brand that taps into routine, having a regular set of drinks and desserts around Christmas gives the consumers some festive favorites to liven up the routine a little bit.  Being a life ritual each and every day gets even bigger when you become a tradition each Christmas.

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From a pure business point of view, Christmas starts November 1st all the way to December 31st, which means that one-sixth of the year, you are in red cups.  After 10 years of red cups, Starbucks fully understands how the simple gesture connects with consumers and how it links Starbucks to one of those holiday traditions.  

“When the cups turns red at Starbucks, that’s one of the first cues that the holidays are upon us. The emotional connection that our store partners (employees) have when they open that first box of the red cups and start using them that first day, and the emotional connection they see from their customers, that’s what we strive for. They see that surprise and excitement: ‘Oh, the red cups are at Starbucks!”

– Terry Davenport, Senior Vice President, Global Brand

On top of that Starbucks now has captured the entire calendar with specials around Valentines, St Patty’s day, Easter, Summer Drinks and Halloween (personally, I love the pumpkin stuff).

To stay in the holiday spirit, you can read up on how John Lewis has been using Christmas ads for the past 5 years to really connect with the consumer.  Click on this to get to the article:   John Lewis Christmas ads

Hope you are ready for the Holidays and that your brand results have been strong this year

Do you want to be an amazing Brand Leader?  We can help you.  

Read more on how to utilize our Brand Leadership Learning Center where you will receive training in all aspects of marketing whether that’s strategic thinking, brand plans, creative briefs, brand positioning, analytical skills or how to judge advertising.  We can customize a program that is right for you or your team.  We can work in person, over the phone or through Skype.  Ask us how we can help you. 

email-Logo copyABOUT BELOVED BRANDS INC.:  At Beloved Brands, we are only focused on making brands better and making brand leaders better.Our motivation is that we love knowing we were part of helping someone to unleash their full potential.  We promise to challenge you to Think Different.  gr bbi picWe believe the thinking that got you here, will not get you where you want to go.  Our President and Chief Marketing Officer, Graham Robertson is a brand leader at heart, who loves everything about brands.  He comes with 20 years of experience at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke, where he was always able to find and drive growth.  Graham has won numerous new product and advertising awards. Graham brings his experience to your table, strong on leadership and facilitation at very high levels and training of Brand Leaders around the world.  To reach out directly, email me at graham@beloved-brands.com 

At Beloved Brands, we love to see Brand Leaders reach their full potential.  Here are the most popular article “How to” articles.  We can offer specific training programs dedicated to each topic.  Click on any of these most read articles:

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