Nettie Hartsock: What Must Starbucks Do

Here's a superb interview with author and blogger John Moore on Starbucks and marketing.

1. Hi John - your Changethis.com manifesto "What Must Starbucks Do?" and your book "Tribal Knowledge" are garnering much buzz. Can you give a brief background on your role at Starbucks and from whence you came?

My Starbucks career began in 1994 when I was a part-time Barista slinging coffee drinks in Dallas. Very soon thereafter I joined the Starbucks field marketing team designing and implementing new store marketing plans. By 1999 I was part of the Starbucks corporate marketing team working on in-store and out-of-store marketing programs. I left Starbucks in January 2003 with my last role as a Retail Marketing Manager responsible for managing a quarterly in-store/out-of-store promotion designed to drive nearly $1B in sales.

2. The idea of becoming a major brand and then letting that brand dissipate is not one that comes to mind when you think of Starbucks, yet Howard Schultz noted in a now public memo that, "Over the past ten years, in order to achieve growth, development and scale necessary to go from less than 1,000 to 13,000 stores and beyond, we've had to make a series of decisions that, in retrospect, have led to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand." And to that end, isn't that a natural downside of profitable and expansionist growth - or is there a way to avoid it?

I wouldn’t call it a downside as all businesses face growing pains—it’s natural. Starbucks was founded on the mission of changing the way people in Seattle appreciate coffee. That mission was expanded from a small corner of the world to include the entire world. Now, with over 14,000 locations in nearly 40 countries around the globe, one can make the case that Starbucks has accomplished its mission. Starbucks growing pains are a result of what to do now.

If a business grows, it will eventually face questions of how fast and how far to grow it. I advise business leaders to write down a list of three-to-five areas they never want to compromise as their business grows. And every so often, these business leaders should revisit this list and determine if their actions have compromised on the list. If so, they will need to act and act swiftly.

3. For the love of all of us chain-mocha latte drinkers, what are some immediate ways Starbucks can reclaim its uniqueness?

Starbucks has reached a level of ubiquity to such an extent I’m not sure they can reclaim their uniqueness. The company used to compete on great coffee with customers going out of their way just to get a cup of Starbucks coffee. Nowadays, the company competes more on convenience and consistency than on great coffee.

However, in my WHAT MUST STARBUCKS DO? manifesto, I suggest Starbucks should worry less about monetizing customer traffic and frequency and worry more about making great-tasting coffee. 44-million customers visit Starbucks every week and given all the hoopla around Starbucks music endeavors, it seems Starbucks is more interested in selling customers a CD than a cup of coffee. Same goes for selling books and movies to customers. Starbucks must stop spending its time and talents on how to sell CDs, books, and movies to customers. Instead, Starbucks must use its time and talents to sell more great-tasting coffee.

4. And beyond that, how can any company take Starbucks as an example and use the best insights from its journey and apply it to their own?

This might sound odd, but it’s true. During its formative years, Starbucks never thought about “branding strategy.” Starbucks was too busy building a profitable business and making both customers and employees happy than to worry about “branding.” There’s wisdom in that approach. If a business makes money, makes customers happy, and makes employees happy … then the by-product will be the creation a strong brand. That’s what Starbucks did. And that’s exactly what any other company can do.

5. One of the things you note in your ChangeThis! Manifesto is "If Starbucks wants to return to its roots of being known and revered for the highest quality coffee in the world, then it needs to stop talking about the brand and start talking about the coffee." How does this apply to any company and what they are trying to brand?

Marketing consultants Al and Laura Ries talk about how brand leaders promote the category and not the brand. Leading brands are better off educating customers about the product category more than the brand. For example, Method makes unique household cleaning products. They’ve carved out a meaningful niche in a product category dominated by the megalithic Proctor & Gamble. Method has done this by talking about the product category of all-natural cleaning products more than talking about the Method brand.

Same goes for Whole Foods Market. Whole Foods primary marketing message is communicating to customers why natural and organic foods taste better and are better for you. Their secondary marketing message is the Whole Foods brand.

Both Method and Whole Foods work under the marketing premise that education of customers will lead to appreciation by customers.

6. In your book you talk about "practicing passionate followership" - Can you describe that and 3 things companies can do to empower that practice?

In business life, we’ve been conditioned to lead or get out of the way. We’ve come to believe that being a follower is being a loser and the only way to win is to lead. I’ve come to believe that followership is more important than leadership. Not everyone can be a leader but everyone can be a passionate follower.

Things a business can do to practice passionate followership include:

#1. Don’t succumb to the “Not Invented Here” syndrome. If someone somewhere has found a better way to do something, use it. Don’t waste time and money trying to create a second-rate copy-cat version of something that already works brilliantly.

#2. Never bemoan that your company lacks leaders because it probably lacks passionate followers more than it does passionate leaders.

#3. Foster a company culture where it is better to give than to receive.

7. You also say, "a bigger business doesn't always equate to being a better business. At some point, big becomes bad." Can you give us some telltale symptoms to look for in regard to this?

In the eyes of many customers, big business becomes bad business. Bigness becomes a matter of being convenient rather than being unique (McDonald’s). Bigness becomes a game of market share not customer care (Dell). Bigness becomes ubiquitous (Microsoft).

I advise businesses to the focus their efforts on being better and not bigger. Be the BEST at whatever you do. Become recognized by your customers and by your industry as always delivering the BEST products, the BEST services, and the BEST customer experiences. By being the best, some degree of bigness will follow.

8. Finally, if you had to give one actionable piece of branding advice across the board, what would it be?

Worry more about building a business than about building a brand. As I mentioned earlier, if a business makes money, makes customers happy, and makes employees happy … then the by-product will be the creation a strong brand.