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What is Starbucks missing from its marketing strategy?


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Read the full blog post here:
While Starbucks isn’t a client of ours, we think it’s a fascinating brand. On the surface, Starbucks appears to have all the components required to “future proof” its success: a massive social media following and customer base; a consistent, global coffee experience; and an in depth knowledge of its individual customers through its Starbucks Card program. Yet there are significant ways in which it could improve its online marketing.

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  • 1. What is Starbucks missing from its marketing strategy?
  • 2. A thought experiment from
  • 3. Starbucks is an internationally respected brand
  • 4. ... but it could do a whole lot more to dominate the online space
  • 5. We are going to cover: 1 2 3 Three ways in which Starbucks’ online marketing can be improved The way forwards How to pitch this idea to CEO, Howard Schultz
  • 6. Three areas for improvement
  • 7. Earning Attention 1 Starbucks has millions of customers
  • 8. … despite it being harder than ever to “buy attention” When interests and attention are spread thinly
  • 9. Starbucks followers are an asset It’s got huge numbers of fans
  • 10. Starbucks doesn’t have to pay to “re-acquire” existing customers
  • 11. Real permission works like this: if you stop showing up, people complain, they ask where you went. SETH GODIN
  • 12. People would miss Starbucks if it wasn’t around
  • 13. How Starbucks has earnt attention Build audience Earn permission Earn attention … and how other brands should too
  • 14. Starbucks has a massive offline audience visiting its stores…
  • 15. daily visitors million 9 to its stores Starbucks has around
  • 16. If every Starbucks customer was online, it would be a similar size to…
  • 17. or
  • 18. + + or
  • 19. 34 million people pay attention to Starbucks on Facebook On just the Starbucks US page alone
  • 20. And yet…
  • 21. Starbucks is dependent on other businesses’ platforms … its attention strategy is built on “sandy land”
  • 22. Is it a smart long- term strategy to rely on another platform if there is an alternative?
  • 23. Loyal following 2 Starbucks is great at forming habits among its customers
  • 24. Starbucks provides consistently great experiences
  • 25. Similar to how cinemas sell popcorn
  • 26. Cinemas sell popcorn through... Quality screens Friendly staff Comfy seats Popcorn smell
  • 27. Coffeehouses sell coffee through... Relaxing music Sofas & armchairs Nice décor Coffee smell
  • 28. There are a lot of opportunities around selling coffee Cinema = occasional treat Coffee = daily treat
  • 29. Starbucks creates consistently great experiences online too by curating content for customers in coffeehouses
  • 30. The quality of content is incredible, and free!
  • 31. And yet…
  • 32. The content isn’t personalized… No one reads The New York Times cover to cover
  • 33. Which is surprising because Starbucks does personalization so well in its stores
  • 34. Starbucks gives you a rare opportunity to define yourself
  • 35. Personalized content... ... is the way forwards (like personalized coffee)
  • 36. Identifying with individuals 3 Customers’ identity, location and credit card details all in one place
  • 37. There’s no easier way to buy a coffee than with a Starbucks Card
  • 38. And yet…
  • 39. Starbucks Card and Rewards can become more than “points and plastic” Identity + location + credit card details is a powerful mix...
  • 40. Starbucks knows: (just imagine what it could do) Who its best customers are Where its best customers are Its best customers’ credit card details
  • 41. What Starbucks is missing is...
  • 42. Leverage.
  • 43. Social media Building an audience to earn attention Starbucks Digital Network Consistently great experiences Starbucks Card Identity + location + credit card
  • 44. What happens if you combine them?
  • 45. How Starbucks could leverage its assets to own the third space online...
  • 46. In an increasingly fractured society, our stores offer a quiet moment to gather your thoughts and center yourself. Starbucks people smile at you, serve you quickly, don’t harass you. A visit to Starbucks can be a small escape during a day when so many other things are beating you down. From Pour Your Heart Into It by Starbucks’ CEO Howard Schultz Howard Schultz
  • 47. (broadly speaking...) There are two “modes” in life work play
  • 48. Online, this roughly translates into… work email play social networks
  • 49. Then, there’s the “third space” Somewhere personal between work and home
  • 50. Me time.
  • 51. Me time. If other people are there, okay... but that’s not why you go.
  • 52. Starbucks Places like
  • 53. Where is the Third Space online? Where is “me time”?
  • 54. Not here. Starbucks can do better than this...
  • 55. It’s different, like our coffee
  • 56. What could Starbucks’ Third Space look like? “Break time” from your inbox. Space from social networks.
  • 57. Own platform Personalized content Customer identity Not dependent on Facebook Content picked for each individual’s tastes Based on who they are, where they are and who they’re connected to 1 2 3
  • 58. Three axes of content... Personalize customers’ experiences
  • 59. 1 Length of Media Headline Summary Commentary Long Form Espresso Tall Grande Venti
  • 60. 2 Personalization Different flavours of content for different customers
  • 61. 3 Amount of Starbucks input As published With comments Full commentary Editorial Feature
  • 62. Curate content for Starbucks Card members Move the loyalty program beyond “points and plastic”
  • 63. Leverage Starbucks’ “Third Space” as a platform Use Starbucks Card profiles elsewhere on the web. Sign in with Starbucks
  • 64. User identity User location Prepaid line of credit (ideal for online micropayments) Sign in with StarbucksConnect Who would The New York Times prefer to partner with? Yes If user allows it No Yes Always Always
  • 65. Buying a coffee at Starbucks: the next social check-in? Share to Facebook via Facebook Open Graph and Starbucks mobile apps (keep a presence on other platforms whilst building own).
  • 66. Better still, make it social... Joe Smith Joe shared a Frappucino – with Sarah at Starbucks. about a minute ago 102 Pike Street, Seattle, WA Let customers share their presence in coffeehouses
  • 67. Why “Starbucks Card 2.0” is powerful It knows who you are, your interests and what you care about It knows where you’ve last bought a coffee You’ve already paid + + Identity Location Credit Card
  • 68. Starbucks then becomes a viable, potent competitor to... ... and coffee shops, of course
  • 69. Should Starbucks build a platform ... or buy a platform? Partner or acquire with people who are “nearly there”
  • 70. Unlike Starbucks, publishers struggle with the “third space” Editors make decisions, not readers
  • 71. No one reads The New York Times cover to cover Publishers can’t offer a personalized experience
  • 72. Sending eyeballs away = sending revenue away Publishers are afraid of curation. It contradicts their business model.
  • 73. ...but this isn’t Starbucks’ business model Starbucks is in media, not in the media business
  • 74. The kinds of platforms Starbucks should acquire Internet success + No huge business model = Awesome target
  • 75. Partners and acquisition targets Curators Creators Media Companies Flipboard  |  NextDraft Medium | Svtble | Quora Advance Publications Inc.
  • 76. A Seattle entrepreneur who understands media
  • 77. In summary… The Third Space Social Media Starbucks Card Audience and attention Identity + Location + Credit Card Starbucks Digital Network Online experience
  • 78. How to pitch this to CEO, Howard Schultz
  • 79. Explain you can’t buy attention forever 1 Attention is fragmented and fragmenting
  • 80. Starbucks can’t depend on other party platforms like Facebook in the long term 2 Own your own audience
  • 81. Starbucks is perfectly placed to dominate online media 3 Media companies desperately need partners like Starbucks to survive
  • 82. It’s not that hard for Starbucks to assemble this platform 4 Starbucks already has the partnerships, the processes, the skilled team, the marketing budgets, Starbucks Card, SDN, huge social followings... And there are plenty of people to buy or partner with.
  • 83. Create an ongoing source of signups for Starbucks Card 5 More signups   more engaged customers   more direct sales
  • 84. What’s the smallest first step for Starbucks? A to Z starts with A to B.
  • 85. Test the assumption that Starbucks customers will consume personalized content with an email newsletter Validated Ideas > Untested Ideas
  • 86. Pay for one editor to curate content for a specific subject Arm them with tools such as Spundge and
  • 87. Pull up subscribers through social and in-store channels
  • 88. Email existing customers and Starbucks Card members to drive subscriptions
  • 89. Write and send out custom email newsletters for different interest groups
  • 90. Understand why existing newsletters do incredibly well php/2011/06/21/best-daily-email-newsletters/
  • 91. Compare the level of engagement in the newsletters to existing social channels
  • 92. … then, if there is a true market fit, build or buy a platform to create the Third Space Online
  • 93. Starbucks has aced individual channels... Social Media Starbucks Card Audience and attention Identity + Location + Credit Card Starbucks Digital Network Online experience
  • 94. it’s time to combine and conquer
  • 95. brought to you by
  • 96. Sources Slide 1, 60 & 62 Coffee designed by Sam Ahmed from The Noun Project Slide 2 Image Slide 11 Image Slide 13 Image Slide 21 Image Slide 24 Image Slide 25 Image Slide 26 Friendly Staff Image Slide 26 Popcorn Smell Slide 26 Comfy Seats Slide 26 Quality Screens Slide 27 Coffee Smell Slide 27 Nice Décor Slide 27 & 49 Relaxing Music Slide 27 Sofas & Armchairs Slide 28 Image Slide 34 Image Slide 46 Image Slide 50 & 51 Image Slide 52 Image Slide 56 Image Slide 62 Coffee Bean designed by Pavel Nikandrov from The Noun Project Slide 63 Image Slide 73 Image Slide 74 Image Slide 77 Image