What is Starbucks missing from its marketing strategy?

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Read the full blog post here:
http://www.distilled.net/blog/marketing/how-starbucks-can-enter-the-third-space-online
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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What is Starbucks missing from its marketing strategy?

  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. http://sethgodin.typepad.com/seths_blog/2008/01/permission-mark.html 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 Mention.net
  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 http://www.brainpickings.org/index. 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. ...now it’s time to combine and conquer
  95. brought to you by distilled.net
  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

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