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.

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…

18. or

19. +
+
or

20. 34 million people pay
attention to Starbucks
on Facebook
On just the Starbucks US page alone

21. And yet…

22. Starbucks is
dependent on
other businesses’
platforms
… its attention strategy is built on “sandy land”

23. Is it a smart long-
term strategy to rely
on another platform if
there is an alternative?

24. Loyal following
2
Starbucks is great at forming habits among its customers

25. Starbucks provides
consistently great
experiences

26. Similar to how
cinemas sell popcorn

27. Cinemas
sell popcorn
through...
Quality
screens
Friendly
staff
Comfy
seats
Popcorn
smell

28. Coffeehouses
sell coffee
through...
Relaxing
music
Sofas &
armchairs
Nice
décor
Coffee
smell

29. There are a lot
of opportunities
around selling
coffee
Cinema = occasional treat
Coffee = daily treat

30. Starbucks creates
consistently great
experiences online too
by curating content
for customers in
coffeehouses

31. The quality
of content is
incredible, and free!

32. And yet…

33. The content isn’t
personalized…
No one reads The New York Times cover to cover

34. Which is surprising
because Starbucks
does personalization
so well in its stores

35. Starbucks gives you
a rare opportunity to
define yourself

36. Personalized
content...
... is the way forwards
(like personalized coffee)

37. Identifying with
individuals
3
Customers’ identity, location and credit card details
all in one place

38. There’s no easier
way to buy a
coffee than with a
Starbucks Card

39. And yet…

40. Starbucks Card
and Rewards can
become more than
“points and plastic”
Identity + location + credit card details is a powerful mix...

41. Starbucks knows:
(just imagine what it could do)
Who its best customers are
Where its best customers are
Its best customers’ credit card details

42. What Starbucks
is missing is...

43. Leverage.

44. Social media
Building an audience to earn attention
Starbucks
Digital Network
Consistently great experiences
Starbucks Card
Identity + location + credit card

45. What happens if
you combine them?

46. How Starbucks
could leverage its
assets to own the
third space online...

47. 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

48. (broadly speaking...)
There are two
“modes” in life
work play

49. Online, this roughly
translates into…
work
email
play
social
networks

50. Then, there’s the
“third space”
Somewhere personal between work and home

51. Me time.

52. Me time.
If other people are there, okay...
but that’s not why you go.

53. Starbucks
Places like

54. Where is the
Third Space online?
Where is “me time”?

56. Not here.
Starbucks can do better than this...

57. It’s different, like our coffee

58. What could Starbucks’
Third Space look like?
“Break time” from your inbox. Space from social networks.

59. 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

60. Three axes of content...
Personalize customers’ experiences

61. 1
Length of Media
Headline Summary Commentary Long Form
Espresso
Tall
Grande
Venti

62. 2
Personalization
Different flavours of content for different customers

63. 3
Amount of
Starbucks input
As published With comments Full commentary Editorial Feature

64. Curate content for
Starbucks Card members
Move the loyalty program beyond “points and plastic”

65. Leverage Starbucks’
“Third Space”
as a platform
Use Starbucks Card profiles elsewhere on the web.
Sign in with Starbucks

66. 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

67. 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).

68. 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

69. 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

70. Starbucks then
becomes a viable,
potent competitor to...
... and coffee shops, of course

71. Should Starbucks
build a platform
... or buy a platform?
Partner or acquire with people who are “nearly there”

72. Unlike Starbucks,
publishers struggle
with the “third space”
Editors make decisions, not readers

73. No one reads The New York Times cover to cover
Publishers can’t
offer a personalized
experience

74. Sending eyeballs away = sending revenue away
Publishers are
afraid of curation.
It contradicts their
business model.

75. ...but this isn’t
Starbucks’
business model
Starbucks is in media, not in the media business

76. The kinds of platforms Starbucks should acquire
Internet success
+
No huge business model
=
Awesome target

77. Partners and
acquisition targets
Curators
Creators
Media Companies
Flipboard | NextDraft
Medium | Svtble | Quora
Advance Publications Inc.

78. A Seattle
entrepreneur who
understands media

79. In summary…
The
Third
Space
Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
Starbucks
Digital Network
Online experience

80. How to pitch this to
CEO, Howard Schultz

81. Explain you can’t
buy attention
forever
1
Attention is fragmented and fragmenting

82. Starbucks can’t
depend on other
party platforms like
Facebook in the
long term
2
Own your own audience

83. Starbucks is perfectly
placed to dominate
online media
3
Media companies desperately need partners
like Starbucks to survive

84. 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.

85. Create an ongoing
source of signups for
Starbucks Card
5
More signups more engaged customers more direct sales

86. What’s the smallest
first step for
Starbucks?
A to Z starts with A to B.

88. Test the assumption that
Starbucks customers will
consume personalized content
with an email newsletter
Validated Ideas > Untested Ideas

89. Pay for one editor to
curate content for a
specific subject
Arm them with tools such as Spundge and Mention.net

90. Pull up subscribers
through social and
in-store channels

91. Email existing customers
and Starbucks Card
members to drive
subscriptions

92. Write and send out custom
email newsletters for
different interest groups

93. Understand why
existing newsletters
do incredibly well
http://www.brainpickings.org/index.
php/2011/06/21/best-daily-email-newsletters/

94. Compare the level of
engagement in the
newsletters to existing
social channels

95. … then, if there is a
true market fit, build
or buy a platform
to create the Third
Space Online

96. Starbucks has aced
individual channels...
Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
Starbucks
Digital Network
Online experience

97. ...now it’s time to
combine and conquer

98. brought to you by
distilled.net

99. Sources
Slide 1, 60 & 62 Coffee designed by Sam Ahmed from The Noun Project
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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
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Slide 62 Coffee Bean designed by Pavel Nikandrov from The Noun Project
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