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What is Starbucks
missing from its
marketing strategy?
A thought experiment from
Starbucks is an
internationally
respected brand
... but it could do
a whole lot more
to dominate
the online space
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
Three areas
for improvement
Earning Attention
1
Starbucks has millions of customers
… despite it being
harder than ever to
“buy attention”
When interests and attention are spread thinly
Starbucks followers are an asset
It’s got huge
numbers of fans
Starbucks doesn’t have
to pay to “re-acquire”
existing customers
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
People would
miss Starbucks if
it wasn’t around
How Starbucks
has earnt attention
Build
audience
Earn
permission
Earn
attention
… and how other brands should too
Starbucks has a
massive offline audience
visiting its stores…
daily visitors
million
9 to its stores
Starbucks has around
If every Starbucks
customer was
online, it would be
a similar size to…
or
+
+
or
34 million people pay
attention to Starbucks
on Facebook
On just the Starbucks US page alone
And yet…
Starbucks is
dependent on
other businesses’
platforms
… its attention strategy is built on “sandy land”
Is it a smart long-
term strategy to rely
on another platform if
there is an alternative?
Loyal following
2
Starbucks is great at forming habits among its customers
Starbucks provides
consistently great
experiences
Similar to how
cinemas sell popcorn
Cinemas
sell popcorn
through...
Quality
screens
Friendly
staff
Comfy
seats
Popcorn
smell
Coffeehouses
sell coffee
through...
Relaxing
music
Sofas &
armchairs
Nice
décor
Coffee
smell
There are a lot
of opportunities
around selling
coffee
Cinema = occasional treat
Coffee = daily treat
Starbucks creates
consistently great
experiences online too
by curating content
for customers in
coffeehouses
The quality
of content is
incredible, and free!
And yet…
The content isn’t
personalized…
No one reads The New York Times cover to cover
Which is surprising
because Starbucks
does personalization
so well in its stores
Starbucks gives you
a rare opportunity to
define yourself
Personalized
content...
... is the way forwards
(like personalized coffee)
Identifying with
individuals
3
Customers’ identity, location and credit card details
all in one place
There’s no easier
way to buy a
coffee than with a
Starbucks Card
And yet…
Starbucks Card
and Rewards can
become more than
“points and plastic”
Identity + location + credit card details is a powerful mix...
Starbucks knows:
(just imagine what it could do)
Who its best customers are
Where its best customers are
Its best customers’ credit card details
What Starbucks
is missing is...
Leverage.
Social media
Building an audience to earn attention
Starbucks
Digital Network
Consistently great experiences
Starbucks Card
Identity + location + credit card
What happens if
you combine them?
How Starbucks
could leverage its
assets to own the
third space online...
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
(broadly speaking...)
There are two
“modes” in life
work play
Online, this roughly
translates into…
work
email
play
social
networks
Then, there’s the
“third space”
Somewhere personal between work and home
Me time.
Me time.
If other people are there, okay...
but that’s not why you go.
Starbucks
Places like
Where is the
Third Space online?
Where is “me time”?
Not here.
Starbucks can do better than this...
It’s different, like our coffee
What could Starbucks’
Third Space look like?
“Break time” from your inbox. Space from social networks.
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
Three axes of content...
Personalize customers’ experiences
1
Length of Media
Headline Summary Commentary Long Form
Espresso
Tall
Grande
Venti
2
Personalization
Different flavours of content for different customers
3
Amount of
Starbucks input
As published With comments Full commentary Editorial Feature
Curate content for
Starbucks Card members
Move the loyalty program beyond “points and plastic”
Leverage Starbucks’
“Third Space”
as a platform
Use Starbucks Card profiles elsewhere on the web.
Sign in with Starbucks
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
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).
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
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
Starbucks then
becomes a viable,
potent competitor to...
... and coffee shops, of course
Should Starbucks
build a platform
... or buy a platform?
Partner or acquire with people who are “nearly there”
Unlike Starbucks,
publishers struggle
with the “third space”
Editors make decisions, not readers
No one reads The New York Times cover to cover
Publishers can’t
offer a personalized
experience
Sending eyeballs away = sending revenue away
Publishers are
afraid of curation.
It contradicts their
business model.
...but this isn’t
Starbucks’
business model
Starbucks is in media, not in the media business
The kinds of platforms Starbucks should acquire
Internet success
+
No huge business model
=
Awesome target
Partners and
acquisition targets
Curators
Creators
Media Companies
Flipboard  |  NextDraft
Medium | Svtble | Quora
Advance Publications Inc.
A Seattle
entrepreneur who
understands media
In summary…
The
Third
Space
Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
Starbucks
Digital Network
Online experience
How to pitch this to
CEO, Howard Schultz
Explain you can’t
buy attention
forever
1
Attention is fragmented and fragmenting
Starbucks can’t
depend on other
party platforms like
Facebook in the
long term
2
Own your own audience
Starbucks is perfectly
placed to dominate
online media
3
Media companies desperately need partners
like Starbucks to survive
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.
Create an ongoing
source of signups for
Starbucks Card
5
More signups   more engaged customers   more direct sales
What’s the smallest
first step for
Starbucks?
A to Z starts with A to B.
Test the assumption that
Starbucks customers will
consume personalized content
with an email newsletter
Validated Ideas > Untested Ideas
Pay for one editor to
curate content for a
specific subject
Arm them with tools such as Spundge and Mention.net
Pull up subscribers
through social and
in-store channels
Email existing customers
and Starbucks Card
members to drive
subscriptions
Write and send out custom
email newsletters for
different interest groups
Understand why
existing newsletters
do incredibly well
http://www.brainpickings.org/index.
php/2011/06/21/best-daily-email-newsletters/
Compare the level of
engagement in the
newsletters to existing
social channels
… then, if there is a
true market fit, build
or buy a platform
to create the Third
Space Online
Starbucks has aced
individual channels...
Social Media
Starbucks Card
Audience and attention
Identity + Location + Credit Card
Starbucks
Digital Network
Online experience
...now it’s time to
combine and conquer
brought to you by
distilled.net
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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