Brand Autopsy

WOM Knowledge Nugget

From Hugh MacLeod's twitter missives, I read something that the marketer in you should also read. Word of Mouth isn't created by marketers, it is co-created with consumers. Right on Hugh, right on.

Advice from Eddie Lampert

Fortune’s latest issue shares “The Best Advice I Ever Got” from a cadre of business muckety-mucks. Lots of good advice from the likes of Michael Bloomberg, Nelson Peltz. Craig Newmark, Tina Fey, and Indra Nooyi. I especially liked the advice from Eddie Lampert, hedge fund head man and Sears chairman ...

"Almost every weekend when I was 7, 8, 9, 10 years old, my father and I would toss a football in the yard or play basketball in the driveway. When we played football, he'd say, "Go out ten steps. Turn to your right." The ball would reach me just before I turned, and it would hit me right in the chest. Why would my dad do this? He told me, "If I waited for you to turn, you and the defensive player would have an equal chance to get the ball. Your opportunity is gone."

This idea of anticipation is key to investing and to business generally. You can't wait for an opportunity to become obvious. You have to think, "Here's what other people and companies have done under certain circumstances. Now, under these new circumstances, how is this management likely to behave?" The plays my father designed for me helped me learn to think ahead." -- Eddie Lampert [source]

Steve Yastrow on the WE Relationship

I love the premise from Steve Yastrow’s recently-published book, WE: The Ideal Customer Relationship. In the opening chapter, Yastrow writes …

Relationships have become powerful differentiators. Customers can’t tell if your product is better than your competitor’s product, but they can tell if they have a better relationship with you than with your competitor.

If relationships are such powerful differentiators, what is the most productive, profitable, and sustainable relationship?

The We relationship.

In a We relationship, you think less about what separates you and more about what intertwines you.

In contrast, if your customer’s view of your relationship is not “We” but “Us & Them,” he will focus more on what he can get from you—and on what he believes you get from him—and less on how you can collaborate to reach your goals together. [Steve Yastrow, SOURCE]

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For those needing to see this premise in a chart, peep the following from pg. 13 of WE: The Ideal Customer Relationship ...

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Learn more about Steve Yastrow and get yourself a copy of WE.

New Guru Review

Four years ago I linked to an article titled, GURU NATION. The article shed light on the Business Guru Scene from the egos to the economics of it all. Interesting read.

The Wall Street Journal has revisited the Guru Scene for 2008. This updated look reflects a change where more non-traditional business experts are in greater demand. Journalists like Thomas Friedman (#2) and Malcolm Gladwell (#4) rank high as does education professor, Howard Gardner (#5). According to the article, the most popular topics for these business gurus include: globalization, motivation ,and innovation. Here's the list...

This list was compiled by two Babson College professors and is based upon the number of online mentions, academic citations, and LexisNexis media mentions. It’s not a truly scientific list, but it is an interesting list.

Adding to the interest is the absence of women in the top 20 rankings. Wendy Bounds, from the Wall Street Journal, asked readers for their take on why women are absent from the list … the conversation is worth reading.

Today's Time Waster

From AdFreak, by way of Nerve.com ... a collection of 50 top-notch commercial parodies from Saturday Night Live, SCTV, In Living Color, Chappelle's Show, and MADtv. Good stuff. Click below:

** "Click me," said the jpeg. **

Wii WOM

The Wall Street Journal recently ran an interview with Cammie Dunaway, Nintendo EVP of Sales & Marketing. The interview focused on the marketing strategies behind the U.S. introduction of Wii Fit, a gaming system designed to get people in game shape.

Cammie Dunaway explains there will be TV, Radio, and OOH advertising to support the launch but ... Nintendo is focusing much of its marketing attention on “public relations” efforts to get regular people to do the marketing for Wii Fit.

Cammie is a firm believer in the power of Word-of-Mouth (WOM) as a credible and effective marketing strategy. In the interview she doesn’t say anything earth-shattering new about WOM. Nevertheless, her sound-bites might give you some ammo in championing (or defending) Word-of-Mouth within your company.

WSJ: Videogame advertising has long been dominated by glitzy TV ads, yet the largest part of this advertising and marketing campaign will be the public-relations effort. Why?

Ms. Dunaway: "What we see is consumers are increasingly turning to friends, family and news articles as credible sources of information about products, more so than in the past."

WSJ: Why?

Ms. Dunaway: "It is because consumers are getting much smarter, because they have better access to information and they are able to share information online. They are bombarded with advertising messages -- so they have more tools to avoid that advertising today."

Starbucks Slows U.S. Growth

WHAT
Net income for Q2 2008 at Starbucks fell by $42-million compared to the same quarter last year. (Ouch.) Additionally, Starbucks is drastically reducing the number of new store openings in the U.S. Starbucks opened nearly 1,800 locations in 2007. For 2008 the company will open only 1,175 new locations — that’s a 35% reduction in new store openings from the prior year. And, beginning in 2009 through 2011, Starbucks will limit new store openings to only 400 per year.

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SO WHAT
Clearly the company is experiencing growth troubles in the U.S. However, Starbucks is hoping to offset the slower domestic growth with greater international growth. Starbucks is set to open up anywhere from 1,050 to 1,300 new international locations each year through 2011.

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WHAT NOW
Have a listen to this interesting story on Starbucks from NPR’s Morning Edition. (Skip to the 3:10 mark in the story for a surprise.)

Would you miss UPS?

Continuing my “Would you Miss” series ...

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Does UPS (United Parcel Service) provide such a unique service and customer experience that we would be saddened if it didn’t exist? Does UPS treat its employees so astonishingly well that those workers would not be able to find another employer to treat them as well? Does UPS forge such unfailing emotional connections with its customers that they would fail to find another shipping company that could forge just as strong an emotional bond?

What say you?

Post inspiration | Mavericks at Work

Gravitate to the Physics of Marketing

David Bowman riffs smartly on how some brands have gravitational pull while others don't ... all reasoned in the context of Newton's Law of Gravity.

Good stuff ... READ MORE.

Digging Inside Steve’s Brain

If you’re following me on Twitter, then you know I’m reading Leander Kahney’s newest Apple-related book … INSIDE STEVE’S BRAIN. It’s a worthy read.

Lots have been written about Steve Jobs and Apple. Kahney’s book, though, runs the full gamut on sharing the business mindset that drives Jobs and drives Apple to succeed. You’ll learn insights into developing new products, designing the customer experience, fostering an innovation spirit, hiring top talent, and sharing passion to “… put a ding in the universe.”

I judge the worthiness (and worthlessness) of business book on three factors: IDEATION (helps me generate new ideas), INTELLECTION (gives me a new perspective on a business topic) and MAXIMIZATION (increases my current understanding of a business topic). INSIDE STEVE’S BRAIN ranked high for me on all three factors. That’s why it’s a worthy read.

Sample some of INSIDE STEVE'S BRAIN through these tasty Money Quotes…

| View | Upload your own

RSS Readers ... click here to read the Money Quotes

193 Creative Marketing Ideas

Looking for crafty marketing ideas? Consider riffling through Sam Decker's list of 193 Creative Marketing Ideas. You're sure to find some worthwhile guerrilla-ish ideas in Sam's lengthy list.

And, while you're in the guerrilla marketing mindset ... read Sam's snappy answers to nine marketing questions. Smart stuff.

Piano. Airport. Food Court.

We've come to expect live piano playing at Nordstrom ... but an airport? In the Food Court? That's exactly what I experienced in Terminal E of the Atlanta International Airport. Remarkable!

RSS Readers ... watch video here

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UPDATED: The pianist in the video, Michael B, received the Hartsfield-Jackson Customer Service Recognition Award last year for helping to soothe the travel weary with his food court piano playing. Learn more about Michael B on his website.

Recent Reads

ONE | Mommy Mixer
Picture a roomful of Moms with a flock of Nannies and there you have a Mommy Mixer. This is a remarkable business where Moms gather to meet, greet, and interview potential Nannies for their children. Learn about the Mommy Mixer story here and check out MommyMixer.com.

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TWO | Ping-Pong as Mind Game
Little known fact about me … in my teens I played lots of table tennis. LOTS. I was infatuated with the game. Practiced and played all the time until I became pretty good. Wicked serves, strong backhand defense, and one hella forehand slam. Given that … I thoroughly enjoyed this article about Ping-Pong as Mind-Game. I also enjoyed this article because I learned puzzle master Will Shortz is a competitive table tennis player. (My Mom was an avid crossword puzzler and a Will Shortz devotee. So nice to think of my Mom when I read that article.) >> READ MORE

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THREE | The Evil Genius of Apple
Leander Kahney has written a provocative article—How Apple Got Everything Right by Doing Everything Wrong. In today’s open source transparent co-creation business culture, Apple is the antithesis. Apple is opaque. Apple favors closed platforms. Apple doesn’t actively solicit feedback from its fans. Yet, the company succeeds. Interesting read. And, Scott Berkun’s rebuttal is also an interesting read.

The Internet is your Marketing Department

“Right now, your customers are writing about your products on blogs and recutting your commercials on YouTube. They’re defining you on Wikipedia and ganging up on you in social networking sites like Facebook. These are all elements of a social phenomenon — the groundswell — that has created a permanent, long-lasting shift in the way the world works.”

GROUNDSWELL (Charlene Li & Josh Bernoff)

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If you are reading this blog then you have a clue about the Groundswell that Charlene & Josh detail in GROUNDSWELL. Others you know in the office are probably clueless about this Groundswell. They have no clue about the power to be unleashed from embracing the Groundswell. They do not realize the Internet is your marketing department.

GROUNDSWELL is the definitive guide to what is happening now in the citizen marketer online world we live, work, and frolic in. You’ll learn about the online tools people use and the motivations for why people participate in the Groundswell. You’ll also gain access to previously super-spendy analysis reserved for Forrester clients … such as … ROI of an Executive Blog, ROI of Online Ratings/Reviews, and ROI of Online Community Forums.

Charlene & Josh refresh some of their smartest blog posts in GROUNDSWELL. They’ve written about the Social Technographics ladder before, but the updated analysis in the book will help you better understand the motivations and activities of consumers today. And, their easy-to-understand P.O.S.T strategy to participating in the Groundswell will help many in demystifying how to get started using online media to connect with customers.

GROUNDSWELL is must-read material for all Marketing Managers and Marketing Directors who want to use the power of the Internet as an extension of their marketing department.

[Prerequisite reading includes: THE CORPORATE BLOGGING BOOK (Debbie Weil) and CITIZEN MARKETERS (McConnell & Huba).]

Master Your Domain

It’s not about vanity when registering your personal name as an Internet domain. It’s simply a cheap way to protect personal real estate.

Let this wretched conversation saga be your CALL TO ACTION to register your name as a website address.

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(Note: I was way too late to register JohnMoore.com. Also too late to register JohnHMoore. I have registered JohnHardinMoore.com.)

Would you Miss Pizza Hut?

Continuing my “Would you Miss” series ...

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Does Pizza Hut provide such a unique product and customer experience that we would be saddened if it didn’t exist? Does Pizza Hut treat its employees so astonishingly well that those workers would not be able to find another employer to treat them as well? Does Pizza Hut forge such unfailing emotional connections with its customers that they would fail to find another pizza joint that could forge just as strong an emotional bond?

What say you?

Post inspiration | Mavericks at Work

Pitching Whole Foods Market

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In a recent article, Brandweek’s Becky Ebenkamp demystifies the difficult process of gaining distribution into Whole Foods Market stores. It’s not easy. Yet, many upstart brands see distribution within Whole Foods as their company’s best hope for success.

These brands want to follow in the footsteps of once upstarts like Odwalla, Honest Tea, Nature’s Path, and Stonyfield Farm. These businesses all became well-known national brands thanks, in large part, to getting on the shelves at Whole Foods Market.

Becky shares smart insights on approaching Whole Foods to gain a distribution deal. Entrepreneurs read up. Highlights include…

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First and foremost, a product has to meet Whole Foods' definition of clean. Passing the sell test doesn't just mean having the right ingredients, it means being free of the wrong ones, ranging from aspartame to vanillin. (The full, unappetizing list of 80 verboten ingredients can be found at the company's Web site.)

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Generally speaking, Whole Foods' buyers aren't impressed by traditional sales tactics. "Don't go in there trying to be slick like some classic corporate packaged goods company would; that just turns them off," warned former Whole Foods director of national marketing John Moore, who later founded Brand Autopsy, an Austin-based marketing consultancy. "Don't try to wow them with a snazzy PowerPoint presentation. Wow them with a snazzy product."

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"Everybody wants to walk into Austin [headquarters], have a meeting with a buyer and get placement within every region," said former Whole Foods Northeastern area grocery director Tim Sperry, who's since gone on to found Wellesley, Mass.-based Sperry Group. "You need to have patience and a longer view. It might mean you start on a coast and work your way through. If you're a small company and you want to get your feet wet, going one store at a time is an option."

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Uniquely, the company empowers its stores and employees to make decisions for what products they carry, Moore said. "Many times folks will try to appeal to national [buyers], but in reality, this is a company that works better on best practices," he said. "If a region sees a product sells well somewhere else, they're going to want to get that product in their stores."

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While many national grocery chains will buy either nationally or regionally, Whole Foods does both—and combinations of both. A brand rep can start his pitching at the local store, but it's also possible to jump in on the regional level or (in rare cases, such as that of Stonyfield Farm organic yogurt) get a national contract right off the bat.

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Yet dealing with the regional buyers can induce plenty of headaches, too. Granted, the ability to start local lets smaller companies get in a door that more centralized, corporate chains might slam in their faces. However, the micromanagement of relationships with multiple managers is time-consuming and expensive.

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SOURCE | Brandweek article | March 24, 2008

a Tuesday Time Waster

As a kid I read lots of MAD magazines and the backpage fold-in was always something I looked forward to doing. Can't say I understood everything contained in the fold-in ... it was just fun for a curious kid to do.

The NY Times recently ran an interesting story on Al Jaffee, the mastermind behind the fold-in. Since its first appearance in the April 1964 issue of Mad magazine, the 87 year-old Al Jaffee has drawn every one of these backpage fold-ins. WOW!

Take a few minutes this Tuesday and rekindle your MAD magazine fold-in memories with this wicked cool digital gallery.

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Feedback to your Feedback

Thanks for the feedback on topics you’d like to read MORE OF, LESS OF, and/or NONE OF on the Brand Autopsy blog. (And thanks for all the kind words.)

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It’s clear you want me to continue sharing whatever intrigues me.
Cool. Will do. Blogging as usual.

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More book reviews and a return to my Worthy/Worthless Reads postings is good feedback to know.
Book reviews are a little tricky for me. In the past, before I became a biz book author, I would highlight worthless business books. I stopped sharing my strong opinions on bad biz books because of karma issues. (You know … what comes around goes around.) Instead, I’ve focused my time on sharing “Money Quotes” from interesting business books with the occasional in-depth look at a worthwhile biz book. Look for a Biz Book Round-Up posting in the summer where I’ll return to listing worthwhile reads and worthless reads.

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Feelings were mixed about sharing my insights into Starbucks happenings. Some say more, some say no more.
This blog has seen over 1,055 posts and 90 of them have been focused primarily on Starbucks. So, 8.5% of all my posts have a strong Starbucks bent. I have no plans to stop talking about Starbucks here. However, I will be judicious and pick my spots to riff on Starbucks. Deal?

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More “Would You Miss” postings.
Great. I love these posts because your comments are always interesting. I hope marketing managers from companies like Chili’s, Walgreen’s, Sears, and Subaru have read your insightful comments. There’s lots of chewy marketing nuggets to mine from your insights. (Ha! Couldn't resist. Sorry Mr. Hall.) This series of posts will continue.

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Some of you want me to highlight other industries besides my heavy focus on retail brands.
I’m passionate about the retail marketing world and that’s why I write a lot about it. My passion for other industries and B2B businesses is limited. Other bloggers fill this void better than I ever could. I’ll keep my eyes/ears open for interesting articles/insights into areas beyond retail marketing. If something intrigues me, I’ll share it here.

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Thanks again for your comments. It’s nice to get a pulse check.

Seeking Feedback from YOU

There wasn’t a master plan behind the Brand Autopsy blog when it began in December 2003. This website was simply a way for me to share some HMOs (hot marketing opinions) and links to interesting goings-on in the marketing world.

In doing this blog, I quickly learned the more I shared, the more I learned. Thus, I kept at it ... sharing more and learning more.

I have no desire to stop blogging. However, I do have a desire to get feedback from you about the Brand Autopsy blog.

Let me know what you would like to read MORE OF, LESS OF, and/or NONE OF.

Yeah, I write a lot about Starbucks Coffee and Whole Foods Market. (Can't help it.) I also write about Business Books, along with miscellaneous musings on Business Strategy and Marketing Strategy. Of these areas I write about, what do you want to read MORE OF, LESS OF, and/or NONE OF.

The comments section is open … have at it. I’m listening and will respond when I return from a short blogging vacation.

Five Biz Book Excerpts of Note

1 | GROUNDSWELL (Charlene Li & Josh Bernoff) is about to be published. An excerpt is now available.

2 | GOOD IN A ROOM (Stephanie Palmer) was just published, read an excerpt here.

3 | BOUNCE! (Barry Moltz) is on bookshelves and on my reading list. Excerpt? Ya sure, you betcha.

4 | STOPWATCH MARKETING (John Rosen & AnnaMaria Turano) is also newly released. Sample some of it with what else ... another excerpt (.pdf).

5 | PIRATE'S DILEMMA ... yeah, I've already raved about it. This interview with Matt Mason is worth reading too.

Monday Morning Quarterbacking

Nathan Snell runs the social media voodoo down with smart analysis of MyStarbucksIdea.com. And when you read Shel Holtz's take on how Starbucks mirrors Dell, be sure to read the comments where Caroline Dietz from Dell provides clarification.

My Starbucks Idea

In the comments section, a former long-time Starbucks partner questions just how much the MyStarbucksIdea.com website will engage readers and engage Starbucks. ”Pat’s" comments got me thinking more about Starbucks social media strategy. Below is my reply to "Pat" …

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Pat … I’m also not sold on Starbucks jumping into the deep end of the social media waters. The company has no meaningful experience in social media and has always shunned participating in online conversations.

Instead of opening the customer suggestion box floodgate, which is exactly what MyStarbucksIdea is, I would have started by taking a much smaller step and simply layered on a blog-like component to their existing website. On this proposed company blog, Starbucks could ask customers focused questions about their ideas on improving various aspects of the Starbucks business.

For example, a potential Starbucks blog post could read something like…

”As you’ve heard, we are discontinuing our oven-heated breakfast sandwiches. This doesn’t mean we are exiting the breakfast business. It does mean we are looking for morning food ideas that customers will enjoy more. I’m sure you have ideas on what food we should offer in the morning. Please share. We are listening.”

Another potential Starbucks blog post could say …

”When we launched the Starbucks Card in 2001, we had no idea it would be accepted by so many of our customers. 15% of you purchase all your Starbucks stuff on the Card. That’s amazing! Thank you. We want to “thank” Starbucks Card users even more. Please share your ideas on how we can reward you for your continued devotion to Starbucks.”

The company could reply to customer suggestions to these focused questions in the comments section. Starbucks could do a weekly round-up of the most popular ideas and post updates on which ideas are moving forward.

This focused approach to (a) participating in social media and (b) gathering customer suggestions would be easier for a company with no meaningful social media experience to manage. It would also make it easier for Starbucks customers to follow-along. The current MyStarbucksIdea website is already unwieldy — lots of wayward ideas have been suggested and many of the ideas suggested are repeated numerous times in various categories. This website will only get more unwieldy.

A more focused approach to participating in the social media waters would probably have been a better path for Starbucks to undertake.

johnmoore (from Brand Autopsy)

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Clover Brewer video

A friend pointed me to some interesting videos showing the Clover Brewer in action. (Thanks Mr. Garraway.)

Turns out there is a coffee shop in Austin that uses one -- J.P.'s Java. (I feel a field trip coming on.)

If you have no idea why I am blogging this, read this.

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Starbucks Transformational Agenda

Since I have lots of HMOs (hot marketing opinions) about Starbucks, reckon I should share my take on today’s major goings-on with the company. Since there’s lots to talk about, I’ve arranged my thoughts in a “WHAT | SO WHAT | WHAT TO THINK” format.

** WARNING … LONG POST **

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WHAT?
At its 2008 Shareholders Meeting, Starbucks announced six initiatives designed to: (a) improve the current state of its U.S. business, (b) reignite the emotional connection with customers, and (c) invest for long-term success.

The six initiatives are:
1 | New Espresso Machines
2 | Ethically-Sourced Coffees
3 | A Social Media Strategy
4 | A Customer Rewards Program
5 | Improved Brewed Coffee
6 | Acquisition of the Clover Brewing machine

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SO WHAT?
1 | New Espresso Machines
Starbucks will phase out its current automated espresso machine, known as the Verisimo, for a higher-quality automated machine. The new Mastrena machine is also an automated machine, but Starbucks believes the quality of espresso and steamed milk is superior to that of their current machine. Starbucks plans to have the Mastreno in 30% of U.S. locations by the end of 2008 and in 70% of U.S. locations by 2010.

2 | Ethically Sourced Coffees
Starbucks will further its relationship with Conservation International in a variety of ways. Customers will notice this relationship with a certification seal on select coffees judged to have been grown and sourced using stringent standards. By the end of 2009, every Starbucks espresso drink prepared around the world will be used with coffee beans certified by Conservation International as being ethically grown and sourced.

3 | Social Media Strategy
Starbucks is following the lead of companies like Dell by introducing a website where customers can submit their ideas on how Starbucks can improve its business. MyStarbucksIdea.com is the company’s first meaningful foray into social media. Howard Schultz will blog here and 48 Starbucks employees will be assigned to engage in conversations with customers on the website.

4 | Customer Rewards Program
Customers with registered Starbucks Cards will able to receive free syrups and free milk options (soy, half & half) when they order espresso drinks. In other words, customers using their registered Starbucks Card will only have to pay for a Grande Latte when they order a Grande Extra Vanilla Light Hazelnut Soy Latte. (The free modifiers do not include shots of espresso.)

Additionally, Starbucks Card customers will also receive 2-hours of free daily in-store wi-fi, free refills on brewed coffee, and a free 12-oz. beverage (espresso, coffee, or Frappuccino) when they buy a pound of whole bean coffee. These are only the initial rewards Starbucks Card holders are set to receive in April. The company plans to add-on more rewards in the months to come.

5 | Improved Brewed Coffee
Starbucks is changing its policies for brewing coffee in-store. They will be brewing in smaller batches and reducing the hold time for brewed coffee from 60-minutes to 30-minutes. Plus, the company will no longer rely on pre-packaged ground coffee filter packs and instead, grind whole bean coffees in-store to brew as drip coffee. A new blend, Pike Place Roast, will be introduced and brewed as an everyday coffee.

6 | Acquisition of the Clover Brewing machine
Coffee geeks rave about the Clover Brewer and high-end coffee shops have been using the Clover Brewer to brew richer, more flavorful coffee. Starbucks has been selling brewed coffee using the Clover Brewer in selected locations in Seattle and Boston. Results of the test have been promising. So promising, Starbucks is acquiring the Coffee Equipment Company, makers of the Clover Brewer. Starbucks has plans to rollout the Clover Brewer to a limited number of locations.

UPDATE: to watch the Clover Brewer in action, click here.

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WHAT TO THINK?
We were promised to learn of transformational initiatives that would reverse the negatives trends impacting the company. We learned of six initiatives. I'm not sure how transformational these initiatives will be.

Let’s judge these transformational initiatives against the objectives Starbucks outlined at the Shareholders Meetings. Will these six ideas (a) improve the current state of its US business, (b) reignite the emotional connection with customers, and (c) invest for long-term success.

1 | New Espresso Machines
The introduction of the Mastrena espresso machine is clearly an investment for long-term success. Starbucks says they will roll-out this new machine to 30% of its U.S. locations by year’s end. We’re talking over 2,000 locations—that’s highly aggressive. Given all the issues of production, distribution, installation, and employee training, Starbucks will be fortunate to have the Mastrena espresso machine in 1,000 locations by year’s end.

Expect this new espresso machine to have little financial impact on Starbucks business in 2008. As for reigniting the emotional connection with customers … that’s hard to measure. Let’s just say friendlier Starbucks baristas will reignite the emotional connection with customers more than an espresso machine ever could.

2 | Ethically Sourced Coffees
It’ll be 2009, when espresso drinks are made with Conservation International certified coffees, before this initiative can improve Starbucks U.S. business. With customers that value environmental issues and origin country matters, this initiative will help to build a stronger emotional connection with them. I’m not sure how many Starbucks customers are emotionally-tied to such issues. However, any activity designed to be friendlier to the environment and to coffee origin countries will be a good long-term investment.

3 | Social Media Strategy
Hmm … I applaud Starbucks for diving into the social media waters. (Really, I do.) I’m just concerned they haven’t done their homework. Chris Bruzzo, Starbucks chief technology officer, made the following statement when introducing the MyStarbucksIdea.com website, “I am not aware of another organization that is investing in making this kind of a commitment to integrate customers and their ideas and their insights into the products and experiences that they develop.”

So we are to believe Starbucks is unaware of Dell’s social media activities with Direct2Dell and more importantly, IdeaStorm. Starbucks can learn a lot from what Dell has done and is doing with social media to better connect with customers.

This marks a major cultural shift within the company. Starbucks has never participated in the online conversational media. It’s not like they can flip the switch to on. Its not that easy. (Just ask Dell.)

Time will tell if Starbucks customers are engaged by this online activity. Time will also tell if Starbucks corporate culture will adapt to social media and when (or if) Starbucks will implement customer ideas. Right now the most popular customer generated idea is for the company to implement a Buy 9 Drinks Get 1 Free punch card. That’s a marketing activity the company abolished a long time ago. How will Starbucks respond now?

4 | A Customer Rewards Program
Clearly, Starbucks is seeking to drive sales by getting current customers to buy more, more often. Offering Starbucks Card customers free syrups and free refills is just the first step in what looks to be a more involved “loyalty program.” This has the potential to drive sales in 2008 and to reignite the connection with customers. The future is a different story. Once Starbucks heads down the path of offering customers discounts, they will have a hard time ever reversing course.

5 | Improved Brewed Coffee
The vast majority of beverage sales at Starbucks, as measured by total dollars, come from espresso drinks, not brewed coffee. Improving their brewed coffee policies is a positive move that the company should have made years ago. Will these changes, including the introduction of Pike Place Roast as an everyday coffee, move the sales needle? No. Improve the emotional connection with customers? No. Be a sound investment for the future? Yes.

6 | Acquisition of the Clover Brewing machine
These new high-end brewers will only impact a small number of stores. Since these brewers make single cups of coffee on-demand, volume selling of drip coffee will not be possible. The Clover brewer will not have an immediate impact on sales in 2008. It does have the potential to impact the future business of Starbucks. Because this appeals to only coffee connoisseurs, I’m not convinced the typical Starbucks customer will care.

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Where do we stand? Let’s take a look at the Transformational Agenda Scorecard…

It appears these six initiatives will have an impact on the long-term Starbucks business, but the short-term impact is minimal. That’s my take. What’s yours?

And yes, I do need to get a life.

Knowledge Nuggets from Steve Jobs

The March 17th issue of Fortune magazine has a "Good Steve | Bad Steve" take on Steve Jobs. The Good Steve article has chewy knowledge nuggets from him on being innovative, connecting with consumers, staying focused, managing people, and hiring talented people. Good stuff.

on being innovative…
"You can't ask people what they want if it's around the next corner," says Steve Jobs, Apple's CEO and cofounder. At Apple, new-product development starts in the gut and gets hatched in rolling conversations that go something like this: What do we hate? (Our cellphones.) What do we have the technology to make? (A cellphone with a Mac inside.) What would we like to own? (You guessed it, an iPhone.) "One of the keys to Apple is that we build products that really turn us on," says Jobs.

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on connecting with consumers…
"It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do.” [MORE]

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on staying focused…
”People think focus means saying yes to the thing you’ve go to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully.” [MORE]

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on managing people…
“We've got 25,000 people at Apple. About 10,000 of them are in the stores. And my job is to work with sort of the top 100 people, that's what I do. So when a good idea comes … part of my job is to move it around, just see what different people think, get people talking about it, argue with people about it, get ideas moving among that group of 100 people.” [MORE]

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on hiring talented people…
"When I hire somebody really senior, competence is the ante. They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple? Because if they fall in love with Apple, everything else will take care of itself. They'll want to do what's best for Apple, not what's best for them.” [MORE]

Would you miss Walgreens?

Continuing my “Would you Miss” series ...

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Does Walgreens provide such a unique product and customer experience that we would be saddened if it didn’t exist? Does Walgreens treat its employees so astonishingly well that those workers would not be able to find another employer to treat them as well? Does Walgreens forge such unfailing emotional connections with its customers that they would fail to find another retailer that could forge just as strong an emotional bond?

What say you?

Post inspiration | Mavericks at Work

Learn the History...

Borders Reducing its Borders

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Bookstores merchandise most books with the spine facing out. Only new releases and best-sellers get the front-face treatment. Merchandising books with the spine facing out allows the retailer to stock more books. However, front-facing books gives a book greater visibility and results in higher sales.

Borders recently tested a front-facing display strategy where more books were stocked with their covers, not spines, facing customers. Sales increased by 9.0%. The strategy was so successful, all Borders bookstores will be switching to the front-facing strategy in the next couple of weeks.

The drawback to a front-facing strategy is Borders will have to reduce its inventory by 5%-10%. This means the typical Borders store will reduce its inventory anywhere from 4,700 books to 9,300 books. Execs at Borders aren’t too concerned about the loss of inventory since many of the books they stock only sell one copy per year.

On the other hand, Barnes & Noble has no intentions of reducing its inventory of books. (The typical Barnes & Noble stocks 125,000 to 150,000 at its stores.)

Borders did some customer research at its front-facing prototype store and learned customers perceived Borders as having more books, not fewer, with this new display strategy. (Interesting.)

Bold move by Borders. We’ll have to see if this works in the short-term AND the long-term.

FOR MORE: Read this Wall Street Journal article.

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FOR EVEN MORE: Seth Godin riffs on how Borders strategy is counter to the Long Tail. Joe Wikert, an executive at book publisher Wiley, fears customers will leave empty-handed because of the reduced inventory.

OUTSMART!

I’m doling out more Money Quotes with a few sharp lines from Jim Champy’s just-published book, OUTSMART!: How to Do What Your Competitor’s Can’t. These quotes share Jim’s thinking on how growth businesses outsmart incumbent businesses. Enjoy.

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