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February 05, 2008

Howard Schultz Must Blog

As we know, Howard Schultz has returned as CEO at Starbucks.  He’s committed to fixing the “unintended consequences” caused by growing its store footprint at a rapid pace.  Such unintended consequences have included losing the company’s identity and the dilution of the unique customer experience Starbucks once delivered.  Howard has also pledged to refocus the company on growing its relationships with customers.

Writing in the Huffington Post, Jesse Kornbluth raises a valid point,

“It's interesting that Schultz professes to love Starbucks customers but has no apparent interest in hearing from us. How's that, Howard? You're going to thrill us without getting our input? Do you really think focus groups, consumer research and executive offsites will tell you what you need to know? What, exactly, do you think the Starbucks website is for?”

Jesse is onto something when he writes, “Schultz professes to love Starbucks customers but has no apparent interest in hearing from us.”

As evidence by their lack of participation, we know Starbucks, as a company, has refused to blog and refuses to participate in online conversations.  The Starbucks Gossip blog is all the proof the company needs to know that people want Starbucks to join the online conversation.  Yet, the company refuses to have a conversation with its customers (and employees) online.

Clearly, Starbucks was ahead of the curve with tapping into satisfying the consumer need of a Third Place—a place besides home and work where people could form community.  But consumers have evolved from needing a Third Place to needing a Third Space.  This Third Space includes social media spaces like blogs, vlogs, podcasts, Twitter, and many more. These are spaces where meaningful online communities are forming.

Now that the company recognizes it needs to improve its relationships with customers to improve the health of its business, maybe Starbucks will consider blogging.

Better yet, given Howard Schultz’s pledge to growing the company's relationships with customers, he should blog.  He should give us, the 50+ million Starbucks customers who visit his stores weekly, updates on how his company is making the necessarily changes to follow his vision for reclaiming the Starbucks luster. 

Howard recently told Wall Street analysts that, since returning as CEO, he has received thousands of emails from customers and employees who share his enthusiasm for reigniting the emotional attachment people have with the Starbucks brand.  With a blog, just imagine how many more messages Howard would receive from adoring customers and employees who want to see the company succeed.

Howard has always talked about growing his company to get bigger by acting smaller.  And a blog, or some other social media avenue, is the perfect tool to help big companies get smaller in customer’s eyes.  Other CEO blogs like Jonathan Schwartz’s blog and Bob Lutz’s blog have helped to make Sun Microsystems and General Motors, both goliath companies, get smaller in the eyes of customers.  And thanks to encouraging its employees to blog, companies like Microsoft look less pervasive and less evil in the eyes of customers. 

Can you imagine the conversations that would occur if Howard Schultz used the Starbucks website to regularly share updates on how his company is bringing back the old Starbucks juju?  I’m sure many of the Starbucks faithful would be thrilled to read impassioned updates from Howard.  I'm also sure Howard would receive pointed feedback (and yes, un-pointed feedback too) on activities the company should stop doing, start doing, and/or continue doing.

Unfortunately, the Starbucks corporate culture doesn’t sync with social media.  My experience of working deep inside the company tells me Starbucks is extremely careful in how they are portrayed in the traditional media.  They want to be in control of the conversation in the media as much as possible.  Since Starbucks is cautious about how traditional media portrays the company, then no way will Starbucks be comfortable playing in the non-traditional untamed waters of social media.  Do I think this is right?  Absolutely not!

Starbucks helped to popularize the “New Marketing” ethos of spending marketing dollars on making better customer experiences and not on making extravagant advertising campaigns.  In essence, Starbucks baked marketing inside its business.  It didn’t have to advertise because everything about the in-store Starbucks experience was the advertising.

Starbucks still operates under this “New Marketing” ethos but the game has evolved dramatically.  A “NOW MARKETING” movement has emerged and Starbucks hasn’t kept up.  This “NOW MARKETING” ethos is the realization of the prophetic Cluetrain Manifesto where the Internet has changed how customers expect to interact with businesses.  As the Cluetrain writers explain:

"A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies."

In growing its business, Starbucks has always operated under the guidance of “Be everywhere its customers expect them to be.”  This is the rationale for why the company began serving its coffee on United Airlines, expanding Internationally, operating licensed concept locations in airports, selling cold bottled coffee in convenience stores, selling whole bean coffee in grocery stores, etc.

Customers today have a new expectation. 

Customers now expect Starbucks, and other businesses, to engage in conversations with them wherever and whenever.  Be it in the Third Place or the Third Space, customers want to interact with businesses they love.  By being active in the Third Space online, companies show their love for customers by being open to having a conversation with them. 

If Howard Schultz really loves his 50+million weekly customers, he would show it by evolving his company’s culture to adopt the “NOW MARKETING” movement.  If Howard Schultz really loves Starbucks customers, he must blog.  He must carry on a conversation with us.


UPDATE:  This blog post has been simmering within me for a few weeks.  After hitting the publish button, I ventured over to the Starbucks.com site and hidden in the bottom right-hand corner is a "Howard Schultz Partner Update" link.  This particular update is titled. "What I Know to Be True."  Interesting.  Seems like Howard is using the company website to share his impassioned updates with customers and employees.

Also posted are are transcripts of voicemails to stores regarding the work ahead of the company. 

Of course, it would be better if Starbucks were to open up the conversation, allow comments from readers, and commit to making this an on-going feature.  That way, Starbucks would be embracing the "NOW MARKETING" movement we have come to expect from businesses we adore.

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Comments

For the record, Microsoft looks just as evil as ever.

I totally agree. I think blogs allow customers to connect with businesses in a way that keeps them coming back. Who wants to do business with someone who doesn't listen them but takes their money.

Although Starbucks sells over 300 items, their brand is simple, coffee. (Posted on this blog at an earlier time.) I think a "third place," the coffee shop, is an important subset of coffee. I'm really stretching to believe that it is important to me, a coffee drinker, to hear the running conversation of the coffee shop's CEO. I'm trying to picture in my mind how expanding his influence digitally, an intellectual experience, is going to make my coffee drinking experience, a sensual experience, better. Hmmmm. It is challenging, but I suspect it can be done and I'm anxious to see the result.

Yes ... the reason Starbucks exists is to sell a tasty up of coffee. However, in doing that, customers have formed "community" within their stores over the coffee they sell. And, because people enjoy the coffee and the community, they associate themselves with the Starbucks brand. That association has formed a relationship that many people want to continue in Third Space social media ways. That's why I believe Starbucks could benefit by having Howard Schultz update the "Starbucks Community" on what's being done to rekindle the love.

John,

Have to agree with you, especially about the Third Space. The whole problem of Starbucks overexpanding isn't new and I've had more than my share of unpleasant experiences at outlets. Instead of a simple email reply, a forum where employees can reply (I don't even need it to beHoward Schultz), would be so much more beneficial for Starbucks.

John... the company has a "private" blog known as My Partner Career... with security protocols using the partner number... unfortunately, it's so devoid of personality that nobody will put anything there. Your post is dead on... this needs to happen and the growing numbers of partners venturing to the Green Apron Book forum is minor proof of this. Partners WANT to connect with other partners and people from the company... they're desperate for connection.

Oh... and Starbucksgossip has been blocked from the company network...btw

I agree with jnavarre on this one. I'm not too sure how important it is for Starbucks to blog. Coffee is such a low-involvement purchase I'm not too sure that consumers care to read the thoughts or the backstory behind a company they purchase from.

What might be better is for a Starbucks blog not to focus on consumers, perhaps a blog for it's shareholders, staff or suppliers? Surely these groups have a greater involvement with the product?

Saying that, joining in debates about the 'third space' rather than coffee would certainly be interesting. Will it be interesting enough for consumers though?

"Pat Nerr" ... nice insights, thanks. To block access of a viable, albeit noisy, feedback channel like StarbucksGossip is further proof Starbucks is pretending the "NOW MARKETING" conversation doesn't exist.

I just read the article in today's WSJ on page B4D about Peet's Coffee & Tea company. Peet's founder advised Starbucks founders when they opened in Seattle in 1971. Peet's was bought by Starbucks' 3 founders in 1984. In 1987, 2 of them sold Starbucks to Shultz, kept Peet's, and went public in '01)). Why is this interesting? Peet's has found its profit in coffee quailty and wholesaling its beans, not coffee shops. Peet's retail sales represent 2/3s of its sales but only 20% of its profits. Even if Starbucks was tempted to toy with its strategy, in a bricks and mortar way, whatever that might be, to become profitable again, that would probably be a wrong move. They have to do something different. So yeah, on second thought, I see it now, there's lots of room in the third space, and if Starbuckers want a conversation with the CEO of their coffee shoppe, they should get it. The customer speaks. Howard Shultz must blog.

John... I agree. They're reacting out of fear. The "challenge" with that method is that your employees take their conversations outside and you (the company) no longer have a view of the conversation going on. Once the employee takes the conversation outside it could go anywhere and from what I've seen it isn't usually a positive place.

In my experience, you're far better off to continue the discussion with disenchanted employees and listen to them... try to win them... and also further feed your enchanted employees by continuing to enagage them and connect with them. Fear is no way to live...

I don't agree that the Starbucks brand is coffee. The Starbucks brand is experience, it's the ritual of leaving the office and heading to the coffee shop for a break, it's the familiarity of a comfortable brand whereever you go. And $4 once or twice a day for coffee quickly turns into not such a low-involvement purchase after all, as popular financial advice types have pointed out.

The Starbucks brand is all about relevance and "getting it," and as such, John's right--they *have* to blog. Letting GE be hipper than Starbucks (leaving aside for a moment that GE was a true social media pioneer with the GEnie forums) should be unthinkable.

Just wrote up my own post based on this and your other Starbucks content. I'd be interested in hearing your thoughts on it.

Like Sonia Simone, I disagree with jnavarre and Richard Millington that Starbucks' brand just simply stands for coffee. I hardly feel that their coffee tastes the best, but that they have revitalised the coffee-drinking experience is without question.

It was still cool and interesting when it was new, and Starbucks capitalised on the cool factor by opening a store at every imaginable corner.

However, now is a critical moment for Starbucks and Howard Schultz. Sometimes cool doesn't stay cool for long. Even the leading jock of the football team can fall from grace and be replaced by the newer cool.

One way for Starbucks to regain the trust from consumers is to engage them where they can be found. The problem is that a customer that doesn't want to be found, won't be found.

Which is why I think that Starbucks should go to the blogosphere, to online social networks, to virtual communities and find their customers again (not necessarily Schult himself, but at least a couple of employees).

Revitalisation of human relationships is what is crucial at this moment.

That would be a great place for Starbucks to go too. The web is where that would be a great influence.

Isn't it amazing that a marketer can get feedback via blogs/Internet before even releasing a product? Do you know if any studies have been conducted to see how direct the correlation is between what people say their buying habits are when blogging and what their actual buying habits are? I could imagine someone saying "Howard needs to do this, it'll make me want to buy coffee more." However, that same person, once Howard has acted on their request, might never buy more coffee as a result. Just like sitcoms: no one likes laugh tracks, so everyone would say "get rid of 'em". But the fact is that laugh tracks increase viewership and make the show seem more funny - even though they're annoying!

In January, long before Starbucks went public with its challenges, an aggressive coffee franchise company - BIGGBY COFFEE - sent its CEO on the road to visit each of its 87 stores. His travels and conversations with owners and patrons is documented in his blog: whereisbiggbybob.blogspot.com
Very cool move.

Does anyone want to comment on the "humiliation" extravaganza conducted by Howard Schultz and company this past summer? I think that was a lame attempt at "connecting" with a really cute "customer" and when rejected decided it was time to schmear the hell out of the girl. Howard was gossiped non-stop this past summer because of the cruel and vile way he was treating this girl and all of his shady ties with Hollywood low lives, producers, actresses and even the Isreal military. This guy apparently thinks he lives above the law and there are plenty of people who will look the other way when he throws money at them. The guy is from Brooklyn and believe it, New Yorkers talk ALOT and I dont doubt that it is true.

http://www.youtube.com/watch?v=AlfszjapNb8
A UW student video project, simple and truthful...

http://www.youtube.com/watch?v=AlfszjapNb8
A knock at starbucks door that consumer and citizens are not stupid. We look beyond the color green and see how "fair" your trade is....

I think same you. Blogs turn people to business, blogs can make easy connecting between businesses to customers. Keeps them coming back. Reply email to member, etc.

You can't avoid social media. It isn't a necesary evil either. . .social media is upside. Read about how Obama set the high watermark at Digg! Obama on Dig

Social media is here to stay. Starbucks should get with it!!

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