Brand Autopsy

It’s been almost two years since Starbucks jumped into the deep waters of social media with their MyStarbucksIdea.com program. This is a website where customers submit and discuss ideas on ways Starbucks can improve its business.

Over 80,000 ideas have been submitted and late last year, Starbucks informed us over 50 ideas from customers have been implemented. Cool. Sounds great. Sounds impactful.

But wait, let’s take a closer look at these customer-driven ideas Starbucks has "implemented."

Of the 53 ideas Starbucks has "implemented," my closer look reveals only a handful of ideas, SIX to be exact, can be truly credited to customers. Many ideas Starbucks claims to have implemented from customers are either recycled products/programs Starbucks has done in the past or were clearly in the pipeline long before the customer idea was submitted.

For example, Starbucks credits a customer idea for the Splash Sticks (#1 on the list) they offer customers to help ensure coffee doesn’t spill out of the plastic lid. Reality is this idea was being done in Japan months before its introduction into the North American market. It’s not a customer-generated idea because this idea was already in the Starbucks product pipeline.

Starbucks also takes credit for responding to customer ideas for Free Wi-Fi access (#3). Not true. Wi-fi access at Starbucks isn’t free. There are hoops customers must jump through to get two-hours of free wi-fi a day at Starbucks. First hoop is to have a Starbucks Card. Second hoop is a minimum balance must be kept on the card. Third hoop is the card must have been used within 30-days. Then and only then can a Starbucks customer get “free” wi-fi. It’s fine for Starbucks to put restrictions on wi-fi access. It’s not fine to claim it listened to customers and now offers free wi-fi. It ain’t free if you have to jump through hoops and spend money.

Starbucks takes credit for selling Reusable Cold Cups (#7, #30) because of a customer submitted idea. Hard to give credit to the customer idea for something that has long been part of the Starbucks merchandise mix. Starbucks has sold Cold Cups for years in all sorts of styles, colors, etc. They’re called Travel Tumblers and these cups can keep cold coffee cold and hot coffee hot.

Same goes for giving credit to a customer idea spurring Starbucks to sell Venti-sized Travel Tumblers (#25, #53). Starbucks has sold such a product for over a decade.

Starbucks also claims to have responded to the customer idea of bringing back Chantico Drinking Chocolate (#15). Try ordering Chantico today at Starbucks and all you’ll get are blank stares because Starbucks doesn’t sell drinking chocolate. What Starbucks has done is reformulated its hot chocolate beverage to contain more dark chocolate. The company can’t take credit for bringing back Chantico when all it did was reformulate its hot cocoa recipe.

The most popular customer-generated idea is to offer “Great Conversations” (#14) by promoting community to foster in-store discussions between customers at Starbucks. Nice idea. Starbucks takes credit for implementing this idea by offering the GOOD Sheet. The GOOD Sheet you ask? It’s a pamphlet from the publishers of GOOD magazine discussing issues of cultural and societal importance. Good luck finding it at Starbucks these days, it might be discontinued, and better luck experiencing lively discussions between customers about the GOOD Sheet.

Starbucks has responded to the customer ideas for offering healthier pastries which include: More Whole Grains (#8), Increase Healthy Options (#37), Gluten-Free Packaged Food (#27), Healthy High Protein Breakfast (#9), Gluten-Free Options (#10), and Vegan Options (#11). Notice any redundancies in the ideas? Of these six implemented ideas, I’ll credit Starbucks for implementing three of them (Increase Healthy Options, Gluten-Free Options, and High Protein Breakfast).

Furthermore, of the 53 ideas "implemented," Starbucks takes credit for the ideas from Starbucks partners (employees) submissions. (Starbucks has an intra-company version of the MyStarbucksIdea website for partner submitted ideas.) Many of these ideas from store partners are worthwhile, but almost none of them impact the customer experience. Electronic Pay Stubs (#2), Discounted Work Wear (#6), and Employee Discount at StarbucksStore.com (#13) are some of these worthwhile ideas that have no impact on the customer experience. Because they have no impact from a customer perspective, Starbucks shouldn’t include these ideas in their tally.

If we delete the customer ideas Starbucks already had in motion, the ideas Starbucks incorrectly takes credit for implementing, and the employee ideas ... then we are left with only SIX ideas implemented. And of these SIX ideas, none can be considered as having significant impact on the Starbucks business.

THE LIST OF SIX IDEAS
1. Increase Healthy Options (#37)
2. Gluten-Free Options (#10)
3. High Protein Breakfast (#9)
4. Free Coffee On Your Birthday (#19)
5. Bring Back Yukon Blend (#39)
6. Shipping to Military addresses (StarbucksStore.com) (#45)

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My tough love for Starbucks is this: Don’t declare you’re going to be a different kind of company by getting customer input when you aren’t going to use it. It’s cheating to match programs/products you already have in the pipeline with the ideas submitted by customers. It’s also cheating to declare you’ve implemented customer ideas when clearly, you haven’t. Starbucks is too smart a company to cheat. So don’t.

Experience Seth Godin’s newest book, LINCHPIN: Are You Indispensable, like you never thought possible ... thanks to this dramatic reading by the sultry “Miss Betty.”

[NOTE: The Video Blog Association of America has given this video a rating of PG-13, some material may be inappropriate for children under 13.]

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>> DIRECT LINK to VIDEO

[NOTE: I received a free, uncorrected proof copy of LINCHPIN. However, I will spend my money to buy the hardback version.]

Next up on the “Less Than 300” project is William Poundstone’s PRICELESS.

(Truth be told, ain’t no way PRICELESS can be fully summarized in less than 300 words. No way. But, I’m giving it a shot.)

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PRICELESS | summarized in less than 300 words

PRICELESS is an advanced studies book on pricing practices, perfect for MBA students, product marketers, and entrepreneurs. The author, William Poundstone, draws from studies by renowned economists to dive deep into the psychophysics of money to explain how the “mundane act of naming a price ... turns out to be a surprisingly tricky process.”

If you lack the mind of an economist, expect to occasionally get lost in the book. However, just as you find yourself befuddled, you’ll become intrigued as Poundstone shares smart, actionable advice on how to effectively use bundling tactics, anchoring pricing strategies, and menu design to optimize the margin potential of retail products and services.

Bundling tactics, such as combo meals at fast food joints and prix fixe options at spendy restaurants, effectively use the art of confusion to get customers to spend more money. By bundling a la carte menu items together, most customers fail to do the math to see how much more they are actually spending.

Although anchoring pricing strategies have been commonplace for centuries, they are still powerful pricing levers. When a company offers something at an outrageous price as well as offering something comparable at a reasonable price, it’s using an anchor pricing strategy. A retailer doesn’t expect to sell a $50,000 watch. They do expect; however, to sell lots of comparably more favorable $500 watches.

The science behind the design of restaurant’s menu is complex and customers who order solely based on price are unprofitable diners. To get customers focused on choosing dishes with fewer pricing distractions, Poundstone shares simple typography advice including, eliminating dollar signs and decimal points. This helps diners to not see a menu as a price list from which to order cheaper items.

PRICELESS is priceless in how it reveals retail prices “are influenced by factors the conscious mind would reject as irrelevant, irrational or politically incorrect.”

WORD COUNT: 311

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[NOTE: I often receive free copies of biz books from publishers and publicists. However, I spent my money for my copy of PRICELESS.]

Business books have been a mainstay topic on the Brand Autopsy blog. We’ve done straight-up reviews, shared summaries, and done inane dramatic readings. This year, I plan to share concise summaries of most every business book I read. Concise as in... less than 300 words.

We kick off the Less Than 300 Project with Kevin Maney’s worthwhile book, TRADE-OFF: Why Some Things Catch On, and Others Don’t.

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TRADE-OFF | summarized in less than 300 words

It’s common knowledge consumers make conscious decisions to trade up with some purchases and trade down with other purchases. Kevin Maney approaches this as a trade-off where consumers “make trade-offs between the fidelity of an experience and its convenience.”

Products and services with high "fidelity" have an aura about them and are valued as delivering remarkable experiences. Cost, in the broadest terms, for anything possessing high fidelity qualities becomes irrelevant. Benchmark example: anything from Apple and other brands with high margins.

On the other hand, "convenience" refers to products and services that are easily obtainable in every aspect from low cost to widespread availability. Benchmark example: McDonald’s and other low margin/big volume brands.

The worst place for a brand to be positioned is in what Maney calls the “fidelity belly.” In this spot, a brand is neither viewed as having fidelity nor being convenient, and thus has no marketability.

The best place for a brand to be positioned is either having “super-fidelity” or “super-convenience.” For those few brands fortunate to have such positioning, the difficulty comes in maintaining their “super-fidelity” or “super-convenience” status as competitors are eager to displace those winning products and services.

WORD COUNT: 194

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[NOTE: I often receive free copies of biz books from publishers and publicists. However, I spent my money for my copy of TRADE-OFF.]

Another year blogging has passed. And just like I did in... 2004... 2005... 2006... 2007... 2008, below is a round-up of my favorite posts from the just completed year of 2009.

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We began the year talking about the business wisdom shared in the movie, AMERICAN GANGSTER. Seriously. This movie about the rise of a drug lord in the early 70s can teach any businessperson lessons on the importance of mentors... product launch strategies... brand dilution... leadership qualities... being quiet in order to make noise... and, how winners can quit.

No year on the Brand Autopsy blog would be complete without sharing some HMOs (hot marketing opinions) on a company where I earned my marketing stripes. Yep, we’re talking about Starbucks. Sure, we shared some HMOs on VIA, 15th Ave. Coffee & Tea, and the Starbucks Gold Card. We also talked about how Starbucks has many more problems than just selling boring coffee.

The WOULD YOU MISS posting series continued by asking if you would miss ACE Hardware, Costco, or Denny’s if they would cease to exist. Reader comments are always great to hear whenever this series runs.

Talking business books has been a constant theme on the Brand Autopsy blog. We began the year sharing MONEY QUOTES from interesting biz books including: Myths of Innovation... Taming the Search-and-Switch Customer... Notes on Directing... The Designful Company... Letters from Leaders... and, Exploiting Chaos.

2009 also saw the saw the return of MARKETING MASTERPIECE THEATRE with 7 new episodes of dramatic readings from influential business books.