Site moved to www.brandautopsy.com/2010/01/tough-love-for-starbucks.html, redirecting in 1 second...

« LINCHPIN | a dramatic reading | Main | Fit to Flexible (the skinny edition) »

January 26, 2010

Tough Love For Starbucks

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."

SBUX_ideas

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.

SBUX_ideas_Six
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)


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.

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341bf89d53ef012877169895970c

Listed below are links to weblogs that reference Tough Love For Starbucks:

Comments

I think part of your thesis is built on a couple common, but faulty assumptions about MSI. To be upset that the "50 ideas" didn't spring fully formed and exclusively from a single customer's head and then be taken to completion by Starbucks is to (A) ignore the approval-sourcing value of MSI and further (B) buy into the 2 faulty assumptions below

**Faulty Assumption 1- Starbucks is unable to come up with any ideas that serve its customers' needs. MSI should provide ideas instead.

Starbucks, in spite of its missteps, is run by smart, well-intentioned folks. They come up with ideas, good and bad, all the time. Every idea comes with a price tag, though- whether it's infrastructure or product cost, partner mindshare, or focus stolen from other programs in the store.

MSI is not a replacement for an R&D department and Starbucks gets this, mostly. How many good ideas did you see die on the vine within the walls of Starbucks (whether it was due to the pricetag, being ahead of its time, or perceived lack of customer interest)? How many bad ideas did you see escape the building only to be recalled months later after failure? MSI can use the wisdom of the crowd to push ideas that are almost tall enough to jump the hurdle into stores and also can use that same crowd to de-prioritize projects that should be shelved.

**Faulty Assumption 2- Customers and partners who post on MSI are unique snowflakes who confirm their ideas are *novel, *appropriate for the Starbucks brand, and *profitable prior to posting them.

MSI is a customer and partner listening instrument. MSI can be used to listen to ideas, but more importantly it can be used to listen for SUPPORT of an idea: Is that one hand clapping I hear? Or thunderous applause?

Sometimes the MSI commenters post duplicates of the same idea, ideas that are not appropriate for the Starbucks brand, or ideas that can never be profitable. The fact that 80,000 ideas were posted and only 50ish were implemented so far should not be surprising.

MSI can generate truly grassroots customer ideas, true, but it is just as useful a tool to prove customer interest for a program or product that was already in the pipeline or that had been tried and then set aside.

If the pipeline was sped up or if the idea was dusted off and given new life on behalf of customers, isn't that providing value to the customers who requested it?

Smoove B. Coffee ... I am not contending SBUX is unable to come up with ideas on their own. They are. As evidence by many of the customer-driven ideas on MSI being recycled SBUX ideas from the past.

MSI has the opportunity to be a great listening AND responding device for SBUX. On some ideas posted, SBUX is good at responding. On other ideas, not so much. Take the post from Terry Davenport about the new Starbucks Rewards program (http://bit.ly/1GHVOu). There have been lots of comments questioning the dropping of the Gold Card for the new program and lots of comments suggesting the new program doesn’t measure up. I’m sure SBUX was/is listening. Unfortunately, Starbucks has failed to respond to the lingering questions even after a commenter said, “It looks like Starbucks has given up on this thread. I don't think they care about how this new program will affect that super-regular group of customers.”

You may have missed my point in the post. My point isn’t about the worthiness of the MSI site. That’s worthy. My point is it’s cheating for SBUX to take credit for implementing customer-generated ideas that (a) they haven’t actually implemented or (b) for ideas that were already in the pipeline before a customer submitted the idea.

Who cares whether it's actually free or not. The bigger point is ... They needed a customer website to come up with free WiFi?! Seriously?

You did your homework. Bravo. Nicely thought through.

Interesting and well thought out article. If Starbucks did go the route of "fudging" their results, it's unfortunate, the true results would be valuable to evidence of ROI for social media.

The free WiFi has been a sticking point for me as well. There are many small, independent coffee shops who include free WiFi; why not Starbucks? Seems to me like they would want their customers to stick around longer and drink more coffee. I just don't get it.

I like your post, it was quite informative... One point of disagreement: Although many Starbucks charge after 2 hours for internet, there are plenty of Starbucks' that offer free internet. But hey, if that's the biggest contention, I agree with a whole lot.

John ... Starbucks has limited seating in most of its stores. I think they are afraid too many "freeloaders" would commander a table and chair displacing paying customers. That's my thinking. Of course, this opens up the door for indie coffee shops and Panera Bread to offer free wi-fi as a competitive play against SBUX.

P.P. ... I know of no company-owned Starbucks that offers 100% "no hoops" free wi-fi. Perhaps some of the licensed concepts locations have hoops-free wi-fi.

Thanks John - That seems to be a reasonable assessment. Of course it could go the other way too - an intending freeloader could find themselves unintentionally buying numerous cups of coffee and lattes because they are there anyway working. I know it's hard for me to resist :)

This is perfect example of how SBUX is truly a company that is behind the times and ignorant to it's value in the marketplace. I was personally part of one of the online focus groups, having posted almost 800 times, many of those posts being new marketing and product ideas. No matter how honest and straightforward I was in my opinions nothing was acted upon. Instead just rhetoric spin over and over again from the SBUX marketing staff. I think it's worse to ask for ideas and not act on any of them versus not asking for ideas. It truly alienates your core customers. This company is truly broken.

Lee ... can't say I agree SBUX is behind the times here. They are participating in social media and many companies of SBUX size are doing far less than SBUX.

However, to your point, SBUX needs to do a better job of responding and engaging people with a personable voice and not a PR-voice online, especially with their MyStarbucksIdea (MSI) site. So many of SBUX posts and responses on MSI have clearly been sifted through of "PR" filter which makes SBUX seem disingenuous.

And I agree, it does alienate customers when a company asks for ideas and doesn't act upon on them.

But the coffee is really bad. Leave out the 1000 cal of suger and you have mud.

I like your thought processes. nice short list of ideas from some useless ideas which are generated by starbucks. I think starbucks trying to build their brand, rather than giving value to customers....

I continue to be baffled by the corporate thinking that causes businesses to ask for feedback they don't use or acknowledge, as if simply being asked were enough. Do they do that at home?

"Honey, tell me what you think of this outfit. I don't really care, and I won't do anything about it, but maybe it'll make you feel better just to say the words."

It's a good step to start seeing your customers as human beings. It's another good one to start behaving as one yourself.

Even within the six ideas, there are issues: the gluten-free orange cake was dropped so fast I only heard about it after the fact. The replacement nut bars (Kind?) are cheaper to buy at Trader Joe's. These guys are fast losing my business...

Hi John! Very interesting list! It will be interesting to see if Starbucks does things like launches dark cherry mochas here saying, "MSI customers demanded it" when in fact it's been a popular international beverage for a long time.

However, I wanted to respond specifically to #26 which is "vote down an idea". I can't remember when exactly, but that was added to MSI late 2008 (MSI launched March 18, 2008 at the annual meeting of Shareholders).

It's pretty clear that Chris Bruzzo didn't initially want the "vote down" option, at about 2:00 minutes into the video he definitely says that he didn't want that but they changed it because the MSI community wanted it.

http://www.youtube.com/watch?v=Y1wjiM0bAzM

While I take a bit of issue with some of your assertions, and my reasons are adequately expressed by others here, I do very much agree with yours on the WIFI. It must be an interesting inside story about the contractual negotiations on this topic. Like the Starbuck's Card, they have developed a Byzantine process designed apparently to result in very damn few people using the purported benefit. I hope all the community support stuff Starbuck's purports to do are easier to access.

I can't count on my Starbuck's access to wifi working, so I have to go to Panera when on the road, their wifi is, well, free!

It takes a lot of work to filter through all these ideas. An idea does not have to be new to be counted, re-inventing things works out very well. Starbucks hasn't sold Venti tumblers for a while and when they do, it's sparatic.

The drinking chocolate was not just hot chocolate reformulated. It is a completely different beverage involving a blend of five different chocolates steamed up. This appealed to a much wider audience and that is another thing that must be kept in mind.

The MSI site is also for partners who want to make change. Some ideas are for the baristas and some are used to help the customer. They should very well be included.

And why shouldn't ideas that are from other places or countries be incorporated? These ideas are new to Starbucks and as such should count.

When Businesses create an expanded Complaint/Comment Network (whether electronic, internet based, or physical through complaint cards) that does not mean that all ideas implemented will be solely Generated from comments/complaints, or solely from Business's management;

i.e. If Starbucks implemented an idea that management had an mind, and then a customer proposed it, Starbucks could state that it is actually satisfying customer needs by implementing their ideas; think of it that way, if starbucks states that only 6 of the ideas implemented are customer generated, and the rest are management generated, that starbucks was PRO ACTIVE, and is being modest by claiming they caught the ideas from consumer comments;

in the end of the day, Business is all about selling, whether an idea, a feeling, a service, or a product; Starbucks has all the right to promote its website by attributing idea implementation/idea generation'source being the customer.

it is called Customer Emotional Innovation: "Making the consumer feel good by capitalizing on his Emotional involvement".

your argument could stand under the following topic: "is it ethical/unethical that starbucks twists facts, eventhough it has the right to do so?


My personal opinion: Way to go Starbucks, at least they are Implementing good/cost effective, strategies to communicate and build a bridge between Customer Satisfaction, and customer Expectation.

(www.lebmarketers.com)

Lebmarketer ... per your facebook posting, my opinion isn't an argument against crowdsourcing as a marketing strategy. Not at all. I am merely pointing out SBUX is taking too much credit for implementing customer-driven ideas.

Mr Moore, by posing the "starbucks is taking too much credit for implementing customer driven ideas" you are missing the point;

the objective is to satisfy customers, since it would be better attained by the starbucks website idea, then whether clients take credit or Starbucks take credit it is not an issue.

keep in mind that users are posting their opinions with no intentions of taking credit or recieving a reward, Arent they?

Or is SBUX wanting to satisfy their need to believe they are satisfying customers?

SBUX believes they have satisfied customers wanting free wi-fi by offering low-cost wi-fi.

SBUX believes they have satisfied customers wanting "great conversations" by offering the GOOD sheet.

SBUX believes they have satisfied customers wanting Chantico drinking chocolate by reformulating their hot cocoa recipe.

My point stands. SBUX is taking too much credit for responding (i.e. satisfying) customer-driven ideas when they haven't as noted by the examples in the post.

Dear Mr Moore,

i respect your argument, i didnt refute your point, i simply am trying to figure out how valid and informative it may be.

we could use your opinion and expertise on our group (www.lebmarketers.com).

Lebmarketers

Regarding improving business for customers your research points in the direction of pure failure, but in terms of a social media marketing campaign they have over 80,000 hits of success via customers and partners. So in that regard well done.

I wish I had seen this post earlier. I've worked for Seattle's Best, another American coffee chained owned by Starbucks, about two years ago as a manager, and frankly, the sheer amount of this sort of idea re-gifting is astronomical.
I can't tell you the number of times I've received note from my boss to tell employees that their cries have been heard conveniently at the same time headquaters has to abide by some new law, or the number of times I've told a customer that they surely must have been heard when a new metallic tumbler comes out.
It's silly, and I'm glad someone is doing their research on a public forum.

The comments to this entry are closed.