Brand Autopsy

Site moved to http://www.brandautopsy.com/2011/03

Solving Starbucks Problems | March 2007

  • 2 Comments

The Brand Autopsy Archive Project
1,400 posts since December of 2003. That’s a lot of HMOs (hot marketing opinions) served up on the Brand Autopsy blog. For this week, we’re going to revisit five vintage posts from the Brand Autopsy Archives. Enjoy...


BACKSTORY | April 1, 2011
Howard Schultz is doing a full throttle media junket tour promoting his book on how Starbucks rediscovered its soul, reinvigorated its financial footing, and reengineered its growth engine. The book is titled ONWARD and this has me looking backward to when Paul Williams and I offered Starbucks some tough love on how to solve its growing problems.

In a ping-pong series of posts in March of 2007, Paul and I, both former Starbucks marketers, were responding to Howard Schultz’s leaked internal memo where he admitted that Starbucks has “… had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, some might call the commoditization of our [Starbucks] brand.”

With the publication of ONWARD, this five-part (with 10 posts) series has been given new relevance. Re-read, or read for the first time, the laundry list of strategies and tactics Paul and I believe Starbucks could’ve implemented to become the company Howard’s book says it has transformed into being.


One_post_intro

We began by addressing the LOSS OF COFFEE THEATRE issue:
Paul analyzed the switchover from the La Marzocco espresso machine to the Verisimo automatic machine and offered up tactical ideas Starbucks can use to course-correct itself back to espresso authenticity. I riffed off Paul’s post and added the idea Starbucks needs to give permission to store partners to showcase their flair and personality while on the bar in order bring some of the coffee theatre back.
Next on our list was the LOSS OF COFFEE AROMA issue:
I explain in detail how “operational efficiencies” (not Flavorlock packaging) have led to Starbucks stores no longer smelling of coffee. I offer the quick-fix solution of finding ways to grind coffee in-store again. Paul disagrees with my exoneration of Flavorlock packaging and he smartly offers up the idea of implementing an “Aroma First” rule. This “Aroma First” rule would have Starbucks making in-store decisions based upon how any proposed activity would impact the aroma of coffee inside a Starbucks.
We also addressed the LOSS OF STORE SOUL issue:
Paul breaks down what it means to be a Mom & Pop shop and gives specific ideas on how Starbucks store design should stop being all things to all people at all its stores. I offer up thoughts on how Starbucks should give more control to its stores to run store-specific marketing programs and post store-specific marketing signage.
We touched upon the LOSS OF MERCHANDISE focus:
I explain how Bearista Bears and Finger Puppets sell very well, but it a great cost to the brand. As a solution, I propose Starbucks ask itself two questions to ensure its merchandise focus: (#1) Does the product link directly to coffee? If yes, sell it. If no, don’t. (#2) Does the quality of this product match the high-quality of Starbucks coffee. If yes, sell it. If no, don’t. Paul adds-on and modifies my two questions by asking if the merchandise links directly to either the preparation, consumption, and/or enjoyment of coffee. He closes his thoughts by expressing just because Starbucks can sell music, DVDs, and plush toys doesn’t mean they should.
We close by addressing the LOSS OF IDENTITY issue:
Paul likens Starbucks returning to its core to restoring antique furniture to its core, original finish. He also brilliantly points out Starbucks needs LESS INNOVATION and MORE EXPLORATION. Starbucks didn’t invent coffee, it explored the world of coffee and brought interesting flavors to its customers. Paul says Starbucks should concern itself with digging deeper into the world of coffee and uncover exotic coffee concoctions and share them. I take the IDENTITY conversation in a different direction and explain how Starbucks needs to standup to the bullies working on Wall Street by pruning all of its unhealthy growth in order to rejuvenate its soul and refertilize its reason for existing.

The Domino’s Theory to Keeping Employees

  • 0 Comments

The Brand Autopsy Archive Project
1,400 posts since December of 2003. That’s a lot of HMOs (hot marketing opinions) served up on the Brand Autopsy blog. For this week, we’re going to revisit five vintage posts from the Brand Autopsy Archives. Enjoy...


BACKSTORY | March 31, 2011
Summarizing business books and articles has been a mainstay on the Brand Autopsy blog. The archives go deep with Interesting Articles and Business Book Musings. Years ago, I stumbled upon an article from the Wall Street Journal (Feb. 17, 2005) about Domino’s Pizza store manager hiring strategies worthwhile because it explains the important role store managers play in reducing front-line employee turnover. It’s also interesting because Domino’s learned that paying employees more money is futile when the company culture doesn’t pay enough attention to the employee experience. Retailers of any size and retail marketers from any company can learn something about attracting and retaining great employees from this article.

Originally posted on March 14, 2005

DominosHigh employee turnover rates not only compromise service to customers, it can also hurt a business financially. It costs a business like Domino’s Pizza $2,500 to train every new entry-level worker and in upwards of $20,000 to train a new store manager. And when you hire 180,000 workers a year, like Domino's was doing in the late 90s, we're talking huge financial costs.

So when David Brandon was named Domino’s CEO in 1999, he went on a crusade to reduce Domino’s 158% employee turnover rate. Brandon’s crusade has been a success. These days, Domino’s employee turnover rate hovers around an impressive 107%.

In reducing its employee turnover rate, Domino’s choose not to go the conventional path of paying workers more money. As Brandon put it, “If we had increased everybody’s pay 20%, could have moved the needle a little bit to buy a little loyalty? Maybe, but that’s not a long-term solution.” He went on to say, “… you can’t overcome a bad culture by paying people a few bucks more.”

Instead, Domino's chose to focus on retaining store managers more than store employees to reduce staff turnover. It is Domino's experience when store managers churn at high rates, it has a tremendous negative effect with store-level employee turnover rates.

So the Domino’s Theory to Keeping Employees is about ensuring store managers are (a) of better quality, (b) have better tools, and (c) are better incentivized.

(a) Hire Better Quality Store Managers
According to research commissioned by Dominos, the critical success factor of a Domino’s store is not location, location, location ... but rather ... store manager selection, selection, selection. One way Domino's selects better store managers is to have each candidate undergo an online test to measure their financial acumen and people management style.

(b) Give Store Managers Better Tools
Each Domino’s store has an in-store computerized tracking program which details store sales figures down to the employee level with stats like average order size per employee and the time it takes to get a pizza order out the door. These tools help Domino’s managers to better track their star performers and challenged performers.

(c) More Meaningfully Incentify Store Managers
Besides giving profit-based bonuses, Domino’s also doles out stock options to top-performing managers based upon customer service measurements and store sales growth gains.

SOURCE: Wall Street Journal | To Keep Employees, Domino's Decides It's Not All About Pay | Feb. 17, 2005

What Ries Doesn’t Get About Execution

  • 2 Comments

The Brand Autopsy Archive Project
1,400 posts since December of 2003. That’s a lot of HMOs (hot marketing opinions) served up on the Brand Autopsy blog. For this week, we’re going to revisit five vintage posts from the Brand Autopsy Archives. Enjoy...


BACKSTORY | March 29, 2011
I’m a big fan of Al Ries. He co-wrote POSITIONING with Jack Trout in 1980 and its become a bedrock marketing strategy book. His recent Ad Age articles about branding in the today’s social media world and the dangers of discounting are spot-on. However, I disagreed with Al’s article from March 7, 2005 saying, “Marketing is 90% strategy and 10% execution.” The following post explains the importance of execution in making retail magic happen.

Originally posted on March 8, 2005

There’s been some blog chatter on Al Ries’ latest Ad Age article, “What CEOs Just Don’t Get About Marketing.”

I think Ries’ penchant for hyperbole is overshadowing the crux of his argument that good execution of a bad marketing strategy will not deliver exceptional results.

However, I can’t blame anyone for jumping all over him when he writes such blanketed statements like, “Marketing is 90% strategy and 10% execution. With the right name, the right target audience, the right position and the right timing, most marketing programs are bound to work. The difficult part is the 90%. The easy part is the 10%.”

Has Ries undervalued the importance of people (employees) executing a marketing program? Oh yes ... he has grossly undervalued the importance of people making marketing happen.

I just don’t buy his argument that most marketing programs are bound to work if the right name, right audience, right positioning, and right timing are in all place. I also disagree with his statement that the easiest part to a marketing program is the execution.

My experience at Starbucks Coffee and Whole Foods Market tells me marketing is more like 35% strategy and 65% execution. A so-so marketing strategy can deliver exceptional results if those responsible for executing it are informed and inspired to make retail magic happen. The real trick is how best to solve for informing and inspiring customer-facing employees to make retail magic happen.

Brand Examiner Paul and I wrote about one such way we solved for informing and inspiring Starbucks partners to make retail magic happen in a Fast Company blog posting from December of 2003. Click here to read about Blended Beverage Bingo.

So … from your experience, what % of marketing is strategy and what % is execution? Is it 90/10 or is it more 35/65?

Competing for Share of Consciousness

  • 0 Comments

The Brand Autopsy Archive Project
1,400 posts since December of 2003. That’s a lot of HMOs (hot marketing opinions) served up on the Brand Autopsy blog. For this week, we’re going to revisit five vintage posts from the Brand Autopsy Archives. Enjoy...


BACKSTORY | March 28, 2011
I remember being homesick in March of 2004. It was just a few months after I had moved from Seattle to Austin to work with Whole Foods Market. Luckily, work travels brought me back home to Seattle. I stuck around a few extra days to visit some old haunts and finally got around to reading the excellent book, THE VISIONARY’S HANDBOOK. This post shares one of the many thought-provoking paradoxes that every marketer at a growth company should read and be inspired to think/act differently.

Originally posted on March 24, 2004

While on vacation in Seattle, I’m taking time to catch up on some reading and some thinking. Currently, I’m chewing on the paradoxical wisdom written by Watts Wacker and Jim Taylor in The Visionary’s Handbook. (Admittedly, I am a laggard in reading this book as it was first published in 2000. I really hate being a laggard!)

In one chapter, the authors talk about competing for "Share of Consciousness" with consumers.

“To win consciousness share, the message has to tie to the product to the experiences of the consumers you want to reach, so it can enter the full dimensionality of their lives. The message can’t just celebrate the product – products are everywhere.

You can also create consciousness share by never forgetting that all great consumers – the ones who set markets and launch new product lines – are acutely aware of themselves as markets of one. Fail to win a share of their attention by being innovative at the same time you are pursuing a share of the larger market consciousness, and you’ll be sacrificing the future for the present.

The largest percentage of the market you are ever going to attract occurs at the very moment you begin to lose the customer who made it happen.”

All marketers working for companies that are in full throttle growth mode should re-read and "chew" on this statement again: “The largest percentage of the market you are ever going to attract occurs at the very moment you begin to lose the customer who made it happen.”

WHOA!!! That is a “chewy” statement.