Brand Autopsy

Lots of chatter online about the revamped Starbucks “rewards” program. Starbucks will discontinue its Gold Card program it began a year ago. The Starbucks Gold Card program was designed like many membership rewards program where customers pay a yearly $25 fee and in return they receive free refills on brewed coffee, free wi-fi access, and 10% off on all purchases.

Beginning December 26, Starbucks will replace its Gold Card program with a "My Starbucks Rewards" program offering customers a free beverage after 15 purchases. (There are a few other small perks in this program but it's essentially a Buy 15 Drinks, Get 1 Free program.)

Starbucks is touting its new rewards program as an improvement because of its simpler design and the no annual fee.

However, the consensus from the online chatter is this new program benefits less frequent Starbucks customers (2-to-3 visits a month) than the very frequent Starbucks customer (8+ visits a month).

Obviously the redesign of this program will benefit Starbucks more financially. Perhaps offering a 10% discount to Gold Card members on all purchases was profiting heavy-spending customers more than it was profiting revenue-needing Starbucks.

Whenever I read about new Starbucks business happenings, I refer back to the book I wrote about Starbucks foundational business practices. In TRIBAL KNOWLEDGE, there’s a short section on fostering customer devotion where I give the old school Starbucks perspective on “Preferred Shopper” loyalty schemes, such as a Starbucks Gold Card program or the new My Starbucks Rewards program...

“These ‘Preferred Shopper’ promotions also reverse the logic of great customer service: they ask customers to sign up for a card or buy a certain amount of product before they can enjoy the benefits of being part of the club. Do you really want to create two classes of customers? One that gets the ‘good stuff’ at a good price, the other that gets a raw deal? If you want to foster true customer devotion, don’t make your customers jump through hoops just to feel welcome, or 'preferred.'

Businesses operating like this treat their customers like cattle, doing whatever they can to attract attention. When companies are more focused on their own bottom line than their customers, both will eventually fall away. These programs lack soul and meaning to stand the test of time.”

The last paragraph in this chapter shares a thought more businesses, especially Starbucks today, need to pay attention to:

“Customer loyalty works both ways, and Starbucks knows that. Of course Starbucks wants to maintain its profitability, but it does this by helping the folks who come into its stores, not by working against them. If you want customers to stay loyal to you, stay loyal to your customers—treat them as people, help them as individuals, offer them something extra, and they’ll come back for more.”

You can read the full chapter, TRIBAL TRUTH #28: Foster Customer Devotion, in the box below:

Foster Customer Devotion

I had it to coming to me.

Someone spoofed my Marketing Masterpiece Theatre series of dramatic readings from influential business books. That someone is Jay Ehret from The Marketing Spot. Assuming the pompous persona of Sir Stamford Albert Winchester II, Jay reads from TRIBAL KNOWLEDGE.

I’m amused. Nice goin’ Jay. (Thanks.)

(It's nice to know my two-year old book still has some legs.)

Just got off the phone with a journalist writing a story about some of the marketing lessons I share in TRIBAL KNOWLEDGE. The journalist put together some tasty pull quotes from the book to help direct our conversation.

And since I'm obviously suffering from a severe case of blog drought, below are the money quotes the journalist pulled. Enjoy.

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“Companies that focus on delivering remarkable products and services attract significant attention from customers conditioned to a retail world in which the necessities are bought and sold without fuss or feeling.” (Page xiii)

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“Companies that put their money behind their brand and not their business fail to realize that the business is the brand.” (Page 6)

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“Starbucks learned the most effective way to spend its marketing dollars is not on making funnier television commercials but rather on making better customer experiences.” (Page 10)

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“…lasting brand loyalty is built on making the common uncommon…” (Page 11)

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“Measuring the reputation of a brand can and should be as simple as measuring the reputation of a company – something that is earned through purposeful execution and not merely fabricated to exploit a worthwhile business opportunity.” (Page 24)

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“The challenge for a company that chooses to open its doors – and grow its business – based on quality products and services and quality customer experiences is that it has only one shot to make a meaningful customer connection. Customers will overcome their aversion to higher prices if the product or service they are buying is well worth it.” (Page 32)

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“Businesses can simplify sales strategies by focusing on acquiring new customers; getting current customers to buy more, more often; and/or raising prices. It really is that simple.” (Page 40)

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“Growth was and is encouraged, and made possible, by wanting to meet the desires of customers more than wanting to meet sales or profit projections…Starbucks’ steadfast drive to become the best coffee retailer has resulted in its being the biggest coffee retailer. It can often work out that way…but it never seems to work in the reverse.” (Page 51)

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“What is the benefit of the benefit of your best-selling product or service? Think about its most important feature and make it more personal, until you’ve reached the ultimate experience your customers derive from it.” (Page 59)

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“Needs are basic. Needs are rational. Needs are boring. Needs have been commoditized. Every unremarkable business seems to be in the needs-fulfilling business. Wants are emotional. Wants are aspirational. Wants are thrilling. Wants are where the profits are. Only truly remarkable businesses are in the business of satisfying customer wants by helping customers actualize their aspirations.” (Page 96)

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“Delivering on promises is not enough today. Businesses, big or small, must find ways to over-deliver on their promises, implied and expressly stated, to customers…The most important part of over-delivering on promises to customers is having conscientious employees who make over-delivering a part of their everyday on-the-job way of life.” (Pages 103-104)

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“…experiences provide customers with rich and compelling stories to share with others, while products typically satiate immediate, basic needs.” (Page 136)

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“The best internal culture a company could hope for is one where the employees are so loyal they spread word of the company and its product with fierce passion, a culture where employees go way beyond being minions to being missionaries.” (Page 157)

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“Brands are made possible by people because, unlike products and services, competitors cannot replicate a brand’s promise, or their passion.” (Page 189)

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“Starbucks doesn’t view profit and the maximizing of profits as business strategy. The company views profit as an outcome. The mindset at Starbucks is, profit happens as a direct result of doing everything else right.” (Page 225)

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Further learning:
>> TRIBAL KNOWLEDGE | Amazon link
>> TRIBAL KNOWLEDGE Manifesto | ChangeThis website
>> ALL THINGS STARBUCKS | Brand Autopsy postings

If you can read Japanese then you can read my book. Order it from amazon.co.jp.

Hey everyone ... I'm easing back into the blogging world following a two-week respite. Skyon filled in nicely with some provocative posts. (For those grooving to what Skyon was sharing -- don't fret -- he's sure to be back.)

While digging through some search data on where people discover this blog, I found a link to a nicely-done abstract of my book, TRIBAL KNOWLEDGE. (Sure, an "abstract" already exists as a ChangeThis manifesto but this abstract is written by getAbstract and not me.)

The editors at getAbstract generally liked the marketing/business lessons I shared. You can read their main takeaways from the above image and read their recommendation below ...

"John Moore compiles the lessons he learned in his marketing career, including eight years with Starbucks, into this little book. Each of its 47 very brief, breezy chapters provides a single, useful concept. Maybe all that caffeine triggered Moore’s laser-like focus and brevity. The central idea is that your marketing works best when it is people-based and authentic. Your employees will pitch in with promotional efforts, too, if they see you and the company as genuine. If you show them that the company meets its commitments in everything it does, that will give them confidence that the company will fulfill its promises to them. Your customers will absorb that assurance and solidity from your employees, and everyone will benefit. This isn’t rocket science; some of the points seem a bit puffed up to make a book of more than 200 small pages. However, getAbstract finds the book’s core lessons worthwhile – like a latte, this small cupful is short and light, with a shot of energy."

Access the abstract here or here (.pdf).

In HOW STARBUCKS SAVED MY LIFE, Michael Gates Gill shares the story of how he dropped out of the corporate rat race and found happiness while working a $10.50/hr job as a Starbucks Barista. Michael’s story is interesting. However, the more interesting story is about Tiffany Edwards.

Tiffany, who Michael portrays as “Crystal Thompson” in the book, was the Starbucks store manager who hired him, an older worker with no relevant experience in the food service business. Michael’s relevant experience was as a former advertising executive and business consultant. Tiffany looked past Michael’s advancing age, his lack of food service experience, and his past-pampered professional life to hire him as an entry-level Starbucks Barista.

In his first couple days on the job, Michael became very concerned. He realized the job of being a Starbucks Barista was going to be much more difficult than he imagined. Michael writes, “I had originally thought that a job at Starbucks might be below my abilities. But now I realized it might be beyond them. This job could be a real challenge for me—mentally, emotionally, and physically.”

Keep in mind Michael was dealing with lots of issues in his life during this time. His consulting business was defunct, the relationships with his children were defunct, and due in part to an affair … his marriage was defunct. Also during this time he was diagnosed with a brain tumor. Michael’s whole belief system was shattered.

Tiffany helped to restore Michael’s belief system by being welcoming, considerate, and genuine. It just so happens those people qualities of being welcoming, considerate, and genuine are life skills Starbucks looks for in store-level employees, especially store managers.

Whenever I share with businesses some of the Starbucks Tribal Knowledge I learned from my days there, I always mention the importance of Making the Company Something to Believe In. This is about building an internal corporate culture where employees go way beyond being minions to being missionaries. When you make the company something to believe in, employees will talk about the quality of the company itself, the values the company endorses, and the ways in which their lives are enhanced because of it.

That’s what Tiffany did with Michael. All throughout the book, Michael gushes about how he believes in Starbucks. Michael learned those beliefs from the verbal and physical articulations of his superstar store manager, Tiffany Edwards. Read how Michael describes his Starbucks experience …

“I had found with Starbucks a better reality … not based on external status symbols but on a real feeling of confidence and support and genuine affection and even admiration for and from the Partners and the Guests. And Crystal. Crystal and Starbucks had saved me. Saved me from my pursuit of empty symbols, but also my anxiety about a fear-filled superficial life that hadn’t been, in the end, helpful or even enjoyable for me.”

An amazing story! Tiffany Edwards (“Crystal”) played a huge role in restoring Michael’s belief system by embodying the best qualities of the Starbucks corporate culture. Yet, we have heard nothing on record from Starbucks about this book, Michael Gates Gill, or Tiffany Edwards.

Starbucks seems to be purposely avoiding any connection to the HOW STARBUCKS SAVED MY LIFE story. Why is this? I don’t know.

Starbucks talks about getting bigger by acting smaller. As it relates to Michael and Tiffany, Starbucks is acting big, not small.

A big company avoids celebrating stories like the one in HOW STARBUCKS SAVED MY LIFE because it wasn’t “approved” by the company. On the other hand, a small company celebrates such a story because they are thrilled to have made a difference in an employee’s life.

Is it too much to ask for a blurb on the back of Michael’s book from Howard Schultz showing appreciation to Michael for sharing his inspiring story of finding happiness in life from being a Starbucks Barista? Is it too much to ask for doing an in-store book signing and reading at a couple Starbucks locations? Is it too much to ask for Starbucks to invite Michael to company headquarters to give a presentation to corporate employees on how life as a Barista gave his life meaning and purpose?

I don’t think so.

All of those simple acts would be ways Starbucks should act to get bigger by being smaller. Maybe Starbucks is doing some of these small things and I am just unaware. I hope that is the case because embracing the HOW STARBUCKS SAVED MY LIFE story is a simple way Starbucks can get small despite being big.

Many of you probabkly know Erica O'Grady, i-everything savant. But, you might not know that she does side work for The BusinessMakers Show airing on 950-AM KPRC in Houston, TX. (She's their on-the-road reporter filing interviews with business makers.)

Back in May, Erica caught up with me at the Webvisions Conference (Portland, OR) and recorded this interview. We talked about the business and the branding of Starbucks Coffee & Whole Foods Market,

For highlights of our conversation ... GO HERE TO LISTEN.

Nettie Hartsock, "backseat writer" and book publicist, and I struck up a friendship a few years ago online. It just so happens we both live in the badlands of Central Texas so from time to time, we meet for lunch to chat about our businesses and about business books we are currently reading. (By the way, if you are a wannabe biz book author, connect with Nettie. She can help show you the way to take your ideas and make them into a worthwhile business book.)

One of her many side-projects is to write articles and interviews for various publications. Recently, Nettie peppered me with questions for an article she's writing. Nettie posted the short interview on her blog. Here's a snippet ...

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NETTIE: How can any company take Starbucks as an example and use the best insights from its journey and apply it to their own?

johnmoore: This might sound odd, but it’s true. During its formative years, Starbucks never thought about “branding strategy.” Starbucks was too busy building a profitable business and making both customers and employees happy than to worry about “branding.” There’s wisdom in that approach. If a business makes money, makes customers happy, and makes employees happy … then the by-product will be the creation of a strong brand. That’s what Starbucks did. And that’s exactly what any other company can do.

READ MORE

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Here’s a little something Paul Williams and I used to talk about during our Starbucks days—measuring your comparable job performance.

As Starbucks marketers, we were always challenged to design marketing activities to increase year-over-year sales. (Easier said than done considering Starbucks was recording nearly double-digit comps during our time there.)

One day, back-in-the-day, Paul and I were discussing our upcoming annual performance reviews and we started riffing in terms of what we needed to do to comp against our work performance from the year prior. Figuratively, we began taking steps to measure our comparable job performance. We knew if we wanted to achieve double-digit comp growth in the next 12-months, we would have to stretch ourselves to assume more responsibility and find ways to improve our everyday on-the-job performance.

That riff turned into a Starbucks Tribal Truth which I included in my TRIBAL KNOWLEDGE book. And with 2006 having just bridged into 2007 … it’s a good time for us all to begin measuring our comparable job performance so we can set ourselves up to achieve more this year compared to last year.

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Excerpt from : TRIBAL KNOWLEDGE: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture (John Moore).

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Tribal Truth #44
Always Measure Your Comparable Job Performance

Many overachieving Starbucks partners measure their comparable job performance. They do it in the same way businesses and financial analysts look at year-over-year comparable sales growth (comp sales) to gauge the vitality of a business and evaluate its future growth prospects.

By comparing their current job performance in relation to their job performance of the previous year, these overachieving Starbucks partners are able to better evaluate their contribution in the workplace to determine if their overall performance is trending positively or negatively.

What if you were to figuratively measure your comparable job performance? Would you find yourself performing 2 percent better this year compared to last year? Or have you performed 20 percent better? Perhaps your comparable job performance is trending negatively.

Before your next job appraisal, take some time to figuratively measure your comparable job performance. Note that some measures are objective and quantifiable while others are purely subjective and rely on your own judgment. That’s okay. Measuring your comparable job performance is simply another self-evaluation tool—one that focuses on your annual progress, as opposed to against a static standard. Honest and candid self-reflection are critical here, not whether or not you think you improved by 10 or 20 percent.

To start measuring your comparable job performance, ask yourself these questions:

• How much more did you contribute to the success of your company this year compared to last?
• Have you gained more responsibility in the past year?
• Are you more confident in your abilities to positively impact your company’s future?
• Did you lead or participate in more project teams this year than last?
• Were you involved in more worthwhile projects this year?
• Did you deliver more of your projects on time, on budget, and on strategy this year?
• Do you have more direct reports this year than last?
• What steps did you take in the past year to learn new skills?
• Do your peers have greater respect for your contribution as an employee and as a person this year compared to last year?
• Have you made more of a difference in the lives of your direct reports or peers this year than last?
• Do you feel more satisfied personally and professionally this year?

After reviewing your comparable job performance from the previous year, you then need to develop action steps in order to set the stage for positively comparing against yourself in next year.

If you expect to perform 20 percent better this upcoming year than last year, you will need to figure out how you are going to achieve your comparable performance growth goal. You may determine you should attend a seminar to learn new skills. Perhaps reading a business book will give you insight so that you can perform better on the job. Alternatively, you may need to gain an assignment on a different project to increase your responsibility and visibility. Or it may be a case of simply working smarter and not harder.

The value in measuring your comparable job performance cannot be understated—it will allow you to better determine on-the-job activities so you can learn more, grow faster, and prosper truer in both your professional-life and your personal-life.

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*** COMPLETED ***

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iEvolution is hosting a Tribal Knowledge Chit-Chat Session this Friday (Dec. 8) at 12:00 noon(est)/9:00am (pst). In this hour-long conference call, I’ll be sharing some Starbucks Tribal Knowledge. Plus ... there’ll be a lengthy Q&A.

Join the chit-chat session by dialing 712.432.3000 and use the pass code: 486932. And to play along at home, I recommend you upload/watch this presentation from SlideShare.net. I'll talk with ya on Friday.

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Recently I chatted with Mark Ramsey of Hear2.0 acclaim. Mark’s a whiz-bang radio marketing guru and crazy movie fanatic. Our paths have crossed many times online with me linking to Mark and Mark linking to me so it was nice to chat voice-to-voice with him.

Our conversation focused on Starbucks TRIBAL KNOWLEDGE stuff as well as how radio stations can apply some of the “tribal truths” Starbucks has used to build an endearing and enduring brand.

You can wander over to the Hear2.0 site and listen to our 15-minute conversation as well as read a short excerpt of our interview.

Thanks Mark for making this happen.

In my book, TRIBAL KNOWLEDGE, I share worthwhile quotes from Starbucks executives. Unfortunately, not every quote made the cut for inclusion in the book. The following SlideShare presentation shares 10 quotes that landed on the cutting room floor. Click the 'play' button to view/read the quotes. Enjoy.

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RSS Readers ... click here to view the presentation.

I'm quick to tell others that I take my job seriously but myself lightly. It's a line I picked up years ago from reading IMPROVISE THIS and it helps to explain why I am so passionate about the work I do. Basically, I try to have fun while playing the complicated and stressful marketing game.

In the spirit of taking my job seriously and myself lightly, I put together a spoof commercial for TRIBAL KNOWLEDGE. Yeah, it's super-goofy. But hey ... it's just me trying to have some fun. Enjoy. (I hope.)

the TRIBAL KNOWLEDGE "commercial"

RSS readers click here to view the video.

Last week, MarketingProfs.com published an article from me on the concept of a “Brand Checkbook.”

This concept is simple ... just as your personal checkbook has credits and debits, a “Brand Checkbook” has credits and debits in the form of brand credits and brand debits. Brand Credits are business activities that enhance the reputation and perception people have of a brand, and Brand Debits are those that detract from the reputation and perception of the brand.

Back in the day when I was at Starbucks, we would use the “Brand Checkbook” concept to determine the appropriateness of marketing activities. If interested, read the MarketingProfs article or read Sam Decker’s riff on the concept. And yeah, you can also find this article as Tribal Truth #9 from some book called TRIBAL KNOWLEDGE.

It’s true … I have a man crush on Tom Peters. There, I said it. For proof, riffle through my Brand Autopsy category dedicated solely to posts riffing off of choice rants and raves from Tom Peters.

So I’m totally jazzed to be included as one of Tom’s “Cool Friends.”

Over on tompeters.com is an interview where I share some HMOs (hot marketing opinions) on Starbucks “Tribal Knowledge” and about how the book is really my “love story” to a company that meant so much to me as a person and as a marketer. Be sure to read how I get called-out for potentially undermining sales of Tom's "Project 04" book. Whoa, that caught me off-guard.

Click on the image below to read the interview...

Read the Interview

Fresh from the oven is the TRIBAL KNOWLEDGE Manifesto available for downloading at ChangeThis.com …

ACCESS MANIFESTO HERE

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In many ways, this manifesto is how I originally intended sharing the business and marketing lessons I learned from working deep inside the Starbucks marketing department. It’s snappier, cleaner, and written with a greater sense of urgency than is the finished book.

You can think of the book version as a long-lasting and ohh-soo-satisfying Triple Grande Latte. While the TRIBAL KNOWLEDGE Manifesto is a deep and intense shot of Espresso designed to be consumed quickly but its flavor to last indefinitely.

I know many of you are longtime Brand Autopsy readers and we most likely sing from the same marketing hymnal. However, you probably know someone in the cubicle next to you or perhaps a friend you know is embarking down the startup business path—they could possibly use a shot of marketing adrenaline. So when you read the TRIBAL KNOWLEDGE Manifesto, be thinking about the people you should pass-it-along to inspire them to make meaningful marketing happen with their business endeavors. Deal?

For more on everything Tribal Knowledge-related, visit:

www.tribalknowledge.biz.

Thanks.

johnmoore
BRAND AUTOPSY

Over on the TRIBAL KNOWLEDGE companion website, I’ve added a new feature I’m calling The Starbucks Mailbag. A couple of times a month, I’ll answer specific questions I’ve been asked about Starbucks strategies and decisions. The first question I share my insider thoughts on comes from a Brand Autopsy reader who asks, ”Who came up with the brilliant idea of marketing CDs at the counter? Was it synergy between the record companies and Starbucks or can you trace it to one individual?”

Read my thoughts here.

On her Must Read Business Books blog, Nettie Hartsock has posted an interview we did over email. Nettie asked me questions about how companies should view customers and about actions companies can take no matter their size to engender better branding. And yeah, I shared Starbucks Tribal Knowledge throughout. >> LINK to the INTERVIEW <<

Blogging from his new residence in Amsterdam, Paul Williams, from the Idea Sandbox, shares some kind words in his review of TRIBAL KNOWLEDGE.

Thanks Paul. And I truly meant what I wrote in my appreciations pages about your influence on helping to make me a smarter marketer. So, thanks yet again.

Brian Oberkirch, of Weblogs Work, was in Austin last week and we sat down and talked shop at one of my favorite haunts—The Ginger Man. Our conversation turned into an interview with Brian asking me questions about TRIBAL KNOWLEDGE, my to-be-released book on lessons I learned from working deep inside the Starbucks Marketing Department.

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DOWNLOAD INTERVIEW HERE
[20:47 minutes | 23.0 MB]

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Coinciding with the publication of TRIBAL KNOWLEDGE in the early fall, I’ll be crisscrossing North America visiting with Business Associations and Marketing Associations. During these visits I’ll be delivering a thirty-minute version of my Starbucks Tribal Knowledge presentation which shares business and marketing lessons I learned first-hand on how Starbucks found prosperity from selling a commodity. (View sample PowerPoint slides here.)

I have some holes in my speaking schedule and would like to add your city to my “North American TRIBAL KNOWLEDGE Tour.”

If you would like to have me speak at an upcoming Marketing, Advertising, Public Relations, and or Business Association breakfast or luncheon . . . your organization will only need to cover transportation costs (from Austin, TX) and hotel expenses (if necessary). And if I have an open date on my schedule, then we’ll make this happen.

This opportunity is reserved for non-profit Business and Marketing Associations. However, if your for-profit business would like to have me speak, we can arrange this for an appropriate fee.

The manuscript is baked. Blurbs are being solicited. Galley copies are being printed. The tribalknowledge.biz website is being created. All and all — lots of activity going on as Kaplan Publishing is busily prepping TRIBAL KNOWLEDGE for a Sept. 1st publication date.

Over the next few months, I plan to share more tidbits about the book including excerpts and insider commentary. Don’t expect TRIBAL KNOWLEDGE to be a heavy-handed pedantic-rich business book distilling tired and trite platitudes about Starbucks’ business success.

Instead, TRIBAL KNOWLEDGE has been written to be a breezy business book sharing ideals to spark ideas with entrepreneurs, small business owners, and marketers. Basically, this book shares business and marketing lessons I learned while spending nearly a decade working deep inside the Starbucks marketing department. Some of these lessons include: Bake Marketing into Your Business ; Strong Brands Always Have More Brand Credits Than Debits ; Only Three Strategies Exist to Drive Sales ; and Participation Is the Price of Admission.

As a TRIBAL KNOWLEDGE teaser … you can download and read the Introduction chapter (pdf file).

Oh yeah, I’d be remiss if I didn’t mention you can pre-order the book at Amazon or Barnes & Noble.

If you live in and around the badlands of Central Texas ... attend the San Antonio American Marketing Association February Luncheon this Wednesday (Feb 22) to hear me share some STARBUCKS TRIBAL KNOWLEDGE.

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DETAILS
John Moore spent eight-years working deep inside Starbucks Coffee and in his STARBUCKS TRIBAL KNOWLEDGE presentation, he’ll share business and marketing lessons on how Starbucks found prosperity from selling a commodity.

San Antonio AMA February Luncheon
Wednesday, February 22
11:30 am – 1:00 pm
Old San Francisco Steakhouse
10223 Sahara St., San Antonio, TX 78216
map | driving directions
AMA Members $25
Guests $35
AMA Student Members $20
(Walk-ups welcomed)
RSVP HERE

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TEASER SLIDES
click below to enlarge

[Eighth in a series of posts on Starbucks Tribal Knowledge]

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What happens when you gather a roomful full of passionate, and sometimes highly caffeinated, overachieving Starbucks Partners in a meeting? You get healthy dialogue.

Starbucks has a peaceful business veneer but, behind closed doors in any of its 100+ conference rooms at its Seattle headquarters, you will witness heated and contested conversations.

Starbucks would rather have these difficult conversations take place in conference rooms than in the hallways. That’s because Starbucks consensus-building decision-making culture requires all issues from all angles be discussed before a decision is reached. This can’t happen in a hallway conversation between just two people.

In response to a rash of unhealthy hallway conversations which were undermining the effectiveness of Starbucks project teams in the early 2000s, former CEO Orin Smith posted Effective Meeting Rules signs in every conference room. These rules were designed to refocus and encourage healthy discussion for all Starbucks project team meetings.

For Starbucks, an effective meeting follows these seven rules:
1| Has clear objectives
2| Follows a focused agenda
3| Begins and ends on time
4| Has a designated leader and attendees have clear roles
5| Fosters open, honest discussion
6| Communicates next steps and responsibilities
7| Fulfills its objectives

[Seventh in a series of posts on Starbucks Tribal Knowledge]

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How many times have you sat idle in meetings or in conferences? Instead of participating, you choose to disengage yourself and simply coast.

Coasting will not get you far at Starbucks. Your career will stagnate. You will get left behind. You will eventually get ejected.

The most successful Starbucks Partners realize participation is the price of admission to meetings and conferences.

When Starbucks Partners choose to accept an invitation to a meeting, they choose to come prepared to make a worthwhile contribution. They choose to offer their insights. They choose to ask the tough questions. They choose to participate.

By participating, these Partners not only become a part of the consensus-building environment. They also help themselves get recognized as someone who cares about the business and as someone who is eager to make things happen.

It’s eager partners who are the more successful employees at Starbucks.

Starbucks Tribal Knowledge tells us participation is the price of admission to any meeting or any business gathering. Don’t procrastinate. Participate.

[Sixth in a series of posts on Starbucks Tribal Knowledge]

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“Location, location, location” is the most well known mantra in the real estate game. Because of Starbucks, it is also becoming a well known mantra for savvy businesses to receive free advertising exposure.

Locationing is a real estate/marketing strategy where every retail location also serves as a billboard for a business. Everything about a store’s physical exterior, from the awning to the logo on the side of the building to the company name in lights, is, in essence, a billboard communicating the business to customers.

Starbucks locationing strategy is called Main & Main and the real estate department maximizes every opportunity to place Starbucks locations in the most highly visible and highly trafficked street corners ... just like advertisers do when selecting billboard sites.

Locationing also extends to triggering impulse purchases from customers.

Starbucks triggers impulse purchases from customers by locating stores near dry cleaners and video rental stores. Starbucks takes full advantage of the morning commute customer traffic generated from people dropping off clothes at the dry cleaners on their way to work. And, Starbucks positions itself to take advantage of attracting late afternoon customers picking up movies from video rental stores on their way home from work.

Location, location, location … it’s not just for real estate anymore. It’s also for marketing.

[Fifth in a series of posts on Starbucks Tribal Knowledge]

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There is only one Organizational Chart that truly matters to a customer-first business like Starbucks. And it looks something like this:

Next time your business gears up for a Re-Org, consider putting the REAL boss at the top –- Your Customers.

[Fourth in a series of posts on Starbucks Tribal Knowledge]

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Starbucks will not deny they are everywhere. But they are everywhere because customers want them to be everywhere. Otherwise, they wouldn’t be there. (Starbucks is smart like that.)

Starbucks works under the premise of being everywhere customers want them to be. According to internal research studies, customers would be more satisfied if they had a Starbucks more convenient to them. So Starbucks satisfies customers by opening more stores in more places to be more convenient to more people.

It is startling to note Starbucks is fast approaching having one store for every 10,000 people living in cities like Seattle, Atlanta, Dallas, Boston, and Oakland.

Yet, despite being seemingly everywhere, Starbucks excess access is not impeding financial success. Year-over-year sales growth at Starbucks has consistently been in the upper-to-middle single digit range for years now.

However, Starbucks excess access has changed its business proposition. Starbucks no longer can compete on being quirky and quaint. Instead Starbucks competes on being consistent and convenient. People no longer have to go out of their way to find a Starbucks. A Starbucks literally finds them … and that is all by design.

Starbucks Tribal Knowledge tells us if you stop competing on quirky and quaint and you must start competing on being convenient and consistent. For Starbucks, it has been a trade-off that satisfies more customers leading to greater sales success.

[Third in a series of posts on Starbucks Tribal Knowledge]

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“If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.”
Howard Schultz, Starbucks Chairman & Visionary

Developing a loyal customer base at Starbucks is not overly complicated. As Howard Schultz says, it’s nothing more than greeting customers in a friendly manner and making a drink exactly to their desires.

Seriously, that’s the blueprint for how Starbucks has cultivated a fanatically loyal customer base where 20% of its customers visit more than 8 times per month and 80% of all their coffee purchases are made at Starbucks.

Starbucks views each customer interaction as a high-touch experience. From the way customers are greeted by a barista to the way their hand-crafted espresso beverage is ordered, prepared, and enjoyed, each customer’s experience at Starbucks is individually customer-ized through high-touch means.

Delivering great customer experiences through touchology requires companies trust its employees to be themselves when connecting on a personal level with customers. Unfortunately, too many companies are reluctant to place that much trust and responsibility in the hands of customer-facing employees.

Instead of trusting their employees to be human, most companies attempt to replicate personal interaction through high-teching their business with technology. Be it loyalty cards to recognize and reward frequent customers, self-service kiosks to increase efficiency, or automated phoned systems to facilitate servicing customers, these high-tech methods drive the human equation out of the business transaction.

It’s not that Starbucks hasn’t tried high-tech methods to improve the customer experience. Indeed, they have.

In one experiment, Starbucks sought to increase speed of service, an important factor in delivering a great customer experience, by implementing a high-tech hand-held ordering system designed to reduce the logjam of customers ordering at the register. A store partner, with techno gadget in hand, would take orders from customers standing in line and wirelessly beam each customer’s order to a barista at the espresso bar. While this high-tech ordering system did improve speed of service, customer feedback negated the efficiency gains. Customers complained the mechanized ordering system was too impersonal and took away from their overall experience.

Starbucks ditched this high-tech ordering system and went back to the high-touch method of personally connecting with customers at the register during the ordering process.

For Starbucks, high-touching its business is about empowering and trusting store partners to be real, to be genuine, and by all means … to be human. Starbucks does not give partners a detailed script that instructs them what to say and how to act with customers.

Instead, Starbucks acknowledges store partners have been trained to understand all facets of the business and the company trusts these partners to show their personality when interacting with customers.

Starbucks has learned customers appreciate the high-touch human interaction with store partners and not the high-tech mechanisms which attempt to emulate personal relationships, but are a poor substitute for the real thing.

High-touching its business through touchology means is one more example of how Starbucks is in the people business serving coffee and not in the coffee business serving people.

[Second in a series of posts on Starbucks Tribal Knowledge]

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To put it simply, remarkable businesses make the common uncommon.

Apple made the common computer uncommon.
Toyota Prius made the common car uncommon.
In-N-Out Burger made the common fast food hamburger uncommon.
Method made the common hand soap uncommon.
Whole Foods Market made the common grocery store uncommon.

And Starbucks made the common cup of coffee uncommon.

Before Starbucks, the common cup of coffee could best be described as a hot, brown liquid. A drink to be endured for its jumpstart your day benefits of caffeine.

Coffee’s purpose then was as a caffeine delivery vehicle. And established brands like Folger’s, Maxwell House, Brim, etc. were the most popular caffeine delivery vehicles on the market. It seemed people were satisfied with their instant coffee ritual so long as it gave them a jolt.

But Starbucks wasn't satisfied doing coffee like everyone else. Starbucks believed coffee should be enjoyed for its rich, strong, and densely-sophisticated flavors and not simply endured for its caffeine pick-me-up qualities.

Starbucks would have failed in the marketplace (and more importantly, failed themselves) if they did coffee like everyone else -- light roast, light flavor, cheap low-grade coffee, and cheap low-impact experiences.

Instead, Starbucks has taken the common cup of coffee and made it uncommon by focusing on higher-quality coffee beans and higher-quality coffee experiences. What once was something to be endured, Starbucks made into something to be enjoyed. Something to experience.

Starbucks Tribal Knowledge tells us businesses can find prosperity from a selling commodity so long as they can make the common uncommon … and uncommonly great at that.