Wednesday, February 27, 2008

Starbucks - The Missing Three Hours

Caribou should have seen a little spike for three hours yesterday afternoon as thousands of Starbucks customers were forced to drive down the road to order "grandes" instead of "ventis." Can you communicate the importance of "we'd rather not do business at all than not do business right" by closing your doors to your customers in order to do training?

Jon writes to explain the logic behind Starbucks' marketing decision: Howard Schultz wants everyone to know he has "retaken" the company and is behind this move. They are reigning in growth in the States in favor of more overseas expansion which could make more sense. Building more stores doesn't mean people will stop in more times in a day for coffee just because they pass five more stores on their ride home.

They grew too fast, took business away from established stores, caused managers to miss their bonuses (because of the cannibalization) and created some unhappy baristas. It looks like they are going back to their "happy place" of what makes Starbucks what it really is; a company that is 100% coffee. To wit, they just got rid of their expanded food program. Customers don't go to Starbucks for a salad and sandwich, they go there for a latte and a scone.

It's clearly a great company that had the right marketing going, but got too big and drifted away from their roots and their niche of what they do THE BEST IN THE WORLD. If they get back to what made them great, they'll be fine. An anchor on FoxNews was just ripping on customer service and how it took ten minutes to get a latte. That's not good. You pay $5 for a latte that is made fast, well and with a dash of coffee attitude. Today's closing is for that reason. Back to basics!


Thanks Jon - great lesson here for all of us.