Does it look too good to be true? Usually yes. But once you’ve taken the paper off and found a smashed burger with a yellowish tomato slice, wilted lettuce, scant onions, and a tissue-thin hamburger patty, you’ve already given your money to the restaurant. You could complain, but you’ll only be rewarded with more of the same. For these companies, marketing is a way to lure customers, and what happens after they’ve ordered really doesn’t matter. Sadly, we’ve come to expect this.

For Starbucks, marketing is a way to get customers to try new things and feel better about themselves—it’s the overall experience, the realness of the product, that matters most. For Starbucks, it’s all in the details of reality.

6. RESPECT PEOPLE’S INTELLIGENCE

Starbucks treats customers as being interesting to get them interested. And interesting people, as Starbucks sees them, are constantly expanding their knowledge and horizons. For this reason, Starbucks uses a more educated approach when it speaks to its customers, from how it talks about itself as a company to the level of detail on its packaging. Starbucks consistently views coffee much like wine. Wine enthusiasts have acquired a palette for the various varietals and blends. They have an appreciation for the finer things and usually are willing to put their money behind their interests. Just as a wine label will talk about where the grapes were grown and the flavors elicited in that first sip, Starbucks whole bean packaging talks about the coffee region and the roasting process.

An educated customer still has one final step to go: the ordering process. Starbucks respects its customers’ intelligence by not posting signs around the store with “Venti = Large, Grande = Medium.” While it may take a little longer to figure out how to order your double tall, half-caf, vanilla, nonfat latte, once you do, there’s a feeling of belongingness, that you’re part of the “club.”

That’s the same reason Starbucks doesn’t offer combo deals, like nearly every other quick service fast-food restaurant does. It wants the customer to be able to order on her or his own. But no company can ever be perfect. One time Starbucks stores displayed a counter-top sign at its registers promoting its version of a combo deal—“A Perfect Pair”: a scone and a cup of coffee. These signs were prominently featured in stores, that is, until Howard Schultz saw the sign in one of his stores and trudged back to company headquarters, with the repulsive sign in hand, calling for the complete removal of the counter card sign. The signage creative didn’t respect customers; it spoke like a fast-food retailer; it wasn’t true to the company. The signs were pulled immediately from all stores as Starbucks marketers realized that the promotion strayed far from their unwritten rules of marketing authenticity.

Building a brand and growing a business that stays true to itself is not about perfection but progress, about being capable of recognizing missteps and then fixing mistakes. That progress is what keeps strong companies moving forward.

Leading Questions …

TRIBAL TRUTH 14
Keep Your Merchandising Relevant

While representing slightly less than 10 percent of a store’s total sales, merchandise at Starbucks still plays an important role of complementing and accentuating a customer’s coffee experience. Thanks to Starbucks, stainless steel tumblers have become an indispensable accessory for commuters of all types.

Over the years, Starbucks has experimented in its merchandise strategy with varying results. Translucent dustpans didn’t sell. Neither did fancy pencil sharpeners, nor did T-shirts. But Italian-made ceramics have sold very well, as have board games such as Cranium®.

Because Starbucks is viewed as a taste-maker, competing coffee businesses (and Starbucks customers, for that matter) seek to understand why the company chooses to sell the selective merchandise it does.

Selecting the right merchandising assortment is risky, but Starbucks reduces the inherent risks by adhering to the following five unwritten merchandise relevancy guardrails:

1. Merchandise quality matches the high quality of Starbucks coffee.

2. Merchandise links directly to coffee or to a “coffee moment.”

3. Starbucks can make the product uncommonly better by adding innovation and or unique style.

4. The product offers distribution opportunities outside of Starbucks stores, such as grocery stores, online, etc.

5. The product provides customers “rewarding moments,” be it in a Starbucks store, in a customer’s home, at a customer’s place of work, or while a customer is on the go.

Leading Questions …

TRIBAL TRUTH 15
Actions Speak Louder Than Advertising

Excessive marketing spending will only accelerate the demise of any poorly conceived company.

SCOTT BEDBURY
(A New Brand World: 8 Principles for Achieving
Brand Leadership in the 21st Century)

For many marketers, the answer to the question of, “Sales are down, what should we do?” is to spend marketing dollars on creating an advertising campaign. Not at Starbucks.

During its formative growth years from 1987 to 1997, Starbucks spent less than $10 million on advertising—for a publicly traded retailer the size of Starbucks, that kind of miniscule advertising expenditure is almost unheard of, especially for a growing brand. (Consider that in 2006, a 30-second spot that aired during Super Bowl XL cost $2.5 million. Coke and Pepsi each go through $10 million on advertising expenditures in about two or three days. Their extravagance makes Starbucks skimpy advertising outlays all the more remarkable, doesn’t it?)

When Starbucks was young and developing, it eschewed advertising more as a matter of not being able to afford it than anything else. But as Starbucks grew, building its business and its brand in concert, it realized something significant: Word-of-mouth was the best advertising any company could ever hope to receive.