Customers will be confused, and you will become exhausted trying to manage everything.
Leading Questions …
How do your customers and employees respond to your promotions? Are there too many to keep track of? Is each program significant enough to make an impact? And do they align with the experience(s) you’re selling?
If you look at your marketing programs, from the present back to 12 months ago, which ones are memorable? Which ones are customers and employees still talking about? Would eliminating half of them have been unthinkable? Or would it have been easy, in retrospect?
A company can grow big without losing the passion and personality that built it, but only if it’s driven by values and by people, not by profits.
HOWARD SCHULTZ
(John Simmons, My Sister’s a Barista: How They Made
Starbucks a Home from Home, Revised Edition [UK],
Cyan Communications, 2005, p. 245.)
There is a life-cycle model called the Sigmoid Curve, a leaning-forward S, that describes the stumbling beginning, fast rise, glorious peak, and slow decline of every successful business, brand, or even idea. Management guru and author Charles Handy discussed this model in his book, The Age of Paradox, and pointed out that the right time to create a new idea, start a new curve, is when you are approaching the apex, not once you have passed it—for once you start down the other side of that curve, it may be too late, as illustrated in the diagram on the next page.
Sounds simple, but how to do that in the real world? Once you’re on your way to becoming a Goliath, do you really want to go through being a David again? It may be more romantic, but let’s remember, David was the underdog—and for good reason. But if you settle into the summit of the curve, you’re a Goliath just waiting for the next David to come along and knock you off your perch.
Starbucks long outgrew being the David of the specialty coffee industry and became its Goliath. The company dwarfs all specialty coffee competitors in market share and customer “mind share.” However, Starbucks refuses to settle into the role of being a coffee Goliath. It will not consider itself a Goliath because it no longer considers other coffee retailers as its competition.
Starbucks began with the mission of wanting to get the world to appreciate better tasting coffee. To put it simply, Starbucks has accomplished this mission. With the popularity and sustainability of the company, the next step is to make the transition from Starbucks as coffee “brand” to Starbucks as beverage “icon.” From this perspective, Starbucks is an upstart, competing against the old-school beverage icons like Coke and Pepsi. Starbucks considers itself a David because, compared to Goliath-proportioned Pepsi’s $30 billion and Coke’s $22.5 billion yearly revenues, its annual $6.5 billion is a blip in the megalithic beverage industry machine.
So what is Starbucks doing to step up to its new self-imposed competitors? One way is to look to other brand icons for ideas. Take Coke’s Diet Black Cherry Vanilla Coke® beverage and compare that to the Starbucks Marble Mocha Macchiato. Both rely on what started as a specialized drink (Vanilla Coke® and a Caramel Macchiato) and then grew into enhanced versions of themselves. And, taking a page from iconic McDonald’s and its “limited-time only” specials like the McRib® and the Shamrock Shake®, Starbucks has introduced promotional holiday beverages. Drinks such as the Pumpkin Spice Latte and the Peppermint Mocha bring a higher price point and add some zest to the usual menu offerings for customers, and that translates into driving higher year-over-year sales at Starbucks.
Sure, borrowing some sales gimmicks from the large competitors works to some extent, but Starbucks didn’t get where it is today by following other companies. Its brand is strong because it is the leader in the specialty coffee industry, and it led because of the passion its people had for the product. To transition to icon status will take hard work, significant investment, and continued passion. Upping the ante, going up against the Goliaths on a bigger stage, gets company adrenaline flowing. It motivates employees to keep a competitive edge, especially when the competition has changed. Nobody roots for Goliath. Most everybody roots for David. The best companies have their own employees rooting for them. Getting bigger by positioning itself as being smaller can rally customers and employees alike.
Starbucks’ success turned Starbucks into a Goliath, and now it has redefined and repositioned itself against a bigger Goliath in order to become a David again—a position Starbucks feels much more motivated operating under.
Leading Questions …
Who are the Goliaths and the Davids within your company’s competitive set?
How must your business change to maintain its upstart David mentality no matter how big your business gets?
When it comes to delivering memorable customer experiences, Starbucks follows “The Law of Remarkability.” This little-known, rarely followed marketing principle simply states remarkable things get remarked about. Because Starbucks strives to deliver memorable experiences, customers are more likely to tell their friends and family about Starbucks’ remarkability.
For Starbucks, it has been far more meaningful to get customers to tell their best friends about the beverages and coffees they enjoy from Starbucks than to try and convince them with a television commercial or advertising campaign. That’s genuine word-of-mouth at its best—when customers willingly, without artificial prodding from advertisers, talk about products and services they believe are worth talking about.
Word-of-mouth is a powerful tool. In fact, many studies show that word-of-mouth marketing is the most influential marketing medium in effecting consumer purchase decisions, ranking ahead of traditional advertising (television, radio, and print) and nontraditional marketing (couponing, online advertising, and in-store promotions). But to get customers to engage in word-of-mouth marketing, companies need to create products, services, and experiences that are worth remarking about. As Seth Godin writes in Purple Cow: “In a busy marketplace, not standing out is the same as being invisible.” The only reason customers will tell their friends about your great product is if your product really deserves the attention.
Starbucks taps into word-of-mouth marketing through being remarkably different because being remarkable is the one element it can control. By its very nature, word-of-mouth cannot be controlled—only sparked. Just as gossip between two people cannot be controlled, neither can word-of-mouth recommendations. Customers will say what they want, when they want, where they want, and for whatever reason they want. No, word-of-mouth marketing cannot be controlled, but it can be sparked.
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