February 28, 2016

I continue to ponder whether we brand digitally or digitally brand.  Starbucks provides a great example of when fundamental marketing and branding – coupled with state-of-the-art digital brand message delivery –  solidified the brand’s leadership in its category.   But first, it had to revisit the fundamentals. At Starbucks, necessity became the mother of disruptive reinvention.

Putting the ‘Horse’ Before The Cart.  When a marquee like Starbucks starts to stray from its core values and promise, even a most beloved brand can lose its patina.  In most cases, this can be attributed to one thing – strategic complacency.  A brand sitting on top of its category can start taking success for granted.  It stops innovating, fails to leverage the opportunities that technology affords.  It loses its soul by not focusing on cultural strengths, core values, and a vision for delivery of the expected ‘ultimate consumer experience.’  The results are predictable; earnings and share value start to plummet. As Starbucks started losing its leadership position, former CEO Howard Schultz returned to the company to put Starbucks on a trajectory to regain category leadership.

He essentially re-set the clock and got back to basics.  Schultz lamented that Starbucks had become a fat-and-happy company that lost sight of its core values and brand promise, and forgot how to innovate –  as he put it “… playing defense instead of trying to score.”  His main goal was to return the company to one that not only sold fresh brewed coffee, but also served as a ‘third point’ in the customer’s journey between home and work that was not simply transactional – rather The Ultimate Customer Experience.  What guided Starbucks back to leadership?  Schultz laid out a three-pronged approach.

Invest in the brand.  Starbucks listened to customers and employees for critically important feedback to identify and fix the problems, leverage strengths, and orchestrate renewed success.  Starbucks realized it had lost its way and needed to revisit its brand values, reinvigorate its employee assets, and regain the loyalty of lost customers by refocusing efforts on elevating the customer experience and making it better over time.

Invest in employees and community.  Starbucks provided renewed training – it actually closed all its stores for one afternoon to accomplish this.  It worked to re-motivate employees and to boost morale so that store managers and baristas – alike – provided a unique, consistent customer experience.  And, it continued to focus upon, and use the brand’s large scale to maintain its socio-corporate conscience for doing community good. Research has proven that visible, publicly spirited efforts add value to a company’s brand valuation and bottom line.

Invest in technology – ‘Brand Digitally’.  Starbucks expanded and introduced new product lines into both new markets and delivery systems.  And, in setting the bar for utilization of digital technologies and social media, Starbucks leveraged emerging technology to reinforce the connection between the brand and the customer experience to generate more demand, deepen loyalty ties, and regain its leadership position.

Starbucks Cards and Apps – which are part of the Starbucks Rewards ® loyalty program – have become a marketing colossus with millions U.S. participants; globally, the cards are available in dozens of countries.  The clout of this technology feeds powerful CRM programs that further demand-gen objectives and brand loyalty, and elevate the CX.

The integration of mobile platforms, which includes a highly successful payment program gives Starbucks a direct, real-time, personalized, two-way digital relationship with its customers.  Its iPhone app allows customers to order before going to a store, to ‘shake to pay’ and to tip digitally, as well as earn free drinks and other perks.

Starbucks has returned to its position of supremacy.  By employing disruptive reinvention it is now running a shrewder operation.  Returning to its fundamental core values and brand promise to guide it – Starbucks has been able reinvigorate staff, regain the loyalty of lost customers, and leverage digital technology to create more demand as well as loyal, enduring one-on-one customer relationships. And in doing all this, this category leader has rightfully reclaimed the #1 position in its global market.