Starbucks knows a thing or hundred about clicking with its customers. Not only have they mastered the art of serving coffee to the masses, but they also pour a consistent brand experience with every single cup.
But it hasn’t been easy.
Starbucks celebrated its 47th anniversary earlier this year, but as recent as 2008 (before the recession), reaching that milestone was very much in jeopardy.
Howard Schultz, former Starbucks CEO, wrote a book in 2011, Onward: How Starbucks Fought For Its Life Without Losing Its Soul. It’s a good read about the extraordinary emphasis Schultz placed on getting back to the soul of the Starbucks brand when he returned to lead the company in 2008, after turning over day-to-day operations control in 2000.
No doubt, the company continued to flourish through the first half of the 2000’s. By 2006, company stock touched $40 and locations swelled to more than 12,000 worldwide. But a funny thing happened on the way to this success: Starbucks apparently forgot their brand identity — the soul that made them distinctively, uniquely Starbucks among the increasing tide of competitors. Store traffic dropped. Spending per customer declined. Same store sales comps stumbled. And the stock price fell into the single digits. Staff was let go, and many stores were shuttered. As 2007 was winding down, things didn’t look so good for Starbucks.
The problems were many, including growing too fast, poor employee training, not monitoring costs, and operational shortcuts. The net effect was disenfranchised Starbucks loyalists. Lots of them.
(Re-)enter Howard Schultz. In early 2008, he told a gathering of employees at Starbucks headquarters, “We have to find and bring the soul of our company back, find our voice.” Yahtzee!
For years, Starbucks enjoyed a distinctive voice, and the rewards of speaking with it. They did the heavy lifting of crafting a strategic brand identity, and then implementing that identity throughout the hundreds of brand touch points that defined the Starbucks brand experience.
However, from 2000 until early 2008, they failed to live up to that brand identity and nearly paid for it.
What’s the lesson for us mere mortals in the business world? Do the work of crafting a distinctive brand identity, and then deliver that identity by purposely administering the brand touch points that drive your business. And stick to it as if your success depends on it. Because it does. At 34 North, we can help.