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What I Learned: What if Starbucks wasn't Cool?
July 7, 2008

 
What I learned this week ... I noticed on Scott Anthony's Innovation Insights blog entry titled "Which Customer's Voice Matters Most?" which ponders the choice of Starbucks rolling out new, milder tasting coffees. Scott discusses a fundamental issue on listening to customers that is important to any company, whether you are making coffee or cars, which is how to avoid a big mistake when choosing which customer feedback to adopt.

What Starbucks Did
According to the post, Starbucks listened to some of their customers. Or more, listened to some criticism from some potential customers about their coffee. The criticism was about the "bold" nature of Starbucks which to some is interpreted as "burnt" and did not find appealing. Scott rightly discusses whether a company should listen to their best, most loyal customers (it sounds like Starbucks is getting some feedback from the purists on their "watered down" coffee offering) or the potential new customers. What I think he touches on well, but does not go further into, is whether there should have been an alternate brand or sub-brands (an example was Gap/Old Navy). I think he is on to the right thing here.

Why (just maybe) You Shouldn't Listen to Some Customers
My belief is that Starbucks went against their core value proposition. Starbucks is cool. It's not the coffee from the convenience store, it's different. Let's face it, it has snob appeal. I remember my first cup of Starbucks and I had the same reaction. I have since grown to appreciate coffee and it's different flavors, and enjoy a wide mix of "bold" and "boring" brews. But "boring" is not cool, and it is not unique. The kind of criticism from Starbucks newbies is what makes Starbucks cool. If everybody likes and appreciates it, it has no snob appeal. That is where you need to protect the loyal customer's buying decision. They are buying a Starbucks for goodness sake, not a coffee from Dunkin Donuts for so much cream and sugar it tastes like a milkshake. And they are proud of it.

What we can Learn Here
I don't want to pretend to know what Starbucks should/could have done. Let's face it, you can get all manner of sweet, mellow drinks there these days. And perhaps their biggest problem is that they have gone from being unique (and priced accordingly) to being imitated all over the place. Now, you can get good coffee lots of places. And sometimes, I feel like having a Dunkin Donuts coffee (but without so much doctoring up) that goes down smooth.

So how to listen to new customers and protect the old? Understand what the consumer values about the brand and the consumer experience with the product. And whatever you do, don't violate it. The kiss of death to a premium brand is the cheap model, unless it is somehow clearly labeled as "the cheap model" through branding, so the purists can retain the snob appeal of the brand. If you have a "cool" product that not everybody likes, and that is what they are willing to pay for, then Scott's idea of a new brand is spot on. The key is listening to why the customer values the product. Buying a "Starbucks" isn't just buying a "coffee." Buying a Starbucks makes me cool.

One Last Thought
Just as a note, I think Starbucks changed from snob appeal to mass market "cool brand" a long time ago. I doubt few of their purist customers were too pleased with the Frappuccino in a bottle. And the roasts are all branded so you can pick "bold" if you are a purist, even if the wishy washy guy next to you (could be me on some days) chooses something "mild." So the genie has been out of the bottle for a long time. But still is a great example to discuss how to address customer input. Thanks to Scott for sharing.

So as you have your coffee this morning, I hope you found this look into listening to customers interesting. Who knew? I didn't, if you did let us know about it.

Posted by Jim Brown on July 7, 2008 | Comments (0)