Putting the Horse Before The Cart. When
a marque 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. Putting the Horse Before The Cart, 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 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,
which are part of the My 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.
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