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Monday, November 12, 2007

Great marketing doesn’t make a great company

You can’t argue that Starbucks is an impressive company. From a small local coffee shop in Seattle to a global behemoth, they’ve changed the coffee experience for a whole generation. Long a tradition in Europe, the gourmet coffee shop culture hit the U.S. not too long ago (OK, I can’t remember when it hit big time, but it wasn’t that long ago). There have been coffee shops around for quite awhile, and there’s always been the quintessential (I like to throw big words in every once in awhile so you think I’m smart) American diner with diner coffee, but the explosion of the coffee culture is a recent phenomenon here. And Starbucks is the undisputed leader.

But what is Starbucks, really. In my opinion (to save me from any legal issues, this is my OPINION), Starbucks can’t make a decent cup of coffee to save their lives. And don’t get me started on their, so called, espresso, my drink of choice. But given that, they sure are successful. In some places you can’t spit without hitting a Starbucks. The cartoons kidding about opening a Starbucks in a Starbucks is not far off the mark it seems. So they’re successful, but at what.

To me, Starbucks is a marketing company. They’ve introduced coffee (one choice, extra dark and bitter) to the masses. They’ve raised coffee from a commodity to a premium product. They’ve pioneered the concept of cannibalizing sales of an existing store to raise total sales. You’ve seen it, they’ll put a store right across the street from an existing store, which takes sales from the existing store, but increases overall sales by attracting customers who wouldn’t go to that existing store for one reason or another (traffic patterns, parking, laziness, etc.). Genius.

But great marketing doesn’t make a great company. They’re processes are broken, or were never designed well in the first place. As I said, I’m an espresso man (and for the best espresso I’ve had, the gold standard, head over to The Steps of Rome caffé in San Francisco). Now espresso should never touch paper. It’s a ceramic cup, demitasse, or nothing (well, unless you’re in an airport where you take what you can get). So I order a “double espresso for here”. That concept is beyond many of the new employees, the “for here” thing. I guess they often skip over that part in Starbucks school (less than stellar training process). Then the fun begins.

They’re set up to move people through as quick as possible. Depending on the time of day and how busy it is, the number of employees waiting on customers varies. But usually, one person takes the order and takes your money. They grab a cup and write the codes on it for whatever you’re ordering. These are paper and plastic cups. To go. Not for here. So that’s what they’re set up for. To get an espresso for here they have to write the code on a small sticky, about the size of a band-aid (can I say that, or do I have to say Band-Aid brand adhesive bandage?). So the person making the drinks is used to grabbing the coded cups, not the coded sticky. So the sticky frequently goes unnoticed or lost in the shuffle. This is not good from the customer’s perspective (me). I end up waiting. I usually stand right up at the counter so they see me and wonder why I’ve been standing there so long. Sometimes I ask if they’re making my espresso. Sometimes the person who took my order notices me standing there with my thumb up my butt, waiting. Standing there like a dissatisfied customer. But, hey, I’m just a guy with a $2 espresso, not a $5 mocha lotta quadruple pump soy half foam chunk ‘o licious fru fru whatever. Then today, just to throw me over the edge, they give me a single espresso instead of the double I ordered and paid for. They even handed me the single espresso while saying “here’s your double espresso”. Poor service makes me cranky. Broken processes make me cranky. It doesn’t have to be that way.

Of course, I say this as I sit in Starbucks yet again. I wrote my first book here and I’m writing my next book here, so obviously it has some appeal. The greatest appeal is its proximity to my house. The fact that they have numerous outlets to plug into is another appeal, as is the general coffee shop culture, and the constant buzz of activity that helps me work. I find I concentrate better when there’s activity and some noise around, it helps me focus. I can’t be the only one who works better this way, because there are a lot of people who come here to work. I’ve seen the same people here for years. The students come and go, but some of them camp out here for a couple of years at a time.

So I’m not bashing Starbucks, I just think they have some improvement to do. Better to do it now, when you’re at the top of the heap, then when the competition gets tougher and you have to fight for customers. Fix your process, make better espresso, and offer different roasts of coffee.

And just what makes a great organization? Delighted customers. Customers who are happy, satisfied, get exactly what they want, and sometimes things they didn’t even know they wanted. Effective processes. Processes that work towards achieving the organization’s strategic objectives. Processes that have defined goals, are efficient in achieving those goals, do not waste time, effort, or money in achieving those goals. Processes that are clear and understandable, and are measurable. Organizations that stand out above the crowd with their internal practices, how they treat their employees and how they go about achieving their goals. And organizations that give back to the community, locally, and globally if they are able. Organizations that treat their customers and their non-customers alike with respect and dignity.

I’m done now.

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