Starbucks and Carpet Cleaners
One of my favorite authors, Frank Lane – author of Killer Brands: Create and Market a Brand That Will Annihilate the Competition
The following came from Frank’s blog and he gave me written permission to share it:
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Grounds for Divorce
by Frank Lane
What will Starbuck’s do next to weaken one of the truly great Killer Brands to emerge in recent years?
First, they established the brand with strong, full bodied, European styled coffee for a different and more compelling expectation. That lured enough coffee drinkers to make them a big time brand.
Then because they didn’t appeal to everyone, they introduced lite-note coffees virtually indistinguishable from ordinary coffee. (I do not know for sure this fact, but I have been told by Starbuck’s managers that lite-note coffees which have been pushed in units for over five years have never reached 10% of beverage sales). Lesson, weaken the brand for very little gain.
Then they licensed the brand to others in other categories, e.g., ice cream. Then they franchised the brand to airports and such where people ordered Starbuck’s not from trained baristas but from fast food grade employees.
Then last week they hinted at the introduction of cheaper coffee. Today they confirm that they are introducing “instant” coffee at $1.00 per cup.
I admit they have taken a hammering from the economic situation and news shows everywhere showing people how to save money in tough times by foregoing their $5 coffee drinks. BUT STARBUCK’S SHOULD BE STRENGTHENING THEIR BRAND RIGHT NOW, NOT WEAKENING IT (NO PUN INTENDED).
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While it’s true that Starbucks is a very different product than carpet cleaning, there are several parallels. Off the top of my head it is definitely time to explore and re-explore the value we provide to customers to ensure they fully understand our competitive differences and that their perception of our value is extreme.
The Starbucks parallel also gives us an idea of what happens when the customer starts to view our services as a commodity.
Yes, the economy is on everyone’s mind and it is affecting “convenience” more than “necessity” products and services as evidenced by the recent stock highs of value brands like Wal-Mart and McDonalds and lows of high-end brands like Nordstrom and Ruths Chris.
There is definitely a clear but fine line between “affordable” and “cheap”. Customers don’t like cheap but they also have to view the product or service as affordable, now more than ever.
A $5 cup of coffee may not appeal to the overwhelming majority of consumers, just as .75/sqft carpet cleaning doesn’t apply to most people. However, the majority will spring a few more bucks for what they perceive as extremely high quality vs low or avg quality.
Coffee drinkers still drink coffee just as we can’t overlook that no matter the economy our services still appeal to those who cannot fathom living with dirt. The new trick is that we have to accept that now more than ever customers are looking for higher quality at what they perceive as an affordable cost.
Scott
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