23
STARBUCKS’
OWN GOOD IDEA
How the coffee giant became one of the largest brands
in social media
BY DOUGLAS QUENQUA//FREELANCE WRITER
 editor@ama.org
In September 2006, Starbucks hardly
seemed poised to become a social
media role model. That month, the
coffee giant was forced to publicly
renege on an offer when an e-mail
coupon for a free drink—meant only
for friends and family of Starbucks
employees in the Southeastern United
States—unexpectedly went viral,
popping up on blogs and even eBay.
What was supposed to be a small,
local promotion became a national
embarrassment. For years, the incident was held up as a case study of
inept online marketing.
T
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oday, Starbucks is a case study of a different sort. In
July 2009, the Seattle-based company was ranked the
world’s most engaged brand online by San Mateo,
Calif.-based strategy consultancy Altimeter Group.
That same month, it surpassed Coca-Cola as the most
popular brand on Facebook (which it still is today, with more
than 5 million fans).
“They’re doing something right,” wrote Ayelet Noff of the
tech blog TheNextWeb.com in January.
Of course, Starbucks doesn’t make any money directly off its
social media efforts—you can’t charge people to follow you on
Twitter, and no one’s going to pay to watch your YouTube videos.
But what it does is reinforce and deepen relationships with existing customers. Also, the average age of a social media user is
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OOOOOOO Digital Issue
24
Alex Wheeler,
director of digital strategy
considerably younger than most people
buying coffee today, which means Starbucks
is hopefully generating “fans” through
social media who will one day morph into
lifelong customers.
Much of what makes Starbucks successful
on social media platforms is by now familiar: The company uses Twitter, Facebook and
its blogs to listen more than talk; it creates
a sense of community through one-on-one
interactions; and it doesn’t shy away from
engaging the brand’s fans and critics alike.
Alex Wheeler, director of digital strategy
for the Seattle-based chain, says the company’s
approach to digital media has less to do
with lessons it learned from runaway e-mail
messages than with trying to replicate the
coffeehouse experience online.
“We don’t think about it as just a
marketing or public relations channel,”
Wheeler says. “This is about [answering
the question of] how do we extend the very
strong customer experience that we deliver
every day in our stores into these other
really relevant spaces?”
Reggie Bradford, founder and CEO of
Vitrue, an Atlanta, Ga.-based social-media
management company, says that strategy
has paid off. Starbucks ranked No. 11 in
Vitrue’s Top 100 Social Brands of 2009.
“I think what they’ve done is elevate
the entire experience away from just a cup
of coffee into, really, Starbucks being the
corner bar, and they’ve used social media to
leverage that positioning,” he says.
Starbucks maintains four primary
digital touch points:
A Facebook page, which it uses to
communicate with fans internationally
A Twitter feed, which serves largely as a
customer service channel
A YouTube channel, where the company
posts videos ranging from branded
content to short documentaries of its
charitable work
MyStarbucksIdea.com, a digital suggestion box where customers can submit
their ideas for products or services.
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“I think what they’ve
done is elevate the
entire experience away
from just a cup of coffee
into, really, Starbucks
being the corner bar,
and they’ve used social
media to leverage that
positioning,”
Reggie Bradford,
founder and CEO of Vitrue
myStarbucks App display
Wheeler, a Seattle native who has childhood memories of the original Starbucks
in Pike Place Market, declined to say how
much Starbucks spends on social media
every year. While not breaking marketing spending out by sector, Starbucks Chief
Financial Officer Troy Alstead did note in a
January earnings call that investors should
expect “significant marketing increases” in
the coming year. Wheeler does note that
social media was a growing percentage of
the company’s marketing budget. Just how
big is anyone’s guess, but she offers a clue by
quoting a colleague’s favorite saying about
ROI: “Keep the ‘I’ so small that no one asks
about the ‘R,’ ” she laughs.
Besides, she says, “as far as the developing and engaging and managing of
communities online” there are “much more
important resources than financial.” Those
resources, of course, are the people.
Wheeler leads a team of 13 staffers
devoted entirely to digital. (Her group rolls
up into the marketing department.) One
key to the Starbuck’s social media experience is that all those staffers are deputized to interact with customers online
directly. And while the company does use
outside agencies to monitor its platforms
and metrics—Blast Radius in Vancouver is
its digital agency; Omnicom Group’s BBDO
is its creative ad firm—no one from those
agencies is interacting with customers on
Starbucks’ behalf.
“One of the things we are diehard about
is that engagement in these channels has to
come from a Starbucks partner,” Wheeler
says. (Starbucks refers to all its employees
as partners.)
Even with its success on Twitter (more
than 700,000 followers) and Facebook, the
heart of Starbuck’s social media efforts is
MyStarbucksIdea.com, where customers
can actually influence what products the
company offers.
“When you work for Starbucks, you
can’t go to a dinner party or sit on a plane
without people first getting really excited
like, ‘Oh, I love Starbucks!’ ” she says, “but
then followed by, ’You know what you guys
should do?’ So it was really, I think, the
right point of entry for many reasons.”
MyStarbucksIdea.com launched in
March 2008. Since then, more than 180,000
customers have registered, and more than
80,000 suggestions have been submitted.
So far, 50 of those ideas—from bringing
back the Yukon Blend to creating an iPhone
app—have been implemented. There is
also a restricted section of the site where
employees can make suggestions.
The key insight that makes
MyStarbucksIdea a success also informs
its use of Twitter, says Brad Nelson, the
product manager who runs the company’s
Twitter and Facebook feeds.
“In many ways, customer service is the
new marketing,” he says. “If you can help
somebody solve a problem, they’ll tell their
friend, and then they’ll tell their friends.
That’s a great way for word of mouth to
spread.” Indeed, it’s the same approach that
has won high praise for companies like
Zappos and JetBlue.
Of course, a company doesn’t get to be
as successful and ubiquitous as Starbucks
without attracting some critics. Many of
these critics use social media like Twitter
to broadcast their grievances. Nelson will
occasionally engage them but says experience has taught him who to engage—and
who not to.
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“There are negative people who are being
reasonable and you can have a conversation
with them, and these types of people we’ll
engage,” he says. “If they’re not being reasonable
and just yelling, we won’t engage them.” For
example, last May Nelson began Tweeting with a
particularly negative blogger, eventually setting
up a phone call with the company’s director of
ethical sourcing. That blogger then wrote a post
titled “Starbucks, I done you wrong!”
Starbucks’ online success comes at a time
of transition for the company. In 2009, cashstrapped consumers traded down from $4
lattes to home-brewed coffees made with lesspremium beans. Starbucks also began to feel
the pinch of its rapid expansion throughout
the previous decade and was forced to close
hundreds of stores worldwide. There were
8,832 Starbucks stores around the world as
of September 2009, down from 9,217 a year
earlier. Revenue for 2009 dipped 6%, to $9.8
billion from $10.4 billion in 2008. First quarter
earnings released in January delivered better
news: Same-store sales were up 4%, the first
gain in two years; however, in an earnings call
Starbucks CEO Howard Schultz reiterated that
the environment was still extremely uncertain.
Success in social media hardly guarantees
offline profits, but Vitrue’s Bradford points
out an interesting result of all that social
media chatter: The word “Starbucks” is now
mentioned on social media 10 times more
often than the word “coffee.” In other words,
the brand has, in many ways, eclipsed its
own product.
“They are now the Kleenex of the category,” Bradford says. m
Find Out More @ MarketingPower.com
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To Serve Customers, Understand Them
From Social to Super Brands: Building Brands in the Digital Age
Events:
Advance Social Media Training Series
April 13-14, Philadelphia
Digital Centered Marketing Spotlight
April 15, New York
Webcasts:
Driving Customer Growth in a Social Economy
A Focus Group of Millions: Leveraging Social Media for Consumer Insights
Douglas Quenqua is a freelance writer in
Brooklyn, N.Y.
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