The importance of being good

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Last week Chartreuse discussed the importance of the overall experience to certain brands like Starbucks Coffee.

One of the most interesting business fights to watch is the one between Dunkin Donuts and Starbucks.

What really makes it interesting is that Starbucks is not really fighting back.

Because they know something the Dunkin Donut executives don’t.

Nobody goes to Starbucks to buy coffee.

People are buying the experience.

Because of that Starbucks is able to successfully sell music, movies and practically anything else they want.

In the comments, a discussion ensued on how Starbucks successfully leverages that brand and how it applies to other comapnies. I said...

So sell the brand. Sell the experience.

Nike’s batting gloves are crap. Franklin, the lower-class sporting goods maker, makes a much better product. But Franklin’s considered low-end and Nike is hip and all the kids hang out there. So guess which gloves all the kids want? .Watch a pro game closely and be amazed at how many pros wear Franklin—they want the better product and screw the image.

Starbucks doesn’t make great coffee. People who care about coffee don’t go there. People who care about Starbucks do. And then they pretend they care about coffee.

...

You still need to be good. You just don’t need to be great.

Starbucks is good. Nike’s batting gloves are good. They just aren’t great. But the masses don’t care.

Chartreuse replied...

It’s the Brand that matters, not what they do. What you failed to metion was that they can do practically anything with the brand, as long as it’s the best. And the truth is, fowill think it’s good anyway.

And finally, me again...

Future extensions don’t have to be the best. They simply have to be better than average. People will assume they’re the best beacuse of the strong brand identity. ... The music they sell is all pretty good. Some of it is fantastic. But it’s not all the best.

So today, I read the news via Brand Autopsy that Starbucks is shutting down the CD burning stations they have in some stores. In an email exchange with Brand Autopsy, the reporter says...

Starbucks has been successful because it made the coffee experience uncommonly better. So uncommonly better that we gladly pay a premium for it. Using that mindset, the Starbucks CD-burning stations have been unsuccessful because they failed to make the music download experience uncommonly better.

The Starbucks consumer might buy a CD at Starbucks because the compilation is good, the artist is good, and the CD has the Starbucks brand. But when they burn a CD, they aren’t getting the Starbucks experience, they’re getting one of their own creation. And they can do that at home with downloaded songs and the CD burner on their computer.

Bill Conerly
May 26, 2006 10:22 PM

Before commenting on Starbucks, I suggest that you go sit in one for an hour. I do that about once a week, to get away from the office. Here's what I see: about 90% of the customers are take-out. Those of us sitting at tables are a small minority. Most people get in, get out. So I don't think it's the atmosphere. In fact, the few Starbucks drive-thru's I've seen have been very busy. So why Starbucks? When I meet a friend who suggests we go to a local shop (typically motivated by an anti-corporate mentality) I see poorer service; it's significantly slower, even if the line is shorter; the server has to be told two or three times what you want, because he/she is not focused. Starbucks reminds me of McDonald's--fast service with a consistent product.

sean malone
May 29, 2006 11:34 PM

Bill, I agree with you on the McAnalogy. I also agree with Adam. His point about 'experience' goes beyond a 1 hour chill session on the T-Mobile HotSpot. It is just as much the drive through, or the quick in-n-out double latte. The experience is any interaction or 'touch' of the brand. It may be as simple as knowing that if I go to Starbucks, I can do so and make the meeting I have in 5 minutes because of the experience. Starbucks is successful because it's quick, predictable, known, convenient, good enough... Don't get me wrong. I'm a Pete's guy through and through. My point is that the experience is *any* interaction you have with a place, not just the kind you're referring to.

Oiya
June 5, 2006 3:41 PM

I guess I must be one of the few persons who actually go to Starbucks to buy coffee. I sure as hell don't go there because of "the experience":

Adam Kalsey
June 5, 2006 3:55 PM

Oiya: Sure you do. If you were in a new town and there was a Starbucks and no-name coffee shop sitting across the street from each other, which would you choose? If you said Starbucks, then you're making that choice based on nothing more than the brand. I admit, I'll often do the same. Starbucks is easy to find, and they're a known quantity. They have consistantly decent coffee and I'm not surprised by the price, the sizes, or anything else, even when going into a new town. That's what the Starbucks brand image is, and they deliver on that promise. It's the same thing that makes fast-food resturants popular. They might not be the best, but they aren't bad, and you know what you're getting.

John Andrews
July 21, 2006 11:20 PM

I don't want to come across as someone who pretends to understand branding, but I am definitely a Starbucks consumer. I practically live there. The coffee is good. Not great, but super consistently good. I try local places all the time (my town has over 55 drive up espresso stands, and dozens of shops). One thing I have learned is I dislike disappointment more than I like perfect coffee. There is something very off-putting about getting hassled at the start of your morning when all you want is the same stable comfort you've come to depend on. When Starbucks serves Verona I am disappointed (I dislike it). When the baristas found that out, they offered me a French press of whatever I wanted any time they have Verona as the daily brew. Told me to just ask for it. Same price. Try that at the local place. I pay about $2 for 20oz of quality product, delivered with a high level of customer service, in a well controlled environment, in any city I happen to pass through, and $0.54 for a refill. Thank you Starbucks. That's why I go there. That's why I spend about $100/month on my Starbucks card.

Jeff
October 18, 2006 8:48 AM

I used to think that Starbucks charged too much, until I found out that all their employees, even part timers, receive full health benefits. Now I don't mind paying Starbucks prices, if the extra cash goes toward helping good working people from baristas to execs afford quality health care for themselves and their families. The problem with America is that nobody wants to pay what it costs to live in a great country. It's all about greed, low prices, and avoiding taxes. We have changed from a society that values work to a society that values investment. Why shouldn't ordinary working people be able to afford basic necessities like decent housing and health care? The second American Revolution is coming. In the meantime, I say, "Drink Starbucks! Don't shop at Wal Mart!" You may pay a little more but doing your part to advance to a better society is worth it... and good for your heart.

Chiro
November 10, 2007 7:50 PM

Being good enough, better than average actually .. consistent experience at each location, providing better than average product (in this case java) .. that makes a profit .. going the ultra-extra mile and aiming for excellent/best .. law of diminishing returns kicks in and long-term profitability erodes .. my 2 cents (which would not go far at any Starbucks)

Tobey
January 4, 2008 4:24 AM

I agree that the quality and the taste of Starbucks coffee isn't really stunning. It's just that you can't get the coffein-cocktails anywhere else. And if you try to go to McCafé, it tastes like SlimFast. I confess that I go to Starbucks quite often, however sometimes I'm asking myself why :-) What I respect grately is the marketing. The made it to tell people that their quality is decent and that the coffee-pickers are treated fair. And they're just mushrooming the cities. It's almost like a plague, but a very genious one. The brand performs well. And I think Starbucks is excellent, high above average. Why do people spend so much money on simple coffee otherwise? Cheers

Adam Kalsey
January 4, 2008 10:53 AM

Tobey: Don't let the "Fair Trade" act fool you, though. For all their bluster about making sure that they're helping coffee growers by buying Fair Trade coffees, they don't buy much of it. I've seen figures putting the amount of Fair Trade coffee sold at Starbucks at less than 1%.

This discussion has been closed.

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