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Has Online Social Media Failed Starbucks?

To start let's define social media for Starbucks. From a tactic point of view they deploy four discernable tactics:

1. Twitter: Mindless feeds veiled as cool employees hocking the latest beverage or card promo. Why anyone would want to receive a Twitter feed from a coffee company is beyond me but they have some 70K who do. Do they give away free coffee?

Starbucks twitter

2. Facebook: Typical corporate facebook page

3. Youtube channel: Social oriented videos extending the brand to be viewed as something more than just a coffee hack.

4. Idea Exchange: Online forum to vote on ideas to make Starbucks better

It's the Idea Exchange that my beef is with. The idea is that by tapping into the community of passionate Starbucks customers' you can leverage the wisdom of crowds. In theory the crowds identify and vote on ideas and as a result the best ideas would rise to the top thus propelling your companies offerings, and brand beyond all competitors.

Well my friends (as John McCain would say) it has been a failure. Don't get me wrong I think the idea of leveraging your customer community to drive co-innovation is a great idea, and has some merit. However; we have to remember that the wisdom of crowds is not always correct, and in fact some of the greatest innovations never would have been validated by crowds as they could not understand the innovation.

Let's take the Sony Walkman for example. A famous story goes that when the inventor of the Walkman showed his idea to potential customers no one understood the value of the proposed product. This promoted several in Sony to say that customers do not want the Walkman. To which the engineer replied "Sometimes the customer doesn't know what they want”. I'm paraphrasing but the story is well known in Sony circles as I used to work there.

In fact we need to understand who is actually participating in our social communities. Forrester points out in their latest research that only 21% are creators and some 37% are critics. The rest are inactive, join for the sake of joining, or just like to watch the show.

Picture1

So in reality the feedback we are getting from these forums is imited and may not represent the true base of the audience as we think it does, in fact it may represent more of a vocal minority which is not the wisdom we may want.

So back to my view yhat the Starbucks idea exchange is a complete failure. First let's look at the all time most popular vote getters:

#1 at 95K votes: Great Conversation @ Starbucks:

"My idea is simple - Starbucks does a lot of things well - good coffee, interesting locations. One of its challenges though I believe is to create a sense of conversation and community within its locations.

One way of doing this would be to use the power of media and wireless new media in particular to foster a sense of conversation about the arts, current events, etc. In other words to stimulate Starbucks patrons that wish to interact as part of a 21st century "cafe society" such as they have in Europe traditionally - people gathering together to discuss the arts, world events and culture.

For instance one of the ones that springs to mind is a new online program called "The Alcove with Mark Molaro" which is based in New York. They have wonderful conversations with fascinating world-class guests and it seems to me that this sort of program is the kind of thing that would foster subsequent conversation and community within Starbucks locations.

The key is to provide cultural leadership through media to promote conversation and community within Starbucks locations. That would be a quantum leap in terms of engagement and experience at Starbucks. Thank you."

You've got to be kidding right? Now for #2.

#2@58K Votes A Punch Card System

"From the My Starbucks Idea team: We have moved this idea into the review process! Please check our "Ideas in Action" section for updates.
Offer customers a free drink, after purchasing a set number of drinks. Similar to a punch card system or by tracking it thru their Starbucks Card.
- From a customer in Feb. 08"

This is the #2 innovation folks, a frequent buyer program. You mean that all the totaled salary for the brilliant marketing minds Starbucks must pay for never thought of a frequent buyer program. I wonder how much all that salary plus the cost of licensing the Salesforce Idea Exchange platform adds up to in order to come up with that brilliant concept. Which by the way I might add is still not introduced.

Now if the Idea Exchange was truly working what would it identify? Hmmmmmmmm let me think. How about a new coffee lid that works! This is why all this technology has failed. Here is a company that sells millions of cups each day around the world, and they have the worst lid. It doesn't work.

IMG00001-20090225-0826

The most basic element to the product delivery system doesn't work because coffee spills allover you, your car, everywhere. What do the brilliant minds come up with in cup land? A green stick to plug the hole in the lid that doesn't work. What does the great Idea Exchange say about it (40 votes).

My idea Starbucks

Now lets look at Dunkin Donuts. Same Twitter and Facebook approach. Although the YouTube channel is really more about promoting Dunkin Donuts coffee, and no Idea Exchange. However the lid at Dunkin Donuts works. Hmmmmmmmmmm wonder if there is a correlation somewhere here.

What is working for Starbucks? Building a community the old school way. Its apparent that local employees are now trained to know all their regulars' names, and there is a pointed outreach into local civic groups to get involved with local activities. Old school in that they want the store to become part of the fabric of the local community, just like the coffee shops of yesterday. Imagine that. No fancy YouTube channel, no Twitter, no Facebook, and certainly no Idea Exchange. Just “Good morning Ed. Venti drip bold, with a green thing right? Nuff said.

Join The Conversation

  • Mar 12 Posted 8 years ago AxelSchultze (not verified) Royn - fully agree with you in the way you are saying "A new appreciation for what they are trying to accomplish"

    Your second line however tells one thing: "Hey Starbucks thanks for getting engaged - still your coffee is not right for me." I think this is touching a very interesting point: What can Starbucks learn from the "Non Customers" ;-)

     


  • Mar 12 Posted 8 years ago RyonHarms After reading Matthew from Starbuck's post I'm not so sure I buy the argument that Starbucks has failed in the social media space. I mean read the comment that he wrote. Respectful, unconfrontatinal, yet pursusasive and lucid. He was also the second one to comment which means they are on top of it. Because of that argument I have a new appreciation for what they are trying to accomplish. 

    Having said that, I still think Starbucks coffee isn't all that great and likely won't be going out of my way to stop by.

  • Mar 11 Posted 8 years ago PascalSilberzahn (not verified) Alex, reducing the management failures of Starbucks to the microcosm of social medias is the wrong approach. As a German (you are german, aren't you) you should know that the banks would have thrown out the managers and board of a company this big long ago. Social media tools used by Starbuck helped  customers become so self centered and comfortable using the coffee shop as their second office they didn't bother to warn the company that it overexpanding would hit an an iceberg that would rip a huge hole in its business model.  Starbucks third executive jet is now being sold on the web.  Since you indicate in previous posts that you appreciate advice from used car salesmen, ask your used aircraft salesman for details.  
  • Mar 11 Posted 8 years ago AxelSchultze (not verified) Edward, I am wondering too. You analyze Starbucks' social media initiative but you focus on just one element. It feels more like an "opinion".

    Let me share with you how we analyze a social media presence:
    1) Mapping analysis to understand the size of the presence and adjacent places and spaces of the eco system. This is not only one place but the eco system as a whole.
    2) Build a sentiment analysis to identify the main aspects of the conversations. Need to understand the issues and reflections from the market.
    3) Analyze the brand presence correlation with the conversations. The brand engagement in the eco system
    4) Analyze the respective competitors. Compare them, develop a threat analysis and risk profile

    THEN we have a basis to understand a possible success or failure.

    Obviously this is only possible for large companies - but then there is a large brand at stake and worth while to dive deep.

     

    @AxelS

  • Mar 9 Posted 8 years ago MatthewGuiste Mr Brice,

    Thank you for your thoughtful, if to me a bit one-sided, take on our social media efforts to date.

    Two points about MyStarbucksIdea, which you call Idea Exchange.   

    First, the main benefit to our decision-making from MyStarbucksIdea is not necessarily from brilliant new ideas—coffee is a relatively simple business after all—but from prioritization.  Analyzing the site carefully yields insights far beyond what jumps to the top of the heap on a given day.   One small example of the type of action this can lead to:  of course gluten-free products had been on the radar screen for a long time, but the response on MyStarbucksIdea has led directly to fast-tracking development of our first gluten-free products, which are coming soon.  I think this direct link from input to action is why Forrester Research, in fact the very same researchers that developed the social technograph profile you reference, awarded MyStarbucksIdea a Groundswell Award late last year.  One other note: we have the luxury of more than 150k community members, which I think helps us edge around the problem of who is participating to some degree, but it is a good point, you have to look carefully at the feedback from a UGC site.

    Second, the other key benefit of the site is dialog.  We get immediate feedback on every change and a vehicle to give complete and contextual information BACK to the community members most interested in a given issue or product.  This alone makes the site worth it in my book.

    I will definitely agree with you, however, that what happens in the stores is more important than what happens online.   If we fail to build community in the stores, no amount of interweb magic can offset that.

    Keep watching us and feel free to contact me directly if you’d like to discuss any of these issues further...

    Matthew Guiste
    Starbucks
  • Mar 9 Posted 8 years ago JerryB (not verified) FYI, it's "hawking the latest beverage."  Hoching is what you do when you want to spit a loogie.

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