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Tag Archives: Coffee

The Beginning of the End For Starbucks?

11 Wednesday Feb 2015

Posted by Paul Kiser in Branding, Business, Communication, Customer Relations, Customer Service, Ethics, Public Image, Public Relations, Social Media Relations, The Tipping Point

≈ 2 Comments

Tags

*bucks, caffine, Coffee, coffee brewers, Coffee retailers, Oprah Chai Tea, SBUX, Starbucks, tea

WTF? Even Jasmine is disappointed

WTF? Even Jasmine is disappointed

There are always people who hate Starbucks. It’s easy to do. A person can find retail coffee brewing houses that make as good, or better espresso drinks, and the die-hard loyalty of Starbucks customers, like myself, can be obnoxious. Even the term, ‘barista,’ can seem pretentious to some.

Still, Starbucks has always done one thing right: exceed customer’s expectations. Note some of their highlights:

  • When coffee drinking was dying out with old people who were raised in the era of the peculator coffee pot, Starbucks revolutionized coffee drinking with espresso drinks that created a new generation of caffeine consumers.
  • When other food and beverage businesses were trying to get the customer out the door as fast as possible, Starbucks was offering free WiFi and encouraging customers to enjoy a non-work, non-home, ‘third place’ to spend time to relax and enjoy.
  • When the coffee/tea/snack menu was becoming boring, Starbucks re-designed their menu and name to become known for more than just beverages.

Starbucks has always tried to do a little more than their competitors, which is why they have stood out. 

But lately it seems Starbucks has fallen victim to the accountants and investors. This is to be expected. The average Fortune 500 or equivalent corporation last only between 40 to 50 years. Smaller companies have a much shorter life span.

“The average Fortune 500 or equivalent corporation last only between 40 to 50 years”

Typically a successful company manages become established and then after a period of time it catches fire. This is usually a combination of having a great idea at an unexpected moment. Customers often have a feeling of relief and joy associated with the product or service, a “WOW!” feeling. It can take twenty years or more for a business to have this kind of impact in a market.

If the business can survive the explosive growth phase, the next phase is coasting or reinvention. Coasting companies usually don’t make it to forty years. Competition is always ready to go after the market share of the leader who thinks they’re unbeatable. Anyone can copy and improve upon an idea.

However, the business that works to keep ahead of the competition by offering their customers something extra tend to outlast those who only copy them. Certainly, Starbucks fits this mold.

But at some point the accountants and investors start chipping away at a successful enterprise. They start by whispering, “We can save five cents per unit if we don’t do this. Why should we offer this, it doesn’t bring in revenue!” Soon managers are focusing on saving money to look good, not creating new sales.

“We can save five cents per unit if we don’t do this. Why should we offer this, it doesn’t bring in revenue!”

That’s when the wheels come off. As the company ‘saves’ money the customer begins to wonder why they do business with them instead of the competition. As revenue shrinks, investors get nervous, accountants ring the alarm bells and the pressure to do more with less boils the great people out of the company. At this point the fate of the company is set. The people left don’t know how to offer the unexpected to the customer and if they did, it would be against company policy.

Starbucks became forty on March 30, 2011. Today they are almost 44 years old. So where is Starbucks now?

A few years ago I noticed that most Starbucks stores took away all the trash cans from outside the store. Starbucks offers drive through service and outdoor seating a most of its stores, so it is obvious that outside trash cans are needed, but somewhere someone said, “Why do we offer to take care of people’s trash? It doesn’t provide revenue!” That was the first sign of a change in attitude.

This past holiday season Starbucks was again offering their ‘Sticker’ program for the holiday drinks, offering a free drink for every five holiday drinks sold. At least a week before Christmas Starbucks began running out of the holiday drink syrups. This was in contrary to past years when some of the holiday drinks were available until well into January. Why would Starbucks miscalculate how popular the holiday drinks would be, and how hard would it have been to order more from their supplier?

Of course, without holiday drinks, Starbucks saved money on the Sticker program. Obviously, an accountant projected the maximum loss of free drinks through the Sticker program and cut off the supply when the maximum benefit was reached in holiday drink sales.

The final evidence for me was subtle, but obvious.

Many Starbucks offer a ‘Puppachino’ (whipping cream in a kid’s cup) for people who have a dog. This is an off-menu free service and it caused our dog to go from barking at the Starbucks window attendant to quietly and anxiously anticipating her Puppachino. Today, our Puppachino was water in a kid’s cup with a little whip cream on top.

The simple change in a free service was a deafening moan of a company that is hemorrhaging goodwill from cuts to the veins of good management. No one would offer a cup of sticky, whip cream-laced water to their dog inside a car. It was a slap in the face of the customers. The manager is saying, “we can’t afford to offer this service, but we know you’ll bitch if we stop it, so here, pour this on your backseat.”

Starbucks is in full retreat and is following the spiral downward to be just another company that we will reminisce about in ten years.

A Cup of Like

26 Wednesday Mar 2014

Posted by Paul Kiser in About Reno, Branding, Business, Customer Relations, Customer Service, Employee Retention, Ethics, Human Resources, Lessons of Life, Management Practices, Passionate People, Pride, Public Image, Public Relations, Re-Imagine!, Relationships, Respect, The Tipping Point, Tom Peters, Travel

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Tags

Airlines, Coffee, hotels, Lady Gaga, like, people, Starbucks, tea

Grande cup of Like

Grande cup of Like

I don’t feel it’s appropriate for a business to ‘love’ its customers. Loving someone is a personal bond that shouldn’t be related to business, (unless you’re Lady Gaga, then you can love your ‘monsters.’)

However, I do feel strongly that a business should ‘like‘ its customers. When I go into a coffee house I can tell if they are serving drinks, or if they are offering a cup of like. Anyone can serve a drink, but serving like requires more than the mechanics of taking an order, knowing how much milk to put in a cup, and/or yelling, “I have a Venti Latte with two shots on the bar!”

My home Starbucks on 7th and Keystone in Reno, Nevada has ‘like’ down. They seem truly happy when a customer walks in the door. That doesn’t mean they don’t have their down days, but most of the time you will get more than your drink from the staff.

This is not what I experience when I travel. It’s easy to pick on airlines, because if there is one group of people who don’t ‘like’ their customers, it’s the air travel industry, but even finding hotel or restaurant staff that makes you feel liked has become harder and harder to do.

In fact, a business that likes their customer is so rare that a genuine friendly person stands out among the ugliness of customer service in most businesses. The opportunity to beat the competition is to simply like your customers.

The place to start is with management. Managers have to like their staff and like their job. If their not happy then how can the staff possibly be?

One more thought:  In a world of Twitter, Facebook, and Yelp, how can any business not afford to like their customers?

Starbucks Menu Makeover Launches in Reno

27 Monday Jan 2014

Posted by Paul Kiser in About Reno, Branding, Business, Customer Relations, Customer Service, Health, Management Practices, Public Image, Public Relations

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Tags

bakery, Beverage, Coffee, Food, La Boulange, Nevada, pastry, Reno, Starbucks, tea

Following the successful introduction of San Francisco’s La Boulange pastries in other cities, the Reno-area Starbucks will introduce the new menu on Tuesday, January 28, 2014.

The upper pastry case is where the most visible changes will occur

The upper pastry case is where the most visible changes will occur  (Starbucks at 7th & Keystone in Reno, NV, USA)

The food items are a continuation of Starbucks effort to expand its product offerings beyond coffee and tea beverages. Many of the pastries currently offered can still be found, although some have been transformed into mini-loaves (A.K.A. Loaf Cakes) rather than slices of large loaves.

The introduction of Savory Squares combines the lightness of a pastry around a omelet-type center (Ham & Cheese, Tomato & Cheese, and Wheat Spinach.) Starbucks will continue to offer the Breakfast Sandwiches, oatmeal, and items found below the pastry case, but this partnership with La Boulange will take the next step in offering specialty food to compliment its speciality beverages.

For more information on the new menu, click here to visit the Starbucks website.

(This article was not solicited, nor was any compensation offered in payment for it.)

Starbucks Siren Gets Facelift at 40

06 Thursday Jan 2011

Posted by Paul Kiser in Branding, Business, Customer Relations, Internet, Public Relations, Social Interactive Media (SIM), Social Media Relations

≈ 1 Comment

Tags

Coffee, logo, New Coke, Public Relations, Publicity, Starbucks

by Paul Kiser
USA PDT  [Twitter: ] [Facebook] [LinkedIn] [Skype:kiserrotary or 775.624.5679]

Paul Kiser

Article first published as
Starbucks Siren Gets a Facelift at 40
on Technorati

The problem with Social Media is that it sometimes gives a bigger voice to the reactive minority. Such is the case with the announcement made yesterday by Starbucks CEO Howard Schultz.

As part of several changes to move Starbucks forward for its 40th anniversary, the company is changing the logo for the first time in almost 20 years. They have simplified the logo by removing the words, “Starbucks Coffee” and the circle around the mermaid…technically she is a Siren.  She is bigger and she is now green (originally black.)

(Starbucks Web Announcement)

Based on some of the reaction on the web you would think that Mr. Schultz had just sent naked pictures of himself to Katie Couric. Among the comments on the Starbucks website were the following:

Starbucks Logos through the years

MimiKatz:  “Who’s the bonehead in your marketing department that removed the world-famous name of Starbucks Coffee from your new logo?”

Rbailer:  “…Why is that companies always take away products or change them when eveythings going along smoothly…”

Jaga30:  “…let’s not kid ourselves–Starbucks has never been the brilliant marketing mastermind of the Northwest.”

There were several comments of support for the change, but that is not what most media outlets and bloggers picked up…probably because comments of support aren’t as newsworthy as reactive comments.

The reaction could, and probably was, expected. The announcement was sent out in an email to all Starbucks Gold Card members and they probably have the deepest attachment to the status quo, as well as the most severe caffeine addition. Change and caffeine don’t mix, (remember ‘New Coke,’) so no one in Seattle should be surprised by the drama.

The controversy will serve to create free publicity resulting in increased revenue. The only thing that Starbucks could have done better to engineer more publicity would have been to put breasts back on the Siren… is it too late to make another change?

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Starbucks is Re-Imagining the business…again

22 Friday Oct 2010

Posted by Paul Kiser in Branding, Business, Communication, Customer Relations, Customer Service, Information Technology, Internet, Management Practices, Passionate People, Print Media, Public Relations, Re-Imagine!, Relationships, Rotary, Social Interactive Media (SIM), Social Media Relations, Tom Peters, Traditional Media, Travel, Website, Women

≈ 2 Comments

Tags

alcoholic drinks, Bars, Beer, Blogging, Blogs, Coffee, Customer Loyalty, Digital Starbucks, Executive Management, Free Internet, Free WiFi, Internet, Management Practices, Nevada, New Business World, New York Times, Newspapers, NYT, Public Image, Public Relations, Re-Imagine!, Selling, Social Media, Social Networking, Starbucks, tea, The Wall Street Journal, Tom Peters, USA Today, Value-added, wine, WSJ

by Paul Kiser
USA PDT  [Twitter: ] [Facebook] [LinkedIn] [Skype:kiserrotary or 775.624.5679]

Paul Kiser

This week Starbucks continued to add value to its stores and more Re-Imagining seems to be in the forecast. A few months ago Starbucks did the smart move of offering free WiFi for everyone (see article below) and on Wednesday they took it one step farther with a Digital Starbucks that features free web content if you sign on to their WiFi service while you’re in the store.

(Free WiFi at Starbucks)

Now when you use the free WiFi service in any Starbucks you can also read a digital version of the day’s Wall Street Journal, New York Times, or the USA Today. The New York Times requires software download of a reader, but the USA Today loads up its own reader and retains the exact look of the paper copy. The site also includes Yahoo! news and GOOD content.


In addition to news, the Digital Starbucks offers access to a selection of entertainment, wellness, business/career, and local online resources. There is also a page to access most of the functions found on the Starbucks website. It seems apparent that Starbucks has teamed with AT&T, the WSJ, NYT, USA Today, and several others to offer this value-added service. Recently all Starbucks stores received new labeled newspaper stands with the New York Times, Wall Street Journal, and USA Today in the top three shelves with the local paper given the bottom shelf. In my October tour of stores in Houston, Boston, Denver, and Reno I have seen more papers sold out than I have ever seen at a Starbucks store. Obviously the collaboration is a win-win.

A screen shot of the DG Wellness page

While some information has been sent out regarding the new online features most people have not caught on to the major remake of the log-in page and the new free media resources. That will change over time and I expect Starbucks will see a positive increase in store traffic as customers become aware of what they can access for free at their local store. I have already noticed high occupancy of the key ‘power’ tables (tables next to a power outlet) in almost every store I’ve visited since the free WiFi service started on July 1st.

Starbucks After Hours
The value-added virtual Starbucks is small change compared to what may be coming to some Starbucks locations. As reported in this Monday’s USA Today, the company has been testing wine and beer service at a Seattle location. The three-month remodel of a standard store resulted in a cafe-type look and feel, moving away from the glorified fast food feel of most coffee houses. The move is designed to generate more late day revenue when coffee sales die down. There is little doubt that local bars may find a Starbucks too much to compete with as it creates a middle ground for those like getting out in the evening, but seek a relaxed atmosphere free of loud music and single men on the hunt.

While I remained concerned that Starbucks is allowing accountants have too much say in store operations, I have to congratulate them on bringing value-added service and innovative ideas into the forefront. The winner is the customer … the only person that matters.

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Starbucks makes a smart move: Free WiFi

09 Friday Jul 2010

Posted by Paul Kiser in About Reno, Branding, Communication, Customer Relations, Customer Service, Information Technology, Internet, Lessons of Life, Management Practices, Public Relations, Re-Imagine!, Relationships, Rotary, Social Interactive Media (SIM), Social Media Relations, The Tipping Point

≈ 11 Comments

Tags

Blogging, Blogs, Circus Circus, Coffee, convention authority, Customer Loyalty, Executive Management, Free Internet, Free WiFi, gambling, Gaming properties, Grand Sierra Resort, hotels, John Ascuaga's Nugget, Las Vegas, Management Practices, Nevada gaming, New Business World, Public Image, Public Relations, Publicity, Re-Imagine!, Reno Gaming, Rotary, Social Media, Social Networking, South Point, Starbucks, The Atlantis, The Eldorado, The Peppermill, The Silver Legacy, Value-added, WiFi

by Paul Kiser
USA PDT  [Twitter: ] [Facebook] [LinkedIn] [Skype:kiserrotary or 775.624.5679]

Customer Loyalty: Paul Kiser in Starbucks style

Today I’m dressed like a Starbucks employee to honor the wisdom of the decision-makers at the famous coffee company to team with AT&T to offer free WiFi to all. They started it on July 1st. It is a smart move…a very smart move.

Why? There is one common aspect of every successful business and it is simply to give your customers a reason to love you. That’s it! Customers who love a service or product is an absolute ‘must’ if you want to build customer loyalty and business referrals. You can spend millions of dollars in advertising and not get the return that a company gets with requited love from their customers. With free WiFi Starbucks has found a way of creating value-added service that will cause many people to love Starbucks.

If you have a ‘butts-in-the-seats’ type of business and you want customers to: 1) frequent your location, 2) spend time and money in your business and, 3) be loyal to your business then free WiFi is one of the best ways to make it happen. Here’s what will happen for Starbucks over the next 12 months.

  • Starbucks will see increased traffic of laptop users (a ‘small’ market of people who will buy almost 200 million laptops in 2010)
  • Starbucks will see more repeat business
  • Starbucks will be more visible to more people
  • Starbucks will not need to spend as much on advertising and will get more social media publicity

All butts-in-the-seats organizations would like to experience these four outcomes in their business, so why don’t more places offer free WiFi? In brief, the answer is ‘accountant-think’, which is always short-sighted. The common rationale is one of two issues. First, instead of seeing free WiFi as an inexpensive way to add value to their service the accountant-think business people try to make it a revenue source. In Reno, Nevada the major hotel/gaming properties have been known to charge as much as $500 to ‘turn on’ WiFi in their convention areas and most of the properties charge around $13/day for guests to have access to WiFi. The result is that technology conventions go elsewhere rather than be charged for a service that they can get for considerably less (or free) in another market. The Reno gaming properties have boxed themselves in with contracts or dependence on the revenue source from WiFi, so they are now in a death spiral of losing more and more business or give up a piece of their dwindling revenue.

Last year I was in Las Vegas on a business trip and stayed at the South Point property. They charged a fee for WiFi, so I went to Starbucks to get online (my home account is with AT&T, so I’ve always had free access at Starbucks.) Afterward I picked up dinner at the Outback Restaurant next door and took it back to my room. South Point didn’t get me to stay on property, nor did they even get me to eat at in-house, simply because they didn’t offer Free WiFi. Is that a smart business move on their part? Nope, just good, solid accountant-think.

The second rationale accountant-think executives is that WiFi customers don’t have a revenue impact. In August of 2009, Erica Alini wrote an article for the Wall Street Journal (NOTE: the Wall Street Journal or WSJ is a historical archive of old business trends written by accountant-think reporters) that declared, “Coffee Shops Pull the Plug on Laptop Users.” For her article Ms. Alini cites three examples in New York that discussed limiting or eliminating laptops at a cafe or coffee shop. The most common problem seemed to be too many customers … what a tragic problem … and that some laptop users were purchasing minimal product. However, Ms. Alini admits that some places were using laptop users to ‘make the place look busy.’

A deserted restaurant is cause for people to avoid the business, so having customers, even minimal revenue producing customers, can mean more paying customers. My question is how much would a coffee shop have to pay people to sit and look like customers? Free WiFi is a small price to pay. I spend $10 to $15 per day at my Home Starbucks on Keystone in Reno, NV, USA. It will not make me a shareholder, but it is money I would not spend in one place, except for the fact that I am a captured customer. I also always meet with people at a Starbucks, so I bring in additional customers. The major factor in my customer loyalty is the access to free WiFi.

Starbucks has made a very smart business move with making free WiFi a value-added service for all and the return on the service will reap big dividends in customer loyalty and increased traffic (butts in the seats.) Starbucks customers have a new reason to love Starbucks and that is key to survival in today’s world. But don’t try telling that to the accountant-think executives running other stores and restaurants. They just won’t understand it … and I’m sure that’s okay with Starbucks.

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Re-Imagining Starbucks

02 Friday Apr 2010

Posted by Paul Kiser in Management Practices, Public Relations, Re-Imagine!, Tom Peters

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Tags

Coffee, Facility Planning, Re-imaging, Remodeling, Starbucks

Paul Kiser - CEO of Enterprise Technologies, inc.

One last discussion about Starbucks and I’ll cross it off my list.

When I originally planned to write about Starbucks it was to indulge myself in exploring “What if”.  I agree with Tom Peters, author of Re-Imagine! Business Excellence in a Disruptive Age, who thinks we need to rethink the way we do business.   I think it is important exercise for all organizations to look at where they’re at today and boldly experiment with new ideas, services, and products.

Tom Peters book, Re-Imagine! Business Excellence in a Disruptive Age

As I discussed in my last post on Starbucks,

(See Starbucks:  A Tradition in Surprising the Customer)

there is a need to constantly surprise the customer with value-added products or services.  Starbucks has a history of giving the customer a strong value-added product and service; however, the company has gone through a phase of retreat, which if continued will be a slow downward spiral that will eventually lead to the demise of Starbucks.

So the next logical phase is to leap forward with bold new ideas.  When I say bold, I mean the kind of stuff that leaves people firing Facebook posts and Tweets to their friends about the crazy new product, service, or experience.

Starbucks Next Generation
If I were designing the next generation of Starbucks locations. Here are some of the key elements I would consider:

  1. Maintain the anchor as a fresh Coffee/Tea retail outlet
  2. Expand the customer base with focus on Women and Business customers
  3. Value-Added changes that enhance the Third Place concept
  4. Increase traffic and time spent in store
  5. Diversify the revenue base in ways that make sense
  6. Develop partnerships that make sense, but in line with the Starbucks ‘feeling’
  7. Remodeling to improve the technology and use ‘Green’ building design techniques.

The Starbucks Center

Starbucks in Reno, Nevada at Keystone and I-80

I think most existing Starbucks locations are too small to initiate any advancement of a value-added service.   In addition, after five years any store layout becomes stale, so some type of remodel is needed.   My idea would be to take twenty percent of the existing stores and remodel them into three-story facilities. A sub ground level, a ground level, and an upper deck.

Sub-Ground Level
Part of this level should be a kitchen/storage area, but the rest could be:

  • Meeting rooms for public use or Starbucks Life Center programs*
  • Public office space (renting by the hour)
  • Kitchen area for grill type service
  • Hourly child care play room

*Starbucks Life Center would be a revenue-producing program of classes/seminars/training at minimal cost on any subject or skill; however, sales-type programs/training would be forbidden. This might be a program run by Starbucks or merely approved and schedule via Starbucks.

Ground Level
This level would be the main coffee/tea bar area with the following enhancements:

  • The Public area(s) would be known as Conversation Zone.
  • Noisy equipment should be recessed and sound deadening used to minimize intrusion into Conversation Zone
  • Electronic order pads in Conversation Zone.  Customers could order and pay via e-pads or at a self-order station.
  • Stores offering made-to-order non-traditional fresh grilled food would have a Maitre d’ who would oversee the Conversation Zone and assure quality of service.
  • The Drive Thru would offer drinks and prepared food only.
  • Whole beans/bulk teas and Starbucks specialty items (cups, etc.) would be in a gift store area known as the B&B store.

Top Deck
In my vision of the next gen of Starbucks, the top deck would be known as the Fourth Place.  Plants and partitions in some stores to create a pub-like feel would be one option, or a glass enclosed central deck with an open deck surrounding the central deck.  It could be reserved for parties, but mostly it would be a quiet area to drink your coffee, talk, and re-engage in life.

Partnerships
In addition to expanding the Starbucks store I would enlist key partnerships or new Starbucks Divisions that would create adjacent enterprises to a Starbucks location where the Conversation Zone/Top Deck could be shared.  One thought is a Wine or Pub Bar.  Another is a Children’s Library or a Children’s Experience Center where parents could sign their child up for a class that supplements the Public School curriculum.  The parent could relax with friends in the Conversation Zone while her or his child is taking a class.

Back to Reality
The point is not about the substance of the ideas, but about the need for every organization to periodically dream or Re-Imagine!   Customers like consistency and familiarity, but the also like to be pleasantly surprised. What will Starbucks look like in 2014?  I don’t know, but I believe they will either look boldly exciting and different, or they will be irrelevant.

Other Paul Blogs in this Series

Starbucks One

Starbucks:  A Tradition in Surprising the Customer

All Paul Blogs @

Paul Kiser Blogs

Starbucks: A Tradition in Surprising the Customer

30 Tuesday Mar 2010

Posted by Paul Kiser in Lessons of Life, Management Practices, Passionate People, Public Relations, Re-Imagine!, Tom Peters

≈ Leave a comment

Tags

Coffee, Starbucks, Value-added

Starbucks One in Reno

The survival of any organization depends on the ability to satisfy…no, surprise the customer.  Satisfying the customer is a major challenge, but surprising the customer separates the Disney’s of the world from amusement parks.   Surprising the customer takes many forms but it all comes down to offering a value-added service or product.

Paul Kiser - CEO of 2020 Enterprise Technologies, inc.

The economic definition of value-added is the difference between the actual cost of producing a product or service and the price the customer is willing to pay. However, author/speaker/ranter extraordinaire Tom Peters uses the term value-added to describe the satisfaction a customer experiences with the product or service that exceeds their expectations.  This is a point that most organizations (for profit or not) fail to understand.

The Lesson of Starbucks
Starbucks is a good example of a company that has traditionally succeeded in giving ‘value-added’ products and service.  Many people forget that in the 1970’s and 1980’s coffee was on it’s way out.  Younger generations were choosing sweet soda drinks and mocking their parent’s addiction to coffee.

While it was Peet’s Coffee that pioneered specialty coffee in the 1960’s, it was two of Peet’s customers, Jerry Baldwin and Gordon Bowker, who started a little company called Starbucks that copied Peet’s idea of selling quality specialty coffee beans.  But Balwin and Bowker couldn’t visualize how coffee could become a new staple in a world that was done with drinking coffee.

It was Starbucks Director of Retail Operations and Marketing, Howard Schultz, that saw how coffee could establish a new market that was almost non-existent at the time.   Schultz couldn’t convince his company that a retail specialty coffee outlet (not just beans, but fresh, made-to-order coffee drinks) was realistic.

The lesson of Starbucks is that Howard Schultz could understand how a customer could love the uniqueness of providing fresh specialty coffee when no one else could.  Somehow Schultz knew that he could provide a value-added experience to his customers even before there was a market of specialty drinking customers.  Peet’s coffee didn’t get it…even the owners of Starbucks didn’t get it…but Howard got it.

So what happened?  Like in every great success story the champion quit.  Howard Schultz quit Starbucks.  He started his own specialty coffee retail outlet in 1985 using coffee beans he purchased from his former employer, and then in 1987, Schultz bought Starbucks from his former employers and the rest is…well, a lot of brewed coffee.

Customers liked Starbucks because it was different, because it was a good product, because it was convenient, because it made them feel special, but mostly because the experience of Starbucks exceeded her or his expectations.  It was a value-added product that surprised the customer…and everyone else.

Next time: What’s next for Starbucks?

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