What Should Starbucks Do

I spotted this on Seth Godin’s blog.  Starbucks had an incredibly ill-conceived promotion where they mailed some fraction of their employees with an email coupon for a free iced drink, then told them to mail friends and family members.  Oh boy, a chain letter, no possible way that could get out of hand, right?  Well, it did, and as a result Starbucks canceled the promotion.

Seth opines that, were it his call, he would have notched the driver’s license of anyone who used the promotion and given them the free drink.  The business problem this solves is that it prevents someone from going to the 46 Starbucks within walking distance from, say, the Sears Tower and getting 46 free ice lattes or whatever it is Starbucks sells.  His rule #3 (“We never accept online promotions.  However, if you were scammed by one, have *a free premium which the company can give out almost at will*.”) is, in my opinion, a brilliant solution to this problem for a chain which doesn’t have it yet.  But it doesn’t help Starbucks since they can’t force the cat back into the bag.

Here’s my solution: for every customer who comes in asking for their free iced fraparamadingdong, tell them “We’re very sorry, that promotion has been abused so we have to ask you this: what’s your first name and the last four digits of your telephone number?”  Then make a show of writing it down, and give them the product.  The only purpose of this system is to keep honest men honest and to remind folks that there is no presumptive right to free Starbucks, the way that many college students have come to believe that there is a presumptive right to free music.  The information collected can’t be enough to make a person hesitate for fear of their privacy, but that plus the fact that it is recorded is just enough to make them remember “Oh, thats right, I’m being watched”.

Here’s the rationale: the impact of one scammer who realizes he can beat the system (and, if you think of it, there is no system to beat here) is one ice drink per store.  The stores are franchises so you basically evaluate the damage to their profits on an individual level, where 1 or a 100 ice drinks is pocket change (here’s the secret to Starbucks: no matter how much they charge you, making the drink didn’t cost more than 10 cents!).  The damage to the brand from having to put that sign up everywhere, on the other hand, is at literally many orders of magnitude above the individual store.

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One Comment on “What Should Starbucks Do”

  1. Deuce Says:

    Ever since they closed their stores for the three hours I feel that Starbucks has been on a downslide. Not because they closed for three hours but that time was to refine their focus and service, which didn’t take. In the perception of this consumer the new blend saves them money and takes away from the opportunity for me to get a different good flavor of coffee every day. Now I only go in if I want the same old thing. The other bullet point missed in their 3 hour strategy is service. Here in AZ its 110 deg every day in the summer and I switch to iced tea, which Starbucks offers an excellent blend, and I have to wait for the “Barista” to make 10 other drinks which all have 4 steps before he/she pours tea over ice and announces it to the world like its an big event. Starbucks has a great product but misses the mark when identifying the customers need. Some want the product and want to get on with their day, and some have the time to order the four course drink, wait for it, and sit around sipping it dreaming up new questions/answers for their next job meeting or interview.


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