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Brand & Strategy Brand & Strategy
7.2008
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Starbucks' Simple Truths
John Moore, author of Tribal Knowledge, on what we can learn from the marketing giant.

It's a simple experience that drives the droves back to Starbucks.

We all have our signature drinks—double tall vanilla skinny latte, easy on the foam.

It's replicated day after day. Baristas even concoct our daily quenchers as we walk through the doors.

In Tribal Knowledge, author and former Starbucks marketer John Moore attributes Starbucks' success to three basic truths:
  • Building a business, not creating a brand;
  • delivering remarkable customer experiences; and,
  • creating a workplace that fuels its employees' passion.
Moore calls these truths "tribal knowledge," and recently spoke with B&S about how to integrate them into your business strategy:

Brand & Strategy: How do you convince an organization—especially one with a small budget—to redirect money from advertising/recruiting to improving the customer experience?

John Moore: You need to be willing to focus on the quality of customer connections and not the quantity. Nowadays, most people are looking for a direct conversation with the companies with whom they do business. I suggest businesses find their happiest customers and work to develop stronger relationships with them.

If you work on developing meaningful connections with them, in turn they will evangelize your business to their family and friends.

To make this ideal real, imagine the kind of surprise and delight you would generate if your top executives each phoned five customers per week. And if you're scared to make those phone calls because you're not sure what you might hear—you especially need to make those calls!

Is "word of mouth" really a marketing strategy?

Word-of-Mouth happens whether you're aware of it or not. And if you're not thinking about what your customers and prospects are saying about you, you should be. Remember, word-of-mouth happens online, too. People go right to the Internet to research everything from a purchase decision to a job opportunity to potential college choices.

If you want to spark positive word-of-mouth, you must earn opinions from people. Even seemingly small details earn opinions—good and bad—in the minds of your customers. In Starbucks case, just call your drink sizes different names. Some people like it, some don't. Either way, it earns opinions from people and that results in word-of-mouth.

How do you get your employees on board?

I advise companies to think less about branding strategies and more about "being" strategies. Develop a business testimony about who you are, what you do, and why you deserve to exist.

Every organization must have a mission. And it shouldn't be one of those gobbledy-gook corporate-speak platitudes. It must be memorable, motivational, and actionable. Every member of your organization should be able to articulate what you do and why. Purpose and passion are what attract people—both customers and employees.

How do you increase high-touch interaction with your customers, especially if you have thousands of prospective customers with limited opportunities for face-to-face interaction?

High-touch treats customers as relationships, not transactions. The bigger your organization becomes, the smaller you must act in order to develop and maintain those relationships.

Social media, like blogs, actually helps small organizations appear bigger, and helps large organizations act smaller. Having a blog will force a company to have a conversation with its customers. You can learn a lot from interacting with and listening to your customers—both their positive and negative feedback. But if you're not confident about who you are and what you do, don't do social media.

Why is it so important that every employee sees their direct connection to the customer?

David Packard of Hewlett-Packard said, "Marketing is too important to be left to the marketing department." The truth is marketing is happening every time your employees interact with your customers. A happy employee will, in turn, make customers happy.

Your business has two audiences: your customers and your employees. How you communicate with each indicates how much you value them. Employees believe in a company in which they know what's going on and feel they have a say.

In the end, a business really has just three goals: to make money, to make employees happy, and, to make customers happy. If you are able to do those three things, your business and its brand will grow.

high protein thinking
Tribal Knowledge
Business wisdom brewed from the grounds of Starbucks corporate culture.

CZ Marketing
“Companies that put their money behind their brand and not their business fail to realize that the business is the brand.”

- Tribal Knowledge, p.6

“Starbucks learned the most effective way to spend its marketing dollars is not on making funnier television commercials but rather on making better customer experiences.”

- Tribal Knowledge, p.10

“The challenge for a company that chooses to open its doors—and grow its business—based on quality products and services and quality customer experiences is that it has only one shot to make a meaningful customer connection. Customers will overcome their aversion to higher prices if the product or service they are buying is well worth it.”

- Tribal Knowledge, p.32

“Growth was and is encouraged, and made possible, by wanting to meet the desires of customers more than wanting to meet sales or profit projections … Starbucks' steadfast drive to become the best coffee retailer has resulted in its being the biggest coffee retailer. It can often work out that way … but it never seems to work in the reverse.”

- Tribal Knowledge, p.51

“Needs are basic. Needs are rational. Needs are boring. Needs have been commoditized. Every unremarkable business seems to be in the needs-fulfilling business. Wants are emotional. Wants are aspirational. Wants are thrilling. Wants are where the profits are. Only truly remarkable businesses are in the business of satisfying customer wants by helping customers actualize their aspirations.”

- Tribal Knowledge, p.96

“Delivering on promises is not enough today. Businesses, big or small, must find ways to over-deliver on their promises, implied and expressly stated, to customers … The most important part of over-delivering on promises to customers is having conscientious employees who make over-delivering a part of their everyday on-the-job way of life.”

- Tribal Knowledge, p.103-104

“Brands are made possible by people because, unlike products and services, competitors cannot replicate a brand's promise, or their passion.”

- Tribal Knowledge, p.189

“Starbucks doesn't view profit and the maximizing of profits as business strategy. The company views profit as an outcome. The mindset at Starbucks is, profit happens as a direct result of doing everything else right.”

- Tribal Knowledge, p.225



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