Starbucks’ latest marketing blunder: Value meal pricing
It is no secret that I frequently bang my head against a wall when I hear about Starbucks’ marketing.Â There was the breakfast sandwich blunder. The incredibly horrible Gold Card blogging screw-up.Â And now, the concept of Starbucks “value meals” (or, more accurately, what Howard Schultz calls “breakfast pairings at attractive prices.”)
What the hell are they thinking?
It must be hard for Starbucks’ marketing execs to see Dunkin’ Donuts and McDonald’s – both firmly in the “fast good” space – gain advertising traction. First, Dunkin’s taste tests “proved” that people preferred Dunkin’ Donuts’ coffee over Starbucks. Then, McDonald’s announced their new McCafe coffeehouses wth couches, music and wi-fi.Â I can only imagine how those campaigns made the Starbucks collective corporate cream curdle.
But guess what? Starbucks has never been a fast food joint that’s used price as a differentiator. Starbucks is a destination cafe where folks can get a good cup of premium coffee, plug in their laptop and enjoy the third place experience.Â Would I meet clients at a McDonald’s just because there’s a cafe? No.Â Would I curl up with my Kindle at a Dunkin’ Donuts? No.Â I would imagine quite a few of Starbucks’ loyal followers feel the exact same way. If the perceived value is there – and Starbucks continues to be an integral part of their customers’ daily lives – people will pay more for their coffee.
The problem is: Starbucks is harming their perceived value.
Why is Starbucks suddenly competing on price and announcing “breakfast pairings at attractive prices?”Â Â I’m not saying that Starbucks should ignore the fact that they’re in the marketing cross hairs.Â And yes, price is an important consideration in today’s economy.Â But what I am saying that there are many different ways to react to the situation.
If Starbucks hasÂ to promote the food (and I would argue that Starbucks’ mucking about in food options has been more of a distraction than a customer benefit) promote the healthy options menu.Â There’s a differentiator – discuss how Fruit Stella bar and how it’s packed with omega-3s. Discuss the Power Protein Plate and how it’s a great alternative for low-carb dieters.Â That’s a huge marketing opportunity that’s been lost – and that’s unforgivable.
Or if Starbucks really wanted to reinforce customer loyalty (and keep their existing users from trying less-expensive offerings,) why not make their existing coffee drinkers their customer evangelists? Why not focus on giving them the best possible experience rather than trying to pull an additional $25 for a Gold card membership.Â Or…and here’s a crazy idea…why not decide that customers are such a priority that they handle loyalty cards in-house rather thanÂ outsourcing the project? It seems strange to me that Starbucks – a company that built its brand on the customer experience – would outsource their customer loyalty program.Â It’s like hearing that Mommy loves you – and then being foisted off on a nanny for your day-to-day care. There’s a perceived disconnect between words and action.
Please Starbucks – as one of your loyal customers – know that I’m there for the coffee, the partners and the experience.Â Within walking distance of my condo, I can visit about five coffee places at 6:30a.m.Â I choose Starbucks – and have always chosen Starbucks – for a reason. It’s my “third place” home.
And as a fellow marketer, get your acts together. Your brand – and brand loyalty – is yours to lose at this point. You’re frustrating your customers, pissing off your partners and sending out incredibly mixed messages. Customers will forgive a corporation that goes through hard times, lays people off, and starts making changes to benefit plans. It’s not fun – but it’s part of business-as-usual in today’s economy. What customers will not stand for is for the “third-place experience” to be eroded just because McDonald’s did some media-savvy marketing and got under your skin.
Man up, Starbucks. Get over yourselves and get back on track. Your loyal customers are counting on you.