Starbucks: Did They Jump the Shark?

Note: we are jumping on board with Jay Ehret and company over at "The Marketing Spot" to provide commentary (and advice) on Starbucks and its ongoing efforts to remake, fix and improve its business.

The image at left is the July 2004 issue of Fast Company. As you will note, the lead cover story is about Starbucks. "Thinking Outside the Cup. Surprise! Starbucks is making a bold push into music."

The question, as we sit here in 2008, is: was it a bold push, or an ill-advised push?

The Fast Company article postulates that Starbucks foray into music, providing downloadable music for purchase in its retails outlets, would in disruptive fashion render traditional music vendors such as Tower Records, HMV and Virgin Megastore obsolete.

"What Schultz had come across was a group of music stores with something of a cult following in the Bay Area. Hear Music was one of the first stores in the country to introduce the now-universal concept of the 'listening station.'

In its intimacy, quality and customer focus, Hear Music must have reminded Schultz very much of his own company. And the rest of the music industry must have looked a lot like Maxwell House."

"We never dreamed we'd be sitting on the unique opportunity we're sitting on now," he said. "We just saw that they were doing for music what we had done for coffee."

Unique? That would appear to have been a stretch. What each player had done was innovate. But then Starbucks attempted to replicate, instead of innovate.

"What you're left with is this very broad audience, made up of the core Starbucks customer, who loves music and can't find it, Schultz said. "We have a unique opportunity to take advantage of this."

No doubt, the psychographic potential of the brand extension was alluring. But what about iTunes and other online music vendors? Did Starbucks underestimate their potential and power ... their competitive threat? Were they, perhaps, caught off-guard?

There's a phrase in the movie and TV business--"jumping the shark." It's that fateful, irreversible moment when the program, or series, goes too far. It strays too far from its core concept or storyline ... and loses credibility. Typically, such shows do not recover.

In my estimation, this article from July 2004 captures for posterity that moment when Starbucks jumped the shark.

Cut to February 26, 2008. Starbucks closed every single one of its stores for three hours. They spent that time getting back to their essence, their core. They took 3 hours (times 7,100 stores) to train their baristas (employees) on how to make and serve great espresso. Here's the corporate news release on this event. This equates to 500,000 hours of training time.

I applaud Starbucks for this tough, but necessary, refocusing intiative. Time will tell its impact. Still, I remain a devoted Starbucks fan and customer, and I wish them well.

Hail to the Marketing Geniuses at Saks Fifth Avenue!

One of my favorite things about being in the marketing business is the chance to do really out-of-the-box promotions. I’m always on the lookout for unique ways to - literally - make people stop in their tracks and pay attention to clients.

Today, my beloved Saks Fifth Avenue in New York City made ME stop with their “Want It” campaign. Here’s why I think Saks’ marketing rocks:

> They’ve clearly defined tourists as their target audience for this campaign and are not trying to be all things to all people.

> Their promotional window is tight enough to generate real don’t-miss-out enthusiasm.

> Their design is impeccable and features Dutch graphic artist Piet Paris. (Note: I haven’t heard of him either. What matters is that Saks is turning advertising into “art” and thereby increasing the cache of their own brand.)

> They’re wrapping a NYC double-decker tourist bus with said impeccable design and taking tourists to / from the usual sightseeing locations to Saks’ flagship store. Tourists will also be greeted by Saks’ very own guides – donned in “Want it” attire – who will offer advice on the latest trends…and just might mention where to find them.

> They’re partnering with the usual tourists stops to offer very UNusual experiences to Saks customers, including the opportunity to ring the closing bell at the New York Stock Exchange and private tours of the Whitney museum.

This is a terrific campaign. It’s unique, it’s MULTI-LAYERED (a trait our loyal readers know we love here at Marketing Genius), and it’s fun. So kudos to the Marketing Geniuses at Saks Fifth Avenue. We salute you!

Welcoming a new Blogmeister!

David Pray, our neighbor and friend, has launched his first blog. Head on over to Dave's 209 Capitol Street blog and check it out. Give him a hearty welcome and let him know that you are part of the Marketing Genius community.

I think Dave's approach, which is to chronicle a development project with a blog, telling the stories of the places, people and processes as they unfold, is unique and appealing. Naturally, some of the projects will have compelling historical backgrounds, as well.

Adding an additional marketing touchpoint to his development consulting practice, Pray Works, Dave plans to give each project its own separate and distinct blog, with cross references and links as appropriate.

Cool concept, Dave. Best of luck--and welcome to the blogosphere!

Kanawha Valley Building - Where We Work

This is where we work. The Kanawha Valley Building is a "Grand Old Dame" of Capitol Street's historic Village District. The building was completed in 1929, just as the nation's economy plummeted into the Great Depression. How's that for timing?

Contrary to popular belief, the Kanawha Valley Building (not Laidley Tower or One Summers Square) is the tallest building in the city. Maple Creative and PrayWorks occupy the 13th floor of this historic office tower. SunTrust Bank is on the ground floor today and has the building's marquee. At one point in its history, Union Carbide Corporation occupied all but a few of the 20 floors. We thought you might like to see our humble abode.

Tell Us!

Considering the fact that a whopping 75% of consumers rate “word of mouth” as the #1 influencer of their purchase decision, what is your business doing that makes people talk?

More on E-Mail Overload

The gurus at Silverpop continue to provide coverage of what's coming in email inbox technology. Here's an excerpt from their newest article:

Is Email Taking Over Your Life?
Another guest posting that contemplates the future of email, from my colleague, Scott Voigt...
From Scott:It dawned on me the other day, that I spend more time with my inbox than I do with... well... anything! Seriously, this is sad, but totally true. Staring at Outlook (or at least having it stare at me) for more hours than I spend with my wife and daughter, what's up with that? Even worse, given the inordinate amount of time that I allocate to the inbox, I still don't feel in control of it. Calgon, take me away!

And here's the link to the full article:
http://emailmarketing.silverpop.com/archive/2008/02/is_email_taking.html

Heavy-Duty Ad Clickers Could Misguide Marketers

Some snippets from a great piece yesterday from the folks at The ClickZ Network. See the full article here: http://clickz.com/showPage.html?page=3628429

A study shows a disconnect between the number of clicks on ads, and the number of people behind the clicks. As a result, advertisers and marketers are advised to find ways other than clicks to optimize performance-based campaigns.

The report, "Natural Born Clickers," commissioned by Starcom and AOL's Tacoda and conducted by comScore, finds 16 percent of Internet users click on 80 percent of ads, and those people aren't representative of the general online population.

"Close to 70 percent of the online universe doesn't click at all," said Greg Rogers, VP of sales strategy at Tacoda.

Heavy clickers, classified as someone who clicks on an ad four or more times in a month, comprise six percent of the online population and 50 percent of the clicks. Moderate clickers, Internet users who click ads two to three times per month, account for 10 percent of the online population and the additional 30 percent of clicks.

Demographics behind the heavy clicker:

They are somewhat equally divided between male and female and between the ages 25 to 44.

The typical household income for heavy clickers is below $40,000.

Online, heavy clickers are also more likely to visit auctions, gambling, and career services sites.

"Heavy clickers spent five times more time online than a non-clicker, which to me is astounding," said Rogers. He suggested heavy clickers respond to ads more often because they're exposed to more ads.

Food for thought if a significant portion of your marketing programs include banner advertising.

Google's Whimsical Logos

Don't you love how Google posts special thematic or seasonal variations of its logo every so often? I surely do. They call them "Google Doodles." It keeps it fun and interesting. Here's their special Valentine's logo below:

Actually, you've probably seen it in context already on Google, considering the fact that 200 million people visit each day. Kudos to Dennis Hwang and the design team at Google and to its leaders who see the value in doing cool, fun stuff like the Google Doodles!

Fun With Color

Pantone, the gurus of color, have created this fun little companion site. It takes color way beyond the geekdom on PMS numbers, swatch books and color wheels. I think the Colorstrology site is fun and makes for a nice extension of the value of their brand. By the way, I am "Oil Blue."

What might we learn from this example? What can any company, especially one that deals in analytic, left-brain thinking, do to add a little right-brain element to its brand?

Wait just a minute. Why bother? Isn't this stuff just wasteful and goofy? [I hear skeptics.]

No. The emotions and brain-chemical reactions that are generated by things like powerful design and rich stories (and yes, even humor) make things more memorable. It opens the brain and enables deeper impact.

Design, Story & Humor ==> Brain Chemical Release ==> Enriched Experience & Enhanced Recall ==> Willingness & Openness ==> Sticks in Memory

That's what psychologists have learned. And it's what great storytellers have applied. Just read what Chip and Dan Heath or Richard Maxwell and Robert Dickman or Daniel Pink have written. They're all trying to help us understand the power and importance of right-brain connections in memory/recall, mood and persuasion.

In a nutshell: things like Colorstrology and the Tide Talking Stain can help your brand become more memorable and can make your marketing messages more persuasive. More than ample reasons to complement your marketing with some R-Brain accents!

Influence of Video Games on Design

The photo at left shows a sample interior of a new Mercedes Benz concept car. Notice something missing?

The Benz does not have a traditional steering wheel. Instead, there is a joystick. Ready for that? Are you ready to navigate rush-hour traffic on the freeway at 70 mph via joystick?

The next time you are about to nag your kid to put away the X-box or Playstation, pause for a second and consider that he just might be sharpening his driving skills. Or maybe he's cultivating skills that will be the driving elements of success in the next-generation workplace.

What if the future of software and productivity tools for business are more like video games and less like documents? Perhaps the new business tools will emulate 3-D spaces and virtual worlds, instead of mimicking the paper trails of old.

It could happen. In fact, I kinda hope it does.

More on the Monetization of E-Commerce Relationships

Thanks to our very good, very smart friend, Paul Helmick of Premier Strategies, for sending this article from "Mashable" - the social networking news site.

As a publicly traded company, SNAP Interactive (formerly eTwine Holdings), the company behind Facebook apps “Meet New People” and “Are You Interested?” is required to file their earnings every quarter with the SEC. Thus, we’re able to get a peek into how much money Facebook applications are actually generating.

SNAP reported $388,000 in revenue for their fourth quarter, which was up from $35,383 in the third. They attribute the growth to their applications: “Are You Interested” finished December with 5.2 million users, while “Meet New People” claims 350,000. Thus, it can be determined that each user was worth about 7 cents in revenue to SNAP in the quarter, or about 28 cents per year (388,000/5,500,000 * 4).

As deals become more common in the Facebook application space, the question becomes how much is a user worth? As a publicly traded company, SNAP is sporting a market value of around $10 million. At its current pace, the company looks to pull in $1.5-$2 million in revenue this year, meaning its price-to-sales ratio is 5:1. If you assume a 5x price-to-sales ratio, that would mean each one of SNAP’s users is actually worth around $1.40 (each user pulls in $0.28/yr, if the company is valued at 5x sales, you arrive a $1.40 per user valuation).

As for SNAP Interactive’s stock (STVI.OB), shares are up more than 400% in the past 12 months. However, it’s important to note that the company is traded Over-the-Counter (OTC), which means it’s highly risky and speculative. Nonetheless, it’s an interesting company to watch, if for no other reason than it lets us see the actual financials of Facebook applications.

Considering recent deals in the Facebook application space reported in the low-seven figures for apps with a few million installs, $1.40 per user seems to be a reasonable approximation of what an app user is worth, at least for apps with an advertising-based revenue model.

Please let us know if you see addtional information on this topic of increasing importance. We'd love to have it to share with the community of marketing geniuses.

Words of Wisdom

“I’m always searching for emotion in advertising. In an age when most products aren’t very different, the difference is often in the way people feel about the product.”


Advertising legend Philip Dusenberry, the man who coined the phrase “Choice of a New Generation” for Pepsi. Dusenberry was inducted into the Advertising Hall of Fame in 2002, and passed away in December at the age of 71.

Xerox New Brand Logo

Fellow Mapleonian Justin Hylbert pointed out to me a few days ago the new branding from Xerox. I think it is a nicely executed, much needed update for this longstanding great American brand. Obviously, the company's business has changed and evolved tremendously, since it became Xerox in 1961.

For those marketing geniuses who like to know the in's and out's of the design strategy, plus some more about the brand essence, check out this info from the Xerox Web site. Here's a nice case study of the rebranding project from the New York Times.
Naturally, some folks are not so crazy about the changes, as posted here and here (see comments).

Now, what do you think?

Overcoming Inbox Overload

Last week, I shared information from Jugglezine with observations on e-mail overload.

If you were troubled by that, take comfort in the fact that some of the world's leading technology companies and e-marketers are keenly aware of the problem. In fact, they are working feverishly to develop new technologies and solutions to improve, if not reinvent, the e-mail inbox. One of the companies that I frequently go to for information about the world of e-mail, electronic communications and online marketing is Silverpop. The following article from Silverpop CEO Bill Nussey and his head development guy provides a good overview of what's out there, what's being evaluated and what is coming.

Contemplating the Future of the Inbox
I've been inviting my colleague, Scott Voigt, our head of product marketing, to put together some guest blogs over the last few months. I am pleased to include his first blog entry below...

From Scott:A few months ago, the Internet was abuzz with the meme of Inbox 2.0. A couple of articles in the Wall Street Journal (here and here) and a post in the Bits section of The New York Times, pointed to a future where the inbox would begin to take more proactive role in managing communications, acting as much like a social network as it does a hub for receiving good ol' SMTP messages. Leading the charge on this new frontier are a number of start-ups (Boxbe, ClearContext, and Xobni to name a few) that are, in essence, using technology to help consumers manage their overload of email. More recently, we've seen some of the big inbox providers indicate that changes were indeed on the horizon. To wit, at this year's CES, Yahoo's Chief, Jerry Yang demonstrated a future version of Yahoo! Mail that included a "simplify my inbox" button, which, once clicked, would reorder messages based on "people that are important to me."

Here's a link to the full text of the Silverpop blog post.

Frankly, I am looking forward to the next-generation inbox. From my perspective, it can't get here soon enough!

Hidden Logo Design Elements: Hershey Kisses

With Valentine's Day coming soon, we have a sweet little brain teaser for you. Can you find the hidden design element in the Kisses logo?

Yes, we know that you are now suffering from an insatiable chocolate craving. Sorry 'bout that.




How many times have you looked at the Kisses logo? Have you ever noticed anything special about it, aside from the letters, the colors or the word itself? I have to admit that even though I've eaten my fair share of Kisses over the years, I had not noticed the wonderfully subtle design touch that is embedded inside the logo.


Here's another photo that may help you find the hidden design element. Don't worry about the product itself. Forget about the mini cookies and the confetti sprinkles. Just see if you can find the unique, hidden element within the "Kisses" logo.


If you like these visual puzzles, we have several in the blog archives that you will enjoy.


Have fun ... but please do not blame me if you are unable to look at a logo the same way ever again.

KFC Invades the Super Bowl: Fowl Play?

On the eve of the biggest game in football, Kentucky Fried Chicken is making news without buying one second of advertising. KFC is promoting their new line of chicken wings by announcing they will award a $260,000 scholarship in the name of the “athlete or on-field entertainer who is filmed doing the chicken dance in the end zone for at least three seconds.” (Trivia: $260,000 is what it would cost to buy three seconds of airtime during the game.)

Critics, however, are crying “fowl” (I know…) saying that KFC is guilty of “ambush marketing” and isn’t playing by the rules. Marketing geniuses: What do you think of KFC’s strategy? Guerrilla brilliance or rotten egg?

P.S. Despite the coverage KFC has received leading up to the game (worth well beyond $260K, by the way), don’t count on seeing any touch down arm flapping. It’s been reported that the NFL will fine any player who participates.

See the full article at http://adage.com/article?article_id=124768

Too Much E-Mail?

If e-mail traffic continues to increase at its present rate, the average corporate e-mail user will spend 41 percent of the workday managing e-mail messages in 2009.

Whoa. That's disturbing. If you are anything like me, you sometimes feel like you're drowing in e-mail? In fact, I feel like e-mail has nearly reached the point of ineffectiveness in many respects.

Here's help, courtesy of a recent article in Jugglezine. [By the way, I have to give another well-deserved plug for Jugglezine. It is one of the best, most relevant and well designed e-communications that I receive.]

Seize control
In this age of e-mail gone wild, is it possible to escape its ever-widening reach? Sure, you can turn off the sound that signals the arrival of e-mail to prevent distraction, and you can set aside several time blocks each day to address e-mail instead of checking your inbox constantly.

But those practices alone won't cut down on the sheer volume that clogs up your inbox. The solution is to change the way you send, write, and file e-mail. Here are eight high-impact techniques--all recommended by experts and road-tested by employees--to help you manage e-mail more effectively and seize control of your workday.

Send fewer e-mails. A 20 percent reduction in e-mails sent correlates to a 10 percent reduction in e-mails received, according to Song's research. Before you write a message, ask yourself three questions: Is this information timely and relevant? Does the recipient really need it to do her job today? Is this message appropriate? If the answer to each question is yes, then send the message.

Get the full article here.