Starbucks, Radio, & Your Business Focus

Updated on April 20, 2008: Lot's of you are here because Google sent you here when you were looking for information on Starbucks history and advertising. I suggest you click here to get a complete run down on Starbucks history and Starbucks advertising. Otherwise, read on:

Warning: The following is directed to radio station insiders.

The radio station sales people or managers that are wanting you to do business with them probably don't want you to read this.

However, I have no fear of you having this insiders perspective, because I know that by holding ourselves to a higher standard, it creates a winning situation for all involved.

And the stations I work with, are positioned to follow the advice that follows.

Also, this is excellent business advice, no matter what line of work you are in.

This is from Mark Ramsey and his Hear 2 Blog:

Fixing Radio the Starbucks Way

More than 45 million customers worldwide buy something from Starbucks every week - still, there are signs that the company has been slipping.

Does this sound familiar, radio broadcasters? Tons of usage - but erosion in usage is notable and growing?

Yes, Starbucks is ailing, and its CEO Howard Schultz wants to fix it.

Not by broadening their offerings or trying to be more things to more people - not by going "outside the box," but by going deeper into the Starbucks "box" and doing a better job delivering to the primary reason consumers drop into their stores every week: For coffee products and the experience which surrounds them.

USA Today gathered some industry experts to provide their own prescriptions for Starbucks. Here are a few that might apply to our industry as well as Schultz's:

Smell good again.

"A cafe should smell of fresh, ground coffee. It's a powerful emotional trigger," says Malcolm Knapp, a restaurant consultant.

Schultz has this one on the way. By mid-August, coffee again will be ground and scooped at Starbucks' 7,100 company-owned U.S. stores. Some 50 stores already are.

"Smell" isn't the right sense for radio, "sound" is. How much of the attention at your station or your group is aimed at boosting your listenership by actually making your station sound better, rather than simply cost-cutting your way to quality? Can you improve what's on the air and make the content more compelling? Even if that comes at a higher cost? After all, better quality doesn't come cheap. "Smelling good" will cost Starbucks more, and they think it's worth it. What about you?

Embrace wired youth.

Social networking could create "a deeper emotional connection" with its customers, says Kevin Higar, a consultant at Technomic.

Schultz says social networking will be addressed, perhaps as early as today, but offered no details.

In Radio, social networking is just part of a broader challenge to mobilize our audiences online. Most stations are at a very early stage in this process if they understand the process at all. I predict that this techno-disparity between radio and other "old media" must either get resolved soon, or our laggard status will increasingly make the headlines and discourage our advertisers - especially nationally - from taking us seriously as a vehicle to connect their products and services with consumers.

I hate to break it to you but this is one of the key reasons why your national business is down. What are you doing about it?

Reward loyalty.

Starbucks could build "customer engagement" with a creative loyalty program, says Technomic's Higar. It should have one with a twist — and cutting-edge technology, he says.

Schultz says he will talk about such a program Wednesday.

Loyalty programs have a long history in radio, and not necessarily a distinguished one. That's because few of our "databases" or communities are particularly large. The vast majority of the stations I visit bemoan the small size of their communities and have relatively little motivation and few resources to increase those numbers, let along leverage them.

Ironically, the tools and resources to make this happen in our industry are readily available and easily monetizable. But when your staff is cut to shreds prioritizing for critical new initiatives is difficult, while paying for them is impossible.

If this doesn't change, folks we will only have ourselves to blame.

Sell unique coffees.

Starbucks needs more coffee drinks that aren't available elsewhere, says consultant Bob Sandelman.

Schultz says he's working on just that. In "the next 18 months, we'll bring in more innovation than over the past five years."

Innovation is one of Schultz's key thrusts. Is it one of yours?

List five major things you innovated in the last twelve months that are designed to create measurable ratings and/or revenue leverage.

Can you list even one?

Cut the clutter.

Customers don't know if they're in a "coffee shop or variety store" Knapp says.

Schultz agrees. Stores will have "fewer things" that are "more focused on elevating the coffee experience at home." He adds that store redesigns are coming in 2009.

If PPM teaches us anything, it's that audiences reject clutter. And by "clutter" I mean anything that isn't central to the reason listeners are at your station in the first place.

Stop trying to "build a radio station" and focus instead on fulfilling the main reason listeners are at YOUR radio station. If that doesn't require a morning show then don't have one. If it doesn't require feature programs then skip them.

Revive "coffee theater."

Starbucks needs to refocus on the "mystique" of its coffee, says consultant Dennis Lombardi. Recent retraining of baristas is a start, he says, but more needs to be done.

What's the "mystique" of your station or your content? How much emphasis do you put on the fun of your brand? How much do you consider that radio remains (despite some of our best efforts) to be about entertainment?

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