Learning From Starbucks: Revisited

Back in May 2009 I posted What We Can Learn From Starbucks.  In that post I discussed how Starbucks was having growing pains.  Many customers felt (including myself) they were moving away from what gave them the edge in the coffee market.  Almost a year and a half later they are turning things around.

Starbucks got over their caffeine headache and are now going back to the roots of the business: “the experience”.  People fell for Starbucks in the beginning because of the experience.  We spent $5.00 for a latte and we didn’t care.  We wanted to hear them call out the order with those made up words.  We wanted to see the barista make our drinks in front of us.  As they grew, they continued to raise the price of the drinks but pulled back on the experience and the quality.  All of a sudden they were not special.  McDonald’s now has “fancy” drinks at cheaper prices.  Dunkin Donuts even started messing with their coffee drinks.

Starbucks is making policy changes.  They are now back to requiring the barista to only make one drink at a time.  This helps with quality and enhances the customer experience of seeing their drink get the personal attention we pay for.  Yes, it will cause longer waits.  But Starbucks is betting the customer will appreciate that while shelling out $5.00.

There is a lesson here for all of us in the event & entertainment business.  Why don’t we get back to the core of our business?  Give our customers an escape from the real world for a few hours.  Think back to the days when you were the customer.  Remember what made you want to spend all your money on concerts, sports teams, shows, and events.  If we become the “experience” again our customers will buy.

What We Can Learn From Starbucks

Starbucks as a brand is very much like the shows and events we market everyday.  Like us, they have had good times and bad times. Currently they are suffering like we are.  Is the recession the only reason? 

I became a fan of Starbucks because of the “experience”.  The reason that Starbucks became a brand hit was because of the experience.  We didn’t mind spending more for the latte or the mocha because of the experience we had at the store.  Did I mention it was the experience?

Today, Starbucks has expanded so much they are literally on every corner in some markets.  Have you walked down the streets of Manhattan recently?  Some of the Starbucks stores are actually across the street from each other.  Whenever you have too much of a good thing it loses the luster.  With that many stores, Starbucks is losing control of the product. 

I have seen and heard many issues and complaints as it relates to the overall experience during the past year. One of the biggest complaints is the cleanliness of the stores. This was something you never heard when they were on top of the game. In my view they have lost site of why a customer wants to buy a Starbucks drink.

This weekend they are starting a marketing campaign to counter the coffee competition they have from McDonalds and other coffee sellers.  Why are they fighting McDonalds? Do they think McDonalds is at their level?  I tried the McCafe iced mocha the other day.  I was not impressed. This problem with McDonalds is all Starbucks fault.  They let Mickey D’s into specialty coffee market by lowering customer expectations and raising prices at the same time.  If you are going to create a brand that will become a lifestyle changing product, you have to maintain your dominance with this. 

The constant raising of prices and lowering of the experience will drive your loyal addicted customer to other choices.  Does this sound familiar for all of us in the live event and entertainment business?

Have a great weekend!

Customer Service Is The Heart Of Business

One of the top topics in the business blog world is customer service or as I like to call it “customer experience”.  If your business deals with customers (which the event & entertainment business does) then everything you do should revolve around customer service.  I believe you can take the temperature of a company by its customer service.  If the experience is bad then this usually means the business is not managed correctly and is in trouble.  I saw this happen with Circuit City and I saw it with a company I used to work for.  Both are now out of business. 

Yesterday I had a horrible customer experience with Dell.  Here is a computer company that was once on top of the world.  Everything about them was great.  They had great marketing, great products and great customer service.  They were right up there with Starbucks in terms of overall experience.  Over the last 12 months I have needed their services twice.  My Dell laptop is getting old.  The first time I contacted them several months ago I noticed a slip in customer service.  But yesterday took the cake.  I spent my entire morning on the phone with four different departments all of them I think were in India.  Each one always apologized and then tried to sell me something.  I was calling them to fix a problem. Because my computer is out of warranty I had to pay for an over the phone service.  Once they decided what the issue was they sent me to the sales department.  The part was in stock and would be sent out.  Of course the delivery date would be 10 days from now.  Are they kidding me?   Can they go 10 days in their business without a computer?  I had to press them about express shipping.  Of course they will for a bigger fee.  I’m ok with that.  The woman could not get my address right.  She asked me if I was sure that was my address.  Like I don’t know where I live?  When I got the email confirmation it showed the wrong address with the word “cancelled” next to the status.  This prompted another 10 minute call to Customer Care who claimed she fixed it.  Another email confirmation and more mistakes.  Still a wrong address and no mention of express shipping.  Guess what, another call.  You would think by now they would feel sorry for me and do something.  Nope, except another apology. Do you think I am going to buy another Dell?

This type of experience is what will ruin a company.  If they are doing this to me then how many other customers are getting the same service?

You can produce the best event in the world.  Create the best marketing plan and sell out venues.  But if your customer experience is bad, you are going to have to work three times harder to do it next time.  A bad customer experience is like getting sea sick on a boat.  You never forget that feeling.

 

Will Only The Cheap Survive?

Cheap is in.  It is cool to be cheap.  If you don’t believe me check out the article in today’s Boston Globe www.boston.com in the “G” entertainment section.  There is a big article about how being cheap has become a sport.  People wear it like a badge of honor. 

You don’t have to read an article to know this is true.  Look around you.  McDonald’s is kicking ass these days.  Have you noticed more Mickey D commercials?  Starbucks is getting killed because they still charge $4.00 plus for a latte.  I have mentioned before that Wal-Mart is the new Neiman Marcus.  You don’t have to hide your face with a hat and sunglasses when you shop there now.  All of us in the event and entertainment business should learn from this new and quickly growing trend. 

I think someone should put out a “Cheap Show”.  I don’t mean a show that costs less; I mean a show about living frugal.  This would make a great consumer event.  Think about who your vendors could be. There are tons of them.  You should have no problem filling a venue with them.  Even the ones that are not cheap want to be cheap so they will buy in on this show.   Of course you need to have a cheap ticket price with some coupons in the market.  How can you be a Cheap Show and not have coupons?  You need to have seminars with cheap talkers.  The first name that comes in my head is Clark Howard.  He has made a great living talking cheap for many years.  He was way ahead of his time.  He is laughing all the way to the bank and still has every penny.  When it was cool to only buy designer underwear from a high end store, Clark was talking about the “great” deals on underwear and socks at Costco. 

As we go forward with our events, shows, and sports teams, we should think about what our customers are thinking.  Are they going to pay $150 for one seat at a hockey game?  Are they going to pay 200 bucks to see a rock star they paid $10 to see in 1981?  People still want and need to be entertained.  That is never going to go away.  But right now they are looking at what it costs to be entertained. This could be good news for smaller venues and lesser named artists.  Small performing arts venues, coffee houses, and clubs usually have lesser ticket prices then their big brother arenas.  For $30 you can see an artist that puts out great music but doesn’t command your entire life savings to see him or her. 

When you market your shows and events you can be “cheap” too.  Are you doing PR on Twitter?  Are you talking about the show on Facebook? Are you writing a blog about your brand?  All of these are cheap.  In fact you can do it for free!

 

 

Jump On The Event Hype Bandwagon

Just when I was wondering when marketing gurus were going to jump on the post election bandwagon I saw today where a few of the “big guns” are going for it.

The inauguration is an event at par with the Super Bowl or opening ceremonies of the Olympics.  These types of events create tremendous amounts of hype.  This type of hype is contagious and everyone wants to be a part of it. 

Pepsi and Starbucks are two examples of brands that are marketing toward the inauguration.  Pepsi already has a campaign out there called “Optimism” with the “O” being the new Pepsi logo.  It is no coincidence that the campaign has an “Obama Campaign” feel to it.  When you see something work, you need to try it. 

Pepsi is continuing the campaign next week.  They are bringing the “Obama feel” to Washington DC.  They are putting up around the city posters, billboards, transit, and other out-of-home advertising with “positive” and “optimistic” messages (with Pepsi logo of course).  They are also going to have grass-roots marketing people handing out campaign buttons, hats, scarves, and other marketing “stuff”.

Starbucks is getting in on the action by kicking off a “community service” campaign tied into the new President.  The promotion will ask customers to give a minimum of 5 hours of community service.  They will hand out pledge cards to customers with the goal to reach 1 million community service hours.  They are going to market this campaign using online, TV, grass-roots, and maybe print.  Starbucks is also going to show the inauguration live in their stores in certain markets. 

If you can put together the right plan you can get in on something like this and you don’t even have to pay sponsorship rights. Let’s call it “Event Hype Marketing”. Just go with the theme.  You see this happen all the time with the Super Bowl.  The NFL of course owns the rights to the name “Super Bowl” and is very protective of it.  But how many brands have you seen market the event without giving the NFL at dime.  Retailers, food vendors, and beverages spend tons of money marketing the “big game” and never mention the Super Bowl. Of course we know exactly what they are talking about.

No matter what you are promoting you need to see what holiday or event is on the calendar near your event. Huge events and holidays are posted years in advance. You should always list these in your marketing plan.  How can you market using these events or holidays?  You always get attention when you are part of the hype.

 

PR In The Web 2.0 World

The world of public relations has come a long way.  I grew up around PR.  My parents are in the business.  When I first started in the entertainment marketing business PR consisted of press releases, face-to-face story pitches, and PR events or stunts.  Today, with the technology PR can and should be one of your most valuable assets.

If you handle PR for a show, event, or venue you should be busy every single day.  You have so many options at your disposal that you should never just sit at your desk and play solitaire.  Instead use that time to play in the social network world.  You should always have your social network sites up on your screen where you are always deep in the trenches of your customer base. 

I have become a recent fan of Twitter.  This social site is perfect for all PR people.  You can tweet all day in your social space about your brand.  I search Twitter everyday looking for other Twitter members to follow (you can follow me too, I go by eventpromoter).  I am always looking for people, shows, events, and venues from our world.  To my surprise, I am still not finding that many.  What is up with that?  Twitter is the perfect PR tool.  For example, I follow Starbucks.  Why, not quite sure but I thought a big brand like them might be a good social experiment.  I am not the only one following Starbucks.  They have almost 30,000 followers.  Think about this.  You can send out any number of PR messages you want for free and your potential customer will see it.  They want to see it. That is why they follow you.   I also use Twitter to get to know a brand.  For example, I am working on a wine cruise featuring wine guru Gary Vaynerchuk (by the way, he also has 30,000 Twitter followers).  What goes with wine, but cheese of course.  So, I am following Cabot Cheese.  Everyday, I get messages from them. Each one tells me something new about them that I did not know before.  That is good PR, don’t you think?  Many brands conduct contests for their followers.  What a perfect place to give away a few tickets.

I have discussed several times the use of Facebook.  They already own the high school and college crowd.  Now their fastest growing segment is the 30+ age group.  Check out these stats: http://www.facebook.com/press/info.php?statistics.   As a PR person, you should always be able to find your niche group to spin your story.  If you are a sports team you have all kinds of groups for that team.  If for some reason you don’t, then start one.  The same goes for concerts, family shows, etc…

If you do your homework you will find all kinds and types of social sites.  Many cater directly to your target demographic.  If you are trying to reach moms then go to momslikeme http://www.momslikeme.com/.  You can actually pick the state and city that you are trying to connect with.  Want to reach the African American community?  Join http://www.blackplanet.com/.  They have over 15 million members!  Want to reach the business community then you need to be part of LinkedIn http://www.linkedin.com. Even if you are not trying to promote to the business world you need to join LinkedIn just to network for yourself.

Look at the world of blogs.  More people are reading them everyday.  You are reading one now.  There are blogs for almost everything.  Anyone can start a blog.  If you handle PR for a venue, show, sports team, etc.. you should have a blog.  What a perfect place to put all your press releases.  You will be very surprised who and how many people will read it. 

Next time your boss sees you just staring at your computer, tell him you are just playing the game of PR.

More On Facebook Marketing

I found not one but two articles in yesterday’s Wall Street Journal that has been an on-going discussion in this blog. 

Facebook Marketing

Last week I discussed marketing opportunities with Facebook. In yesterday’s WSJ they discussed how traditional ad placement on the site was not working and they are now using “engagement ads”.  I gave an example of this last week with Starbucks giving out free coffee on Election Day.  As I mentioned, you did not have to see it on Facebook or even RSVP that you would be going to Starbucks to get free coffee (everybody got one). 

What the marketing tool did:

 1) Gave real-time numbers of eyeballs on the placement.

 2) Gave a call to action.

 3) Gave an opportunity to market back to this interested & engaged customer.

The article used another example with “Project Runway”.  If the Facebook user added “Project Runway” to her/his personal lists of events (this was offered to user), then the site then informs all her/his other “friends” of this which creates a chain effect and more eyeballs on the advertiser. 

Some may argue that this ruins or takes advantage of what Facebook is all about.  My answer is that Facebook has to make money somewhere or it cannot survive.  Also, as marketers we should be thrilled because this changes the whole way we market to our customers and how they see our product.

More Ticketmaster

The other article yesterday in the WSJ was on Ticketmaster’s latest cannon shot.  The ticket giant announced that it was experimenting with “dropping its fees”.  That the ticket price for a show would be the bottom line price.  They were trying this out at an Eagle’s show in Greensboro. 

I have no issue with offering one face value price with ALL charges and fees included but that is not how they are marketing this.  They are saying that Ticketmaster is dropping the fees.  I don’t believe that for a second.  The fees are a main revenue source for them.  They are in the business of making money.  The article said that Ticketmaster’s net income for the last quarter was down 76% from 3Q of 2007.

My theory is that the fees are built in.  For example; if the ticket price is $100, then actual money sent to the venue for settlement is $90.  With this model, Ticketmaster could (behind the scenes) raise the fees and make even more money.  The customer would never know.

Facebook Marketing

Now that I have been using Facebook on a daily basis, I have been looking at all the marketing opportunities that go with this type of online service.

Of course you can buy advertising directly with Facebook.  These are the ads that are placed on the right side of the page.  I would like to know the click rate for these ads?  Do members really check them out? 

But the most effective way to market is to directly ask the member.  The Obama & McCain campaigns have all kinds of direct marketing on Facebook.  I did a quick Obama search under events and it produced more then 500 Obama event causes.  McCain produced the same results.  Here is an interesting stat: The cause group that claims they are the “official” McCain group has almost 217,000 members and the big Obama group has more the 800,000 members.  There are two reasons for this.  I believe the Obama campaign has done a better job of marketing to the social websites and he appeals to younger voters which use the site.  When I was searching both campaigns on Facebook I could have looked forever.  The groups for both candidates go on and on.  Some have just a few members and some have tens of thousands.  No matter what, this is a lot of eyeballs promoting the candidates.

A great marketing tool with Facebook is the join an event option.  The first one I received was asking if I was voting. I had the option to RSVP with confirm or decline.  It shows you how many others have already confirmed.  This is a wonderful marketing tool because you have the person do something (interactive) which will help them remember and you have direct stats to tell you how many saw it.  It also creates hype.

Starbucks is using the election & Facebook to market.  They are offering free coffee to all who tell them they voted.  They added the RSVP feature to this.  Not because you need it to get the coffee but it tells them how many people really read it.  The last count I saw was over 61,000 people saying they would attend.

We all should be taking a closer look at social networking.  I think this is the next big marketing battleground.

 

It’s The Experience Stupid!

As a marketer I can mess with everything around the product but the product its self.  If it is a show, that’s the producers domain.  If it a sports team, its the owners and coaching staff that puts the talent out there.  You hope they give you a good product to sell but that is not always the case.   A sports team can have great talent but for some reason just can’t win the game.  A show can have the best of musicians and dancers but that alone doesn’t get a customer excited and it will need to be marketed. 

If you work for a sports team you cannot control what happens on the field or the ice, but you do control the communication of the product.  Win or lose your job is to sell them.   You can also control the customer experience.  From the moment they enter the arena until they leave, their experience should be a good one.  Remember that is what they are paying for.  Even when a team loses a game, you want the fan to say “too bad they lost, but I had a great time and can’t wait to go back”.  This really goes for any product.  If the overall experience is good, then the customer will be willing to pay for it.  This is what makes Starbucks what they are.  It is not just the coffee, its the whole experience.

The marketing and advertising of the product not only has to reach your customer but it also has to be a part of the customer experience.  Your message has to inform, excite, entertain, and get them to buy.  You want the experience to start even before they arrive at the event.

As a marketer you should play a vital part in the customer experience.   If you are a good marketer, then you know your customer.  Good ownership will listen to their marketing people and give them all the right tools to make the product a success.  Ownership must also make a commitment to the customer or the fan.  They have to commit to putting out the best product possible.  They have to stay proactive and not reactive.  Don’t let them slack on doing their part to make the customers experience a positive one.  Remind them they can’t make money if the customer is not buying.