Pour Your Heart Into It (36 page)

But another group argued that we ought to seize every opportunity to push the brand further with a new design that was bold and fresh and as playful and fun as eating ice cream. Using the existing design, they feared, would be admitting, “This is as good as we can get.”

Ultimately, the innovative, playful approach won out. We adopted a bolder look developed by Terry Heckler, with a field of swirls and stars against a background of browns and oranges and yellows. I saw it as a chance to step out, instead of just stepping in place.

The Starbucks brand image has even affected the design of our offices. In 1997, when we redesigned our building and named it Starbucks Center, we wanted it to reflect a new sense of playfulness. When we took down the SODO sign on the clock tower of our building, we replaced it with the head of the Starbucks siren, peeking out over the top of the building. Now everyone visiting our offices, which were once unmarked and invisible from the street, will be treated to the sight of a tall tower topped by a pair of eyes and a starred crown.

Even though few of our customers ever visit our offices, our redesign reflects a new spirit that Starbucks is taking on as we move beyond our retail base. As fanatical as we remain about coffee and the store experience, we also want people to realize that Starbucks has a sense of humor and a playful side, a well-rounded personality with both exuberance and irreverence, one that can connect with people at many levels and in many moods.

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LEVATING THE
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RAND TO A
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By 1995, the Starbucks brand faced an identity crisis. Although we had built a reputation based on world-class coffee and a meaningful connection with people, the field was getting so crowded that some customers couldn’t differentiate us from scores of competitors. Distracted by our size and ubiquity, they missed the point about our quality and commitment to community.

Clearly, word of mouth was no longer sufficient to get our message out. As long as we didn’t clearly state what we stood for, we left room for confusion about our intentions.

We’ve always relied on our coffee to speak for itself. Gradually, though, we realized that we had to be more proactive in telling our story. Walking down the street you may pass two or three coffee places. How are you to know which one serves the best espresso drinks? How can you tell which one roasts its own coffee and sends its buyers all over the world, searching for the best beans? By the mid-1990s, we needed a better way to articulate our story and to weave it into a more comprehensive image, one that encompassed our soul and vision.

Great brands always stand for something far bigger than themselves. The Disney name connotes fun, family, and entertainment. Nike signifies superior athletic performance. Microsoft aims to bring a computer to every desktop. I wanted to raise Starbucks to the next level, to make it stand for something even more than a great cup of coffee and a warm, inviting atmosphere.

As we grew larger, it became clear that we needed a dedicated brand champion, someone whose responsibility it would be to clarify and elevate the Starbucks message. I had always taken a direct and active role myself in marketing and merchandising, because they are so closely integrated into the value of everything we do as a company. But by 1994, I was looking for a new senior marketing executive, and I wanted it to be someone who had already taken a brand to national, or even global, prominence. I left the top marketing position empty for eighteen months while we searched for the right person.

It proved to be a difficult job to fill. The right candidate had to be someone classically trained in marketing, who could both unveil the brand personality of Starbucks and bring it to life, working with the other departments of the company. It had to be someone who had both a creative mind and the ability to execute a strategy. In addition, I wanted someone I could learn from, someone who was considered to be the best and the brightest in brand development and marketing. The future of the Starbucks brand, I knew, would be in this person’s hands.

In February 1995 I found Scott Bedbury in a cabin in snowy central Oregon, writing a book about unlocking the creative process in business. He had worked as Nike’s director of advertising from 1987 to November 1994, the years when “Bo Knows” and “Just Do It” became part of America’s vocabulary. Having just gone independent, he had written me a letter, offering to work as a marketing consultant. I had a different plan in mind.

“Yo!” he answered the phone, thinking it was his wife.

“Is that Scott Bedbury? This is Howard Schultz.”

“Oh, hi!” he greeted me, and then laughed. “You won’t believe this, but I just wrote a passage about Starbucks in my book.”

He read me the piece, an entire page filled with good insights. He sounded young, bright, hip, energetic. He talked fast, the ideas spilling over one another. I invited him to Seattle so we could meet face to face.

Less than two weeks later, Scott was in my office, trying to sell himself as a consultant. He dressed in an impeccable casual style, as he always does, and his blue eyes flashed as he talked. He looked even younger than his thirty-seven years, like someone who would be in tune with the styles and needs of the twenty-something generation. He talked with excitement about his new consulting business and about the three other potential clients he had lined up.

Within five minutes, I turned the tables on him. “I really don’t need a consultant,” I told him. “What I need is someone to be our head of marketing.”

He was taken aback. He had already planned his life out for the next twenty years. But he eventually accepted, and by June he had moved his family to Seattle and was beginning to think about a long-term marketing strategy for Starbucks.

Scott immediately found himself challenged by the fact that Starbucks is not only a brand but also an importer, a manufacturer, a retailer, a wholesaler, and a direct-mail business. No company that he knew of had done all five and survived. But he found some surprising similarities with Nike, too. Like Nike, Starbucks had entered a low-margin commodity industry and transformed its product into a cultural symbol. And I was surprised to hear that Nike, too, had started out by building its brand one customer at a time. Phil Knight initially hired running zealots to sell Nike shoes at track meets out of the trunks of their cars.

When Scott had joined Nike in 1987, it was in transition, just beginning its leap to national advertising. It had great athletic footwear but had never tried to appeal to anyone other than men and runners and basketball players. Scott helped Nike “widen the access point” to its brand to include women and “weekend warriors” looking not for a personal best but merely for the fun of physical exercise. Nike held tight to its core identity as a shoe for athletic performance but poked fun at itself and its loyalists, at basketball role models, amateur joggers, even dog-walkers. Its commercials and print ads hit an emotional chord that resonated far deeper than advertising normally does. Many are still remembered, five to ten years later.

When Scott arrived at Starbucks, he had more innovative ideas than any of us could keep track of. He was particularly intrigued by the idea that Starbucks needn’t be confined within the four walls of our stores, and his imagination spun it even further than we had imagined. We should bring coffee to where people enjoy it most or want it most, he said, as long as we can ensure its quality. We had on staff thousands great baristas, many of them aspiring artists or musicians, who could get out onto the streets to proactively meet the needs of our customers.

Scott believes that Starbucks should be a “knowing” company: in on the latest jokes, the latest music, the latest personalities, up to date about politics, literature, sports, and cultural trends. He plans to shake up what some see as the predictability of Starbucks with ideas that are vibrant and innovative.

Until Scott joined, Starbucks had spent only a small percentage of our revenue on advertising. To someone used to Nike’s $250 million worldwide marketing budget, our few million dollars seemed paltry. I wish I could have handed Scott a war chest of cash for advertising the day he walked in the door, but high coffee prices meant we had to temporarily put some costly projects on hold. In spite of that restriction, we went ahead and began the process of creating a voice to express our brand personality. The media dollars would come later.

Even before Scott had been hired, we had made the decision to find a new advertising agency. We selected four top-notch agencies and asked them each to prepare a presentation. That summer, a team of us first met with all four, and I explained my goals for Starbucks. They did market research with consumers and Starbucks partners before making their presentations, and they uncovered a disturbing theme: The key threat to the Starbucks brand was a growing belief among customers that the company was becoming corporate and predictable, inaccessible, or irrelevant.

The vehemence of those feelings shocked me. As CEO, I had deliberately kept a low profile, in order to keep the focus where I felt it belonged: on the coffee and our stores. But when I heard that some people viewed us as a faceless corporation, I knew I had to take a more visible role in explaining who I am and what my goals for Starbucks are.

Ironically, once a company is big enough to advertise heavily, it has to disarm people who are suspicious of size and ubiquity. Clearly, we had not told our story well enough. We needed to communicate who we are: a passionate, entrepreneurial company dedicated not only to providing great coffee but also to enriching everyday moments for millions of people.

Picking an agency was a tough choice, since all four had great creative ideas. I let Scott decide, and he went with Goodby, Silverstein & Partners, the award-winning San Francisco agency that created “Got Milk.”

I told Scott and the Goodby people that I wanted Starbucks to become part of people’s lives, to enrich them with a sense of discovery and hope. It should be human and real. Our advertising should tell people who we are and what we do.

Once we had signed with Goodby, Scott plunged into our own market research, hiring an expert from Nike, Jerome Conlon, to lead the effort. Jerome had been at Nike for fourteen years, including ten as the head of consumer insights. The two of them embarked on the Big Dig, a three-stage, nine-month research project, beginning with focus groups in three cities. They watched through one-way mirrors as customers and potential customers were asked about their perceptions of the coffee and the Starbucks experience. Why do people come to Starbucks? How do they envision an ideal coffeehouse? Scott was especially interested in hearing the opinions of young, college-aged people, tomorrow’s coffee consumers, many of whom preferred offbeat local coffee places.

Again, we got blasted by some of the opinions we heard. Customers in their thirties and forties and whole-bean lovers are generally happy with the Starbucks experience. But twenty-somethings want more from a coffeehouse. They want a place that’s funky and unique, not necessarily well-lighted and efficient. What matters to them is a place to hang out at night, not a quick to-go latte on the way to work.

The research helped us realize that customers have different need states, and that we have an opportunity to try to meet them in different ways in different stores. During the day, a college student may want somewhere to study with a cup of coffee. During the evening, that same student may prefer a place to meet with friends, free of the heavy influence of alcohol, that offers great music but also a chance to talk. On her way to work, a middle-aged attorney may want to buy a quick double latte at a drive-through, but at mid-morning she may need a table and relaxed atmosphere to discuss business with a client over coffee. The challenge we faced was to maintain, if not strengthen, the relevance of a brand that attracted such a diverse group of consumers.

The research forced us to rethink our marketing strategy. We see ourselves as the respectful inheritors of the European coffee-house tradition, with all its connotations of art, literature, and progressive ideals. We can strengthen and enrich the Starbucks experience by drawing from this legacy and finding parallels in contemporary America, as we did when we began offering high-quality books recommended by Oprah Winfrey in 1997. We need to continue satisfying our core customers at some locations but also “widen the access point” to appeal to those who want a stimulating Third Place in which to gather in the evenings.

National advertising poses a dilemma for a company like ours. With more than a thousand stores across the United States, we need to speak to people in many cities at once. But by its very nature, national advertising fuels fears about ubiquity. How do we reach a national audience while still being respected at the local level? We worked for months on a master plan, rejecting many concepts along the way.

However we approach our customers, we have to do so with respect, intelligence, humor, and energy. You can’t hold the attention of people today unless you treat them as you would a respected friend of the family. In our case, these friends are our customers. The brand connects our partners, our customers, our products, and our core values the same way a family does.

Goodby has begun helping us craft an image that is simple, elegant, soulful, and uplifting, focusing on the emotional benefits we all look for in a coffee break, while embodying the playful and humorous spirit Goodby is known for. They are seeking to balance the successful corporate giant against the personal, human interaction our customers have every time they take time out to go get their favorite coffee.

A hint of Goodby’s approach can be seen in these proposed advertising statements:

“We’ve got coffee down cold”—for our summer 1996 promotion of both ice cream and Frappuccino.

“Today, someone’s writer’s block will evaporate in the steam of a cup of Kona and the great American memo will be written.”