Starbucks: Strong brands always have more brand credits than debits

Starbucks Coffee’s marketing research department keeps busy with yearly brand audits that provide a wealth of information about the Starbucks brand. Take it from a former Starbucks marketer who has worked for the company for many years: Starbucks learns a great deal from these studies.

Starbucks’ marketing department uses a simpler tool to measure and manage the brand every day: a brand checkbook.

Brand checkbooks have brand debits and credits, just like your personal checkbook. Brand credits are activities that improve the perception and reputation of a company. “Brand debits” are actions that harm the brand’s reputation.

When determining the appropriateness of marketing activities such as sponsorships, programs, and special events, the marketing department first determines whether the activity is a credit or a debit to the brand.

Starbucks marketers ask these questions to determine whether a marketing campaign will have a positive (credit) impact or a negative (debit).

  • Is the marketing respecting the intelligence of Starbucks Customers?
  • Can Starbucks deliver on the promises it makes to its customers?
  • Will Starbucks employees be motivated and excited by this activity?
  • Will customers consider the marketing campaign to be clever, original, authentic, and genuine?

If your marketing department has answered “yes” to three out of four questions, then you can consider the activity a credit for the brand.

Conversely, if Starbucks marketers answer “no” more than once, the activity will be considered a brand deficiency. Starbucks’ marketing department will then have to determine the importance of that brand-debit activity.

Starbucks struggled with the idea to run a sweepstakes.

Starbucks’ marketing department first had to decide whether the sweepstakes was a positive or negative promotion for the brand before it ran its first sweepstakes in early 2003. Starbucks and Vespa Scooters partnered to offer customers the chance to win various prizes, including trips to Italy, Vespa Scooters, and more.

Starbucks’ marketing department determined that the sweepstakes promotion was brand credit because they were able to answer “yes” emphatically to three out of four questions on their brand checkbook.

The marketing department felt that it was important to respect the intelligence of Starbucks’ customers by offering the Vespa sweepstakes because it not only conjured up romantic images of Italy but also linked Starbucks to its Italian coffeehouse culture roots.

Starbucks’ marketing department felt confident that it would be able to fulfill all of the promises made to customers through the sweepstakes because the contest was being run by a third-party contest administrator who was in charge of ensuring all prizes were delivered and Starbucks adhered to all legal requirements.

Starbucks marketers were confident that baristas at the store level would love the Vespa sweepstakes. They had heard their enthusiasm for the idea and heard them discuss it.

Starbucks marketers couldn’t answer “yes” with certainty to the question of whether customers would consider their marketing efforts clever, original, and genuine.

The Starbucks Vespa Sweepstakes was a success, according to all reports. It drove sales and delighted customers with its cool prizes.

Starbucks marketers have deemed couponing as a brand detriment.

Many restaurants and fast food chains use coupons to increase sales and test new products. These businesses often use coupons in bulk mailings sent by companies such as Val-Pak. They insert coupons with offers from dry cleaners and oil-change shops. Bulk coupon mailings can be an inexpensive way to reach many people.

Starbucks does couponing but very carefully. Starbucks has never used bulk mailing services for coupons because it is seen as a brand detriment rather than a credit.

Starbucks marketers don’t believe that inserting a discount coupon in a mass mailing envelope is a respect for the intelligence of Starbucks clients. Customers would not consider this coupon activity to be clever, authentic, original, or genuine. Starbucks marketers have found that customers want more originality, and they expect Starbucks to treat each customer as an individual and not in a collective manner by mass mailing coupon envelopes.

Furthermore, Starbucks marketers believe that store-level baristas would feel de-motivated if they worked for a company that had to resort to such a lowest-common-denominator marketing tactic to goose sales.

Just as it would be unrealistic to expect a business to only engage in marketing that involves brand credits, it is also unrealistic to assume that they will only do so. A growing, healthy business must have more brand credits than debits. Your brand checkbook is in constant debt. In the end, with enough debits, a company may face “brand bankruptcy,” where a business promises more than it can deliver and thus bankrupts its brand. It isn’t easy to regain brand credit or customers once this has happened.

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