Casual Fridays

johnmoore of Brand Autopsy was gracious enough to pay a visit to us business marketers in Tulsa at this month’s Business Marketing Association meeting. Speaking on Starbucks Tribal Knowledge (Business and Marketing Lessons Learned from Working Inside Starbucks), johnmoore gave a great presentation and left everybody wanting more.

One of my favorite nuggets within the presentation was Starbucks (unwritten) Code of Marketing Authenticity:
1. Be genuine and authentic.
2. Always say who you are, not who you aren’t (we don’t do this, we don’t do that).
3. Deliver on all promises made
4. Respect people’s intelligence. (even provide mental stimulation)
5. Never forsake the company’s heritage and personality for a short term gain. (i.e. no Starbucks combo meal)

John drew a great group of people and held their rapt attention the entire time. Although I had watched the Starbucks Tribal Knowledge presentation online, there’s nothing like the real thing.

Afterwards, I was lucky enough to continue the discussion with johnmoore at a local Starbucks (go figure) and pow-wow on a few topics… almost to the point of John missing his flight. Not being a frequent patron of Starbucks, I was unsure what to order. I had enjoyed a few mochas in the past, but figured there might be something better suited for my tastes. John recommended something that ended up being an excellent drink (what the heck was that thing John?). It will probably start putting a little dent in my monthly budget. By the way, all of this hullabaloo about John knowing the inner workings of Starbucks and he didn’t even finagle free drinks for us. Some inside expert!

All-in-all, Wednesday was wonderful. By the end of the day, I had gained a greater appreciation for Starbucks marketing philosophies, their product, their experience, and the very pleasant johnmoore who delivered on all promises made (see #3 above).

Everyone was captivated by what johnmoore shared

John drew a great group.

There were plenty of questions about Starbucks Tribal Knowledge afterward.

Where are you, your company, your product, your brand, your industry?

In our last article, we discussed the longevity of a product affecting how that product is promoted and sold. Art Kleiner wrote an interesting article for Strategy&Business concerning a product’s death cycle. Kleiner laments the decline of product quality since the 1980s. As quality declined, so did durability, and so did expectations. Kleiner cites lower customer satisfaction ratings for Hewlitt-Packard (surprise, surprise) and even at GE. These results may be even more concerning knowing that consumer expectations are lower now. Now, we buy a $40 DVD player and expect it to break eventually. An interesting result of the cheaper products is repairs now cost more than a new DVD player. We’ve made it a disposable product.

Products are designed for obsoletion. Razor blades become dull, diets are fads, sports-themed video games are tied into the year they’re produced. The razor blades are a quality issue, the other two products do not cease to work, they are usually replaced by products that seem better. Kleiner points to experts who suggest the solution to the quality issue may arise through competition and innovation. Competition pushes companies to create better products and services in order to survive, but it may also tempt companies to allow commoditization and lower prices. Innovation creates “purchasing lust” within potential buyers. Innovation is the most viable alternative to cost cutting and quality reducing measures. It is the path traveled by diet fads, video games, Apple, JetBlue, and even by regional fast food chain Sonic Drive-Ins. As these price and quality wars rage, we’ll see if Tom Peters’ adage, “Innovate or die” is true. I have a feeling his proclamation will be the epitaph of many companies’ headstones.

Dustin Staiger

A startup has burst onto the scene with an incredible innovation! Regiats Electronics has created the GE killer. In a press release this week, the electronics and manufacturing startup announced the creation of the perfect light bulb. Coined “Reluminate,” the new bulbs will never burn out. The problem with a bulb that never burns out is that once you buy bulbs for every bulb socket in your house, you no longer will buy anything from Regiats Electronics. So what’s their plan? Regiats has decided to use a subscription-based business model. Each bulb has a wireless chip within it that broadcasts a signal to local cellular networks. This signal is distinct to each bulb, which has a monthly subscription price based on the wattage and size of the bulb. As long as the subscription is active, then the bulb’s status is enabled through the wireless signal. So, if you live outside of wireless phone coverage, the bulb will be disabled and you’re out of luck. If you stop paying your subscription, you’re stuck with an unusable bulb.

Of course this isn’t true. The majority of people will not change to subscription-based light bulbs in the near future. If a “perfect light bulb” were invented, we’d probably be more open to usage-based bulbs than subscriptions. I believe that most people have an inherent aversion to subscriptions. We don’t mind subscribing to services (phone services, Internet access, cable TV) or publications. These have become traditional subscription items. So, an even greater obstacle than the aversion to subscriptions is the established traditions. And as Seth Godin states, traditions rarely change quickly just because the alternatives are better. This is the hurdle that Napster-like services have to overcome. Their effort would not be as daunting as the fictitous Regiats’ (which is my name, Staiger, spelled backwards), but nonetheless they have to overcome not only the traditional CD purchasing routine, but the standard alternative which is Apple’s iTunes Music Store.

Management and marketing gurus will tell you to focus on what differentiates your company from the competition. The key is to recognize that difference may be a hurdle for your customers to overcome as well. Making a light bulb that never burns out sounds great, but changing the product also changes the business model (which may or may not be so great).

Dustin Staiger