What is it about Starbucks?

by Russell Buckley on April 1st, 2007 in Location Based Services

One of the enduring myths about Location Based Services is the so-called “Starbucks Scenario”. You know the one - people write about how you’ll be going down the street and your phone will beep and you’ll see a Starbucks promotion offering you a half price latte if you pop into the store right next to you.

I’ve no idea who first thought of this example, but it’s a very poor illustration of Location Based Marketing. For a start, unless the transmission of the message is free, the promotion would be unaffordable as the redeemed messages would also need to cover the transmission cost of sending of the non-redeemed ones. This means for most low-priced products, like Starbucks and fast food retailers, this type of promotion is little more than a fantasy.

The other issue is how a company like Starbucks would manage the logistics of this type of promotion. It only really makes sense if that particular Starbucks is not very busy. If there’s already a queue, there’s no point in adding to it. But how would a centrally controlled system know about local conditions? And if locally implemented, who is actually going to manage it? While the obvious answer is “the manager”, delegating local marketing initiatives is going to be resisted, for understandable reasons, by head office.

And if that’s not bad enough, we have the issue of perceived spam to cope with. Such a promotion would clearly need to be opt in and many Starbucks customers might be happy to get the odd offer. But on those days that they’re in the wrong mood, or have just paid full price for that latte or are just in a hurry, the value offer becomes annoying and suddenly perceived as horrid spam.

Anyway, if you’re interested in Location Based Marketing like this, drop me a line and ask for a copy of my free white paper on this area.

What brought this to my mind is another Starbucks’ initiative around Location. Namely a “find my nearest” service, inviting people to text in their Zip code to totally the unmemorable “MYSBUX” (short code 697289) and they’ll get an sms with the address of their nearest 3 Starbucks stores.

This is about as likely to work as the Starbucks Scenario I just wrote about above, which is sadly, very, very, very unlikely to work, in case I wasn’t quite clear.

Why?

Well, most of us spend most of the time in an area we know already - we either work there or live there. So if you’re a Starbucks’ fan, you won’t need to ask, as you’ll know.

And the tiny percentage of the time most people spend outside their known area, they’ll just forget that the service exists, or they won’t be able to remember how it works or the number they need to send it to. Oh, and they won’t know their Zip Code either, coz they don’t know the area. And in the event that they overcome all these hurdles, the address won’t mean anything to them either, unless they ask someone. Which is what they’d probably have done in the first place if they’d really, really wanted to find their nearest Starbucks.

This all reminds me of a friend of mine, who I shall call Nick, because that’s his name. When he gets very drunk and happens to be in a restaurant, he calls the waiter over and asks for 15 eggs and 15 wine glasses. The bemused waiter normally brings them and Nick spends about 20 minutes building a complicated pyramid of eggs and glasses. By this time, most of the restaurant are watching in suspense.

Nick then announces that he’s going to pull the table cloth out and all the eggs will break and fall neatly into their corresponding glasses. The suspense if palpable as it would be truly amazing if he managed to make this trick happen. With much theatre, Nicks grasps the table cloth, (even the kitchen staff are watching now) and with a flourish, he pulls it hard.

Glasses and egg go everywhere, coating the immediate vicinity in broken glass and yolk. It’s also noticeable that not one egg has broken cleanly into one glass. The restaurant is hushed in shock and Nick stares at the wreckage he’s made. He then shakes his head and says, after a 4 second pause:

“It never works….”

Another 4 second delay happens and then the diners burst into laughter and applause.

So what’s that got to do with Starbucks and their “find my nearest” initiative? Stealing Nick’s punchline, it just never works.