The pull side_of_social_media (08-11)

The Pull Side of Social Media How Starbucks leverages online consumer dialog to continuously improve the brand experience By David Bishop, Managing Partner, Balvor LLC

It’s true that digital technology has shifted market power to shoppers. Today

consumers can leverage various web-based applications to maximize their ability

to get the best perceived value. However, it’s also true that technology offers

retailers the opportunity to engage shoppers in new and more effective ways.

Many retailers leverage digital technology to broaden their reach, build

brand awareness, and push out incentives via special deals. However, marketing-

centric retailers are also leveraging it to build

stronger connections with consumers –

connections that support company efforts to

continuously improve the brand experience

throughout the path to purchase.

Via proprietary platforms or a large social media sites like Facebook,

companies are pulling consumers into the business process by encouraging

comments, stimulating discussion, listening to what others are saying, determining

what actions to take, following up on consumer questions or issues, and sharing

the changes they are making in response.

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The Pull Side of Social Media How Starbucks leverages online consumer dialog to continuously improve the brand experience Published August 2011

The “My Starbucks Idea” web site is a great example. It enables consumers

to “Share. Vote. Discuss. See.” ideas with the company and others in the

Starbucks user community.

Value of Dialog The site’s functionality is impressive. It provides an easy and effective method for

consumers and the company to interact. Less than thirty months after its launch,

Starbucks claimed to have received their 100,000th idea. This is the equivalent of

receiving over 3,000 ideas per month. It’s important to recognize – as Starbucks

does – that many of the ideas shared may not have been on the company’s “radar”

or ever identified without this type of consumer input.

Form Follows Function Anyone is able to post an idea or build on other conversations after setting up an

account on the site, which is relatively quick and easy. Starbucks enhances the

process by offering a drop-down box that allows consumers to select where each

idea is classified – atmosphere and locations, food, new technology, etc. The

comment is posted instantly for others to see, vote on, and comment.



Collective Wisdom Given the sheer volume of input that the site generates, Starbucks takes advantage

of technology even further by using a form of crowdsourcing.1 This process helps

them understand and begin to evaluate the merits of each idea by allowing others

to:

• Indicate agreement with the comment by either promoting or demoting an

idea (their version of “liking” or “disliking”). Each vote helps to determine

how interested others are in the idea and what level of agreement there is

among the community.

• Share comments related to the idea, essentially keeping the discussion going

and offering additional insights. And, in some cases, comments from others

help reveal what the community already knows or believes about various

ideas, acting in a way as a brand ambassador for the company.

In this way, Starbucks enlists the broader consumer market to help generate

ideas and analyze their potential appeal. It lightens the company’s workload

slightly by acting as an initial filter for new ideas – and it empowers consumers by

allowing them to share their personal opinions. These mutual benefits help to

build a stronger connection between consumer and the brand.

Understanding the Impact One approach to examining the value of engaging consumers using digital

technology is to examine how it helps improve business practices, product

offerings, and/or the overall experience with the brand.

1Crowdsourcing is a problem-solving process. Ideas or issues are broadcast to a group of people using an open forum

for discussion. People —also known as the crowd—submit feedback and crowd sorts through the ideas/comment, helping to identify the best ones.



As of June 2011, Starbucks indicated that they’ve launched 150 of the ideas

so far, such as bringing back happy hour, offering a 24-ounce reusable cold cup,

and creating a mobile app for the Android smart phone.

Exposing the Brand What’s really neat about the site – or potentially unnerving – is that anyone can

learn a lot about what consumers would like Starbucks to do differently. The good,

the bad, and the ugly, it’s all out there – and companies need to be willing to

embrace and encourage this level of transparency.

For instance, according to my search, the top, all-time idea relates to

offering a coffee-club program, e.g., “buy 10 get 1 free.” And while Starbucks

may not deploy a program exactly like the suggested idea, it is vitally important to

follow up in general to ensure consumers feel as though they’ve been heard and

that the company appreciates their input and comments.

Look before You Leap Something like the Starbucks site isn’t for the faint of heart. It takes many

resources and an on-going commitment to execute effectively. For instance,

Starbucks indicates that they involve around 40 “Idea Partners” to support the



process. Each is a specialist in different parts of the organization, e.g.,

sustainability, operations, etc.

Efforts don’t have to be this elaborate. It’s important to point out that other

retailers are engaging consumers in similar ways, using different platforms like

Facebook. The digital technology available today helps level the playing field to a

degree, so companies of all sizes can develop programs that support their unique

needs and business strategies.

Embracing the Opportunity It’s worth noting that consumers are offering ideas and feedback without the

promise of a coupon or free drink; the desire to be heard and appreciated has value

in and of itself – apart from other incentives.

It’s becoming increasingly clear

that a well-executed program that

engages consumers in a two-way

dialog can do more to help build a

business over time than any limited-

time promotional deal ever could. This

suggests that companies would benefit

by incorporating pull strategies that

help to capture online consumer

insight in order to continuously

improve the overall brand experience.

David Bishop is managing partner at Balvor LLC, a sales and marketing firm located in Barrington, IL. He can be reached at [email protected].

StarbucksleveragesTwittertobroadcastmessagestoconsumersasawaytobuildmoreengagementontheirwebsite.



Thinking Through the Implications

John Schaninger, Vice President of Marketing at Quick Chek, a 120-store convenience store operator headquartered in Whitehouse Station, NJ, helps to put the article’s implications into context from his perspective.

Q. What are the key lessons learned from this articles?

A. The article shows the potential value created when companies interact with consumers. However, it also highlights the need for resources so that companies can handle the flow of information that is generated from a process like this.

Q. What should companies consider as they evaluate plans to do something similar?

A. I’d suggest that before embarking on this type of initiative, companies need to have a good strategic plan in place as to what they want to learn, who they are targeting, how they will respond, and how it fits into their overall marketing and research plans. This will ensure that the activities provide a good fit and are supporting the company’s overall business objectives and strategies.

Q. What could companies do if they can’t commit the level of resources that Starbucks does with its site?

A. Companies can start by asking a few questions on their Facebook page or designing online surveys that customer can take. Doing so can help them gain consumer insights more cost-effectively before investing in more complex programs. The key is that companies can leverage these insights to make more effective decisions about the business that help improve the consumers’ experience with the brand.

For instance, prior to launching our latest sub campaign, Quick Chek shared the proposed billboards with consumer focus groups. We then selected the top two and posted them on Facebook for voting and comment. Our fans overwhelmingly responded in favor of one board over another. Interestingly, the billboard we had planned on using, while the most popular among focus groups, received very negative comments during the online polling process. Ultimately,



based on the online consumer insights, we made a decision to go with the fan-supported billboard.

The point is that these types of applications can provide you with an incredibly rich source of customer insights that are difficult to gain from other, more traditional research methods. At the same time, the online tools simply strengthen a company’s research capabilities.

Q. Given that this technology can change what and how companies engage in consumer research, what do companies need to be aware of as they incorporate this into their internal processes going forward?

A. It’s important to remember that many successful companies have been doing this for years. Before the internet, companies captured consumer feedback via store team comments, comment cards, letters, phone calls, and in some instances, customer panels. Today, the internet, and Facebook in particular, have created these types of giant, “uber-panels,” with the expectation of two-way feedback and action.

The pull side_of_social_media (08-11)

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