Don't Need Help, Just Need A Latte!

Did you know that over 167.1 million Americans drink coffee?  In Vegas, they'll give odds that four in 10 coffee drinkers will take it black.  The average consumer drinks 1.64 cups of coffee a day in America.  In 1962, the average American drank only 3.12 cups of coffee a week.

Coffee is such a mainstay of our society today.  You almost can't drive in any major city without seeing a Starbucks or Peet's or some shop selling coffee every block or two.  Now enters Dunkin Donuts and McDonald's getting into the latte craze. Yes, the Harley Davidson crowd drink lattes as well. 

The top 10 coffee chains in the U.S. (2007, as reported in the Los Angeles Times)

  • Starbucks
  • Caribou Coffee
  • Tim Horton's
  • Coffee Bean & Tea Leaf
  • Coffee Beanery  
  • Seattle's Best  (which happens to be a subsidiary of Starbucks!)
  • Peet's Coffee
  • Tully's
  • Dunn Bros. Coffee
  • Port City Java




Since I'm such a consumer of and loyalist to Starbucks and Peet's, I thought it worthwhile to use them as an example of how they are missing out on using the email channel and generally eCRM to help create loyalty and value in a low-cost advertising tool.  They have some good ideas, but generally coffee is a local marketing phenomenon. The winner of this great market chase will find ways to connect the national brand and customer loyalty to the life-stage events and local market trends of their customers, while using email to build incremental value. So, how do these two companies fare in using the Internet and email to drive customer loyalty? 

Peet's Coffee:  I really got a kick out of the "eCup" concept a friend of mine sent me. I loved the idea so much, I use it today to reward my coffee lover colleagues with a little treat through email.   But the company's mainstream program lacks the local touch and relevance that could add to my local experience.  It had a nice viral campaign earlier this year, but everything is mass in nature and diminishes the value of the brand with such nonpersonalized methods of merchandising.  I guess Peet's marketing folk think the only people that will respond through email are the ones buying coffee by the bag or special roasts.  But Peet's does make the best espresso, so if its strategists could find it in their hearts to add a double shot to their local marketing efforts and be a bit more creative in connecting their customers through editorialized content in email, I think they'd see a better reception to their marketing tactics in the channel. 

Starbucks:  I travel a lot, and there are more Starbucks than they there are public restrooms.  I spend more with this company than any other food/beverage brand in the space.  But Starbucks has really missed the boat with email marketing.  Its programs are so generic and merchandise-based they are a waste of my inbox.  I usually don't infuse my personal consumption patterns on a brand when I analyze their programs, but I am the perfect customer for Starbucks, and email is a worthless exercise to me as a consumer the way it's run today.  I don't fault Starbucks' email team. I'm sure they have a charter: branding and merchandising. 

But with the competition in the market coming from McDonald's, Dunkin Donuts and every other local coffee shop, it's a wonder Starbucks isn't t losing market share.  It could use email in so many ways to build loyalty and connect with its consumers.  For example, how about cool viral programs for teens that play off of the "Meet at a Starbucks" concept?  Weekly emails should be utilitarian, community based and valuable to the consumer.  While Starbucks doesn't buy into discounting or loyalty programs (aside from its credit card programs), creating exclusive email customers could be the next wave for this group that can be managed for the "traveler" and the "socialite."  Imagine if 10% of the company's consumer base subscribed to email -- what type of market pulse could it get for under $10? Well, email's not that cheap, yet! Starbucks consumers would be more than likely to exchange opinions, views and advocacy for a free cup of coffee.

What both of these companies are missing is the local connection with their eCRM efforts -- email can help with this in so many ways.  Email is not just a promotional tool.  It's a tool for news and information, building on a local experience, an advocacy instrument, and a reinforcement for the customer experience that can be continual, timely and perfect for the mobile customer.  This program won't alienate me as a customer, as convenience and habit drive loyalty. But these companies should save the money they're spending on their sites and email right now, because it's not building the customer value I'd expect. 

I saw a sign from a panhandler the other day in San Francisco that drove this thought home. I never usually pay these guys, but the sign was so funny, I had to donate: "Don't need help, just need a Latte."

If the guy had an email address on his sign, I would have sent him an "eCup".

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