Starbucks’ New WiFi Plan: Building Customer Loyalty

Howard Schultz’, CEO Starbucks, announcement yesterday on two changes in Starbucks’ WiFi services demonstrates how even a large corporation must pay attention to customers on a local basis. The announcement took place at the Wired Business Conference “Disrupted By Design”. I’ve written about Starbucks before and how they shift their business model to meet customer expectations.

There is a lesson for small and local businesses in this change at Starbucks.

First, starting July 1, 2010, WiFi service at Starbucks will be free. This move reinforces the neighborhood/community aesthetic at the heart of Starbucks’ marketing. The free model follows a trend already instituted at most airports and many other public spaces. Moving to a for-pay model is a disconnect in the “public plaza” feel Starbucks customers expect, especially after experiencing the free model outside the Starbucks store door.

This is the second step to free WiFi service at Starbucks, a couple of years back they shifted from a pure for-pay model with T-Mobile to ATT with a model featuring  two-hours free daily with a registered Starbucks card and small service charge following the first two hours in a day. Granted, that’s not an expensive proposition, but just typing it cramped my fingers and it confuses many less technically comfortable customers. This change is much easier for customers to understand and act on.

Second, a new Starbucks Digital Network will be introduced later this fall. A partnership with Yahoo! and featuring free access to paid sites such as the online Wall Street Journal and other premium sites, the Starbucks Digital Network offers a new reason for Starbucks to be the preferred choice for customers. McDonald’s wired up 11,000 of their restaurants in 2009 and offered free access to customers and McDonald’s coffee business is major competition to Starbucks, so this new Starbucks access model is probably a response to McDonald’s marketing.

Main Street businesses are always looking for a way to build loyal customer relationships and gain an edge over their competition. Small businesses can use this example from Starbucks as a guide for another way to find a way to differentiate themselves from their competition. Of course, a small business will probably not get the national or international news coverage nor will they probably be able to swing a deal with Yahoo! or other major corporations to present exclusive offerings, but small businesses can find equally enticing draws for their local customers.

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Best 2010 Super Bowl Ads

Yep, once again the Super Bowl stuffed us with new ads: Betty White and Abe Vigoda took turns getting stuffed on the playground gridiron: Budweiser vacillated between celebrating their brand’s glorious past with another Clydesdale ad, and it was nicely done, and celebrating the dumbest party scenes imaginable with Bud Lite (full disclosure: Bud Lite is my favorite summer beer for closing out weekend chores in hot weather, the main advantages being that it is cheap and watery); and Danica Patrick helped GoDaddy.com dose us with really low level sexual humor.

But two ads stand out in my mind as something special and, even though the ads are built around huge brands, they teach what small business can do in advertising; David Letterman and Google.

Why Google?

This is simple, and that is the Google ad’s strength. Google told us a story, a very familiar love story, and demonstrated how their product helped this story happen. With only a simple music track and some background sounds (check the baby giggle at the end of the ad), a quiet track compared to the rest of the overblown loud ads, Google told the story through the search field of their own home page. They kept their brand in front of the audience during the entire commercial and showed how their suggested search terms lead the protagonist through an entire love story, first meeting through married-with-kids, set in Paris. The whole ad demonstrated Google’s effort on keeping things simple, staying centered on search, and on being relevant.

Google’s ad was an obvious response to Microsoft’s Bing ads showing how Google’s search can bring up too broad a response. Google showed how that broad response can bring serendipity. What will be important is seeing whether Google will follow this up with more advertising to counter the Bing ads, one ad will not hold back the tide (Apple’s “1984” ad notwithstanding).

Why David Letterman?

Because each ad for these two large brands worked on a human scale, they told a story, and they were smart.

Personally, I am no fan of David Letterman’s humor. I am more of a Leno-O’Brien-Fallon kind of guy, I like the positive. To me, Letterman just has too much of a nasty side to his humor. But this ad was smart, it used surprise, and it used a pretty negative situation and turned that into a positive. Jay and Oprah appeared with Dave, they even appeared on the same couch.

My wife and I looked at each other in shock and swore that Oprah and Jay were celebrity lookalikes, but that theory was dashed almost immediately after the game when a promo came on confirming that all three people were the real item and not dubbed or faked in any way. Jay and Dave together on the couch, after the internecine war when Dave was passed over to Jay almost 20 years ago, still passing barbed comments with Oprah, the queen of togetherness, sitting frustrated between them.

Who wins with this ad? Everyone. David Letterman wins by having himself linked with Oprah and Jay while he is sitting atop the heap of late night television (although Conan was giving him a good run for his money that last two week before he bowed out of NBC and the Tonight show). Oprah wins because she is winding down her show and preparing for some future that will probably not involve her sitting on an island counting her billions, she is too motivated and engaged to waste her time lounging around (I am waiting to her about her second act). Jay wins because he got great publicity on the competing network that might help pull back some of the audience NBC lost with their business-busting moves.

So what did we learn?

Keep it simple. Tell a story. Demonstrate your product or service. Be smart and respect your audience. Stay true to your brand. When everyone else is yelling, consider whispering.

The Losers? (according to me, anyway)

Dockers and CareerBuilder.com. Really guys? The best you both can come up with is people in their underwear? Seems like both creative teams got lost on the No Pants Day public transit movement. At least the creative teams have not seen a Naked Bike Ride (no link, too NSFW, but you can Google it).

Intel. A sad robot? What about the other sad robot commercial that appeared about an hour later? I forget what the second sad robot advertised, but it was a complete parallel.

Punch Buggy? Gee, when I was a kid the VW Beetle was called a ” slug bug”, and for good reason since it came stuffed with some 40 horses in the trunk. Actually, I liked the ad and I think it communicated the brand pretty well, but where did this punch buggy term come from? Maybe it’s one of those “Hellman’s” versus “Best Foods”, or “soda” versus “pop”, geographical differences.

Oh, yeah, that was a great Super Bowl, too. I actually watched the whole thing through without switching channels this year!

UPDATE (2/8/2009): You can get the full story on the Dave-Oprah-Jay ad from the NY Times.

Five Reasons Small Businesses Should Use Twitter

Small business marketing can be tricky, it needs to reach your customers quickly and easily without costing an arm and a leg. Twitter, no matter what the buzz you’ve heard, is a great communication tool that can help you with marketing and sales. Here’s why:

1. Most business is small business.
More than 99% of business in the U.S. is small business, defined by the SBA as under 500 employees (more staggering, the percentage is actually 99.7%). But 500 employees is a really large business in most of our eyes, so a more important number for this discussion is that over 98% of businesses in the U.S. have fewer than 100 employees. Mike Clough, a serial entrepreneur and SCORE consultant, has a very readable blog post that helps parse the dense SBA figures (and you might want to read Mike’s blog on a regular basis).

Why are these numbers important? They show that if Twitter can be used in business, and I’ll write more later on businesses using Twitter, then the overwhelming majority of businesses using Twitter will be small businesses.

2. Your customers are using Twitter.
And more will begin using it this week. According to Nielsen, Twitter grew 1382% between February 2008 and February 2009, rapidly expanding from less than a half-million to over 7 million users. The overall numbers are still small, but this growth rate means over 91 million people using Twitter next February.

Twitter users are not kids. Better yet, the sweet spot of Twitter use is in the 35-49 age group, this group represents roughly 42% of all Twitter users and the core age group of the working world. This number will definitely change as Twitter use continues to grow, but it is an important age group for small business sales.

3. Your competitors are probably using Twitter and they are talking to your customers.
Come one, you already know this. When was the last time you tried some marketing or sales activity and you didn’t find out or know that a competitor was already doing this? The boom in Twitter business use followed the boom in Twitter users, it’s an organic growth curve, but you can still get started now.

The New York Times recently covered business use of Twitter and mentioned some small retail business uses along with the typical array of large corporations, but they left out the backbone of American business. They left out the business-to-business, industrial/commercial aspect of business. Twitter talks to and through your distribution chain, reaching your reps, distributors, and retailers, as well as your end customers, affecting end-to-end marketing along your entire distribution chain, no matter how many tiers and branches in that chain.

4. You can extend customer loyalty.
There’s a period following the purchase process where the customer becomes loyal to your product or company. Continuing that loyalty can be hard for small businesses, especially when repeat business is spread over longer periods. You can use Twitter can keep customers in the loop on your product or service, keeping them in a positive purchase state long after the sale is complete, possibly through to the next sale. And the word-of-mouth

Even better, it doesn’t matter whether your customers are local or geographically dispersed. Your regular sales skills are the main requirement in Twitter, the same as the conversation on the phone or in the office. One good difference is you can reach multiple customers at one time and then handle individual conversations through other methods appropriate to the customer need.

5. You determine how much time you spend using Twitter.
Twitter use grows organically, it is a self-defining use responding to the conversations surrounding your business. Yes, there is the group that tweets what they had for breakfast, but far more serious questions and discussions also happen on a minute by minute basis. Finding these discussion depends on your customers and their habits, but the best place to start finding them and listening to their discussions is by using a form of search.

Use TweetDeck or Seesmic, desktop applications that will continually track and report uses of searchable terms used in your business. Or use TweetBeep to get search term uses emailed directly to you (be careful with TweetBeep, it’s great for lower search activity but can overwhelm your email inbox if a search term is heavily used). These tools can get you started effectively using Twitter in business, but there are many other methods as well.

So that’s five reasons to start using Twitter today. There are many more reasons, but they will be specific to your business needs, feel free to comment here or email me with specific questions and I’ll try to give you some quick general answers to your possible uses.

Lessons Learned From The Lehman Letdown: Who Owns The Clients?

OK, the big news over the weekend and today was the crushing letdown of Lehman Brothers. Lots of news outlets are carrying the story, bu the lesson for businesses, especially small and medium businesses, was i a small quote from one of the Lehman staffers to the Financial Times. He said:

“I’ve had people calling me from telephone boxes. In the old days you’d just pick up your Rolodex and you’d bugger off. Now everything in your life is with the company,” said a former employee.

The point is that technology has made one of business’ age-old problems simpler: getting a handle on customer lists.

Traditionally, sales people kept their Rolodex with a list of customers and Finance kept a customer list, and neither list matched because the sales person met with a user and the finance department met with a customer finance person. Now days even a very small business can keep a single list of customers, and larger small businesses (oxymoron intended, companies are still defined as small businesses up to 1500 people) and medium business use applications like SAP to run hings and maintain customer lists that mine sales opportunities.

Collecting and maintaining that customer data was difficult when sales people maintained their own Rolodex, and the value of the information often left with the sales person. But now the value of the information can and should be maintained in a central database that informs and tracks customer activity in a way that enhances customer service and company sales, along with securing the customer list in a way that aids customer retention.

The business owns the customer relationship. The sales person may own the face to face relationship, in fact the sales person is instrumental in creating and maintaining the business relationship, but the business owns the financial responsibility as well as the customer access.

Does your business own the customer relationship? Do your sales people have outside lists of your customers? Do you have a plan in place to centralize the information so you can ue it as a strategic sales advantage and in case there is a need to recover the informationwhen a sales person is unavailable for some reason?

You would be surprise at the number of companies that still do not own their complete cutomer lists and the tumult that transpires when a sales person goes missing.

Let us know how you address owning the customer list and share the strategies you use.

What Does Starbucks’ Business Pause Say About The Customer And Small Business?

You could not miss the news yesterday: Starbucks closed their U.S. stores Tuesday night to spend three hours working on their customer service.

Starbucks is an incredible success story about meeting customer needs and desires. I don’t use the term “desire” lightly, Starbucks is really all about the desire, the customers desire. Visiting Starbucks is an event. Even when it is an extremely short visit, a drop into a Starbucks has a consistency and familiarity that screams out the value the company places on customer service.

And that’s why they closed for three hours, to raise their level of customer service. Although the specific activity taking place in all those 7000-plus Starbucks was barista training, the actual effect was to reinforce the customer experience and deliver better customer service.

So what does this mean to small business? Here’s a huge company, over 135,000 baristas in the U.S. alone, that stopped to refocus on customer service and a prime differentiator for their business. Small businesses everywhere have learned to use customer service as a differentiator from their competitors and especially from big business, this is a small business way of life: learn to Dance Among Elephants.

That a big company like Starbucks recognized this need for superior customer service demonstrates how important customer service is to all businesses. Even better, Starbucks plans to expand this refocus activity internationally to all their stores and include the 4000 licensed outlets, too.

Here’s my challenge to you: Take a few minutes, wander around you business. Is it time to refocus on your core business strengths? Is it time to renew your focus on customer service?