Selling Frappuccinos in the UK

Below, I have embedded an ad from a campaign that Unruly Media is running in the UK for Starbucks. I would like to hear your opinion. Beneath the video, I have given mine.

One of the challenges for any company is to decide if it wants to go for fast growth and large profits, sacrificing a few of its values along the way, or if it wants to remain true to its roots, even if it has to sacrifice some economic gains. For most businesses, profits come first. This is especially true for public companies, where there is tremendous pressure put on management by the shareholders to go for growth and profits. I think you can guess which path Starbucks chose.

Starbucks began as a place that wanted to be true to the coffee and the café experience. Now it boldly sells milkshakes, with whipped cream and caramel sauce.

To be honest, I like the graphics, the bright colors and the crisp audio of the spot. It has a sharp feel to it. The business school-trained part of me thinks it’s a fine ad, and I know that Frappuccinos have some of the best profit margins at Starbucks, so I understand the reasons for the campaign. At the end, however, watching this ad reminds me why Starbucks took the “Coffee” out of its new logo. How about you?

[Disclosure: Unruly Media, an advertising company, asked me to write an editorial about the ad. Feel free to pass it on to anyone you know in the UK]

I know I’m getting older, but. . .

I received a letter in the mail today that kind of surprised me. The letter was from the AARP—formerly known as the American Association of Retired People, a lobbying organization that advocates for people over 50—and it contained my new membership card (see photo below). Now, I know that Portland is a place where “young people go to retire,” but this is a little ridiculous (I’m 34). Isn't this kind of like McDonald's marketing Happy Meals to 6 year-olds? You know, get them hooked early...I think I’ll tell the AARP to try again in twenty years.

What the . . .?

Tired of paper transit tickets? (updated)

Today, I want to step away from coffee for just a moment. One of my favorite things to talk about is entrepreneurship, and I have something I would like to share with you.

When I’m out traveling around the city, I prefer to walk or take public transportation. Walking around, you really get the feel of a place, and on the bus or the train, you don’t have to stress about traffic.

Since I take the bus and the train pretty regularly, I can say with confidence that it would be nice to be able to pay for tickets using an app on my phone, especially when riding the bus. Even better, the phone would serve as a ticket itself.

Tri-Met (Portland’s public transit agency) doesn’t have a system like that yet. However, a couple of my classmates from Portland State’s MIM program are trying change that. Nat Parker and Michael Gray have started a company called GlobeSherpa to develop mobile phone apps, and their most promising app at this time is called TransitSherpa, an app that acts as an electronic ticket management system for Tri-Met. I’ll let Nat explain:

Their company is currently in negotiations with Tri-Met to make the system a reality, but they need some funding to speed things up. Tomorrow evening, at 5:30pm, Nat and Michael will be at the Backspace café/pub competing in the second-to-last round of the Oregon Entrepreneurs Network’s Seed Oregon competition, a competition that helps start-up companies with funding and guidance. The winner is determined by popular vote of the audience, so the more supporters TransitSherpa has, the better chance it has to win. The winning company gets to present at the Angel Oregon conference in March, where it could acquire the funding it is looking for.

If you think that a Tri-Met ticket app is something that you would rather have sooner than later, come by Backspace tomorrow evening at 5:30 and support TransitSherpa. It costs $25, which I know is kind of steep, but it’s supposed to include some kind of food and drink spread. In addition, Nat has promised me that he’s going to be especially entertaining during his presentation.

You might wonder if I get anything out of this advertisement for them. Nope. I’m just spreading the word for them and trying to speed up the process of creating a Tri-Met ticket app. It’s 2011, and the time for e-tickets is here. Let’s help TransitSherpa make it happen.

No más

Update: GlobeSherpa won by two votes! Congratulations and good luck at the next round.

Be Nice to Your Guitar (and Your Customers)

This morning I listened to a live webinar put on by John Bernard of Mass Ingenuity. He spoke about how the combination of social media, cloud computing and the millennial mindset (not wanting to wait for anything) are combining to change the ways companies interact with their customers in ways so profound that it is difficult to comprehend the changes how the new marketplace works. He said that we have moved from the era of mass production into the era of mass customization, where products and services are more tailored to customers’ needs. He especially mentioned how meeting customer needs through good service is more important than ever.

Bernard cited United Airlines’ baggage handling service miscues in the case of musician Dave Carroll as an example of how companies should not respond. In case you haven’t heard, Dave’s $3,500 Taylor guitar was destroyed during one of his trips on United Airlines and he went through months of troubles with the company to try to get them to rectify the situation. Things finally turned his way after he wrote a song (complete with music video) about his troubles that became a huge hit on YouTube. There are actually three videos in the whole series. Here’s the first one:

It’s true that some people write bad things about a company just to advance their own agendas. In the past, the companies might be able to ignore them and the problems would go away. However, with the speed that information gets passed around these days, it is imperative that businesses monitor what is being said about them in social as well as traditional media (that reminds me, I need to Google ‘Caffeinated PDX’ to see if there’s anything being said about it. Hold on a minute, I’ll be right back. . . . . Okay, we’re good for now). While it is impossible to know everything that is being said about your company, you must take care to monitor the problems and put out any fires before they get going too strong.

Although I question Bernard’s claim that this one incident with United led to an $180 million reduction in market capitalization for the company, his point was a good one. Customers have more power to expose companies’ misdeeds than in the past, so companies must be more alert and responsive than ever. Of course, those of you with your own businesses already knew that, right?

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It's Hard to be Julia

I think I’m in the wrong line of work. Reportedly, Julia Roberts pulled in a million plus for shooting an ad for Lavazza’s automatic espresso machine—without saying anything. All she does is sip an espresso and smile. Here's the commercial—Don’t worry if you don’t understand what the Italian actors are saying. From the look on her face, I don’t think Julia does either.

Apparently she really does have a million dollar smile. That means that mine ought to be worth at least a cup of coffee (maybe even a vacuum pot). I think I’ll have my agent call Lavazza’s marketing department. . .

In other celebrity coffee endorsement news, George Clooney and John Malkovich team up to sell Nespresso.

A longer version of the ad is here. George and John aren't doing so badly for themselves either.

Rant-Choked on Consumerism

Ahhh, the holiday season is upon us! I noticed this a couple weeks ago when stores, eager to take advantage of the mild economic recovery, began putting up Christmas decorations—before Halloween! Memo to store owners: putting up your Christmas junk that early doesn’t make me want to buy stuff, it just annoys me. I imagine I’m not the only one who feels this way. Each year the shopping season gets earlier and earlier. Will there soon be Columbus Day Christmas sales? How about Labor Day? We could just make Christmas a year-round holiday. What do you think about making red and green our national colors and the Visa card our national symbol? Ugh.

I’m not big fan of the holiday season to begin with, but I usually spend my time writing about other things. So what prompted all of this ranting? Well, we got the new Bed Bath & Beyond catalog in the mail today. Judging by the looks of things, Americans’ Christmases will once again be filled with lots of useless items that people don’t need. It appears our addiction to cheap imports is not waning. Here are a few of the things that, according to the BB&B marketers, you just MUST have.As seen on TV

Click to read more ...

Coffee is NOT on the Way Out

Janet Morrissey wrote an article for Time this week that implied that young people are not going to drink coffee in the future because they drink Red Bull or other energy drinks instead. I disagree, and judging from the comments, so do many others. According to the article, the heavy marketing that energy drink companies have done to give energy drinks a ‘party drink’ image is a sign that coffee’s future is not bright.

There is no question that the energy drink companies have been pushing hard to reach college campuses. At PSU, there is a vehicle parked somewhere on campus at least once a week where young, good-looking people hand out free energy drinks to students. And I admit to being surprised when I read about the twenty-something PR consultant who said he didn’t drink coffee because it tastes bad (He drinks Red Bull, and he complains about the taste of coffee?).

 However, if you spend much time in coffee shops, you see young people everywhere. When I worked at Starbucks in Boston, we had a large group of regulars that came over every day from a nearby high school (sometimes twice!). The cafés around PSU are jammed every day with the 18-24 year-olds that are mentioned in the article. I stopped in at the PSU library the other day and was surprised to see a new coffee bar in the lobby. This evidence leads me to believe that coffee is not doing too badly in the under-30 crowd.

If you want to make the case that this age group won’t be drinking more Folgers in the future, that’s different. After all, this is the generation that came of age during the golden era of Starbucks. Of course they’re not going to accept the taste of pre-ground or freeze-dried coffee that has been stored in a can for six months! However, predictions that young people will not be drinking coffee in the future are like predictions that bell-bottoms would never be seen again after the 1970s. They make for a good story at the time, but years later, people look back at and laugh about them. In twenty years, we will be able to look back and this one and laugh too.

[note: Portlanders will be proud to hear that Stumptown was mentioned in the article as a place where younger people do have a good coffee experience (at the Stumptown Ace Hotel in New York City)].