experience matters

At the annual investors meeting last week, coffee brat Howard Schultz, Starbucks CEO, went on the offensive regarding the perception that his coffee is expensive.

Howie (I feel like I can call him that since Howard is my middle name) made two key points. First, that Starbucks has “…become the poster child for excess…” Man, Ozzy Osbourne might have an argument with that if he could still form a sentence.

The second point he made was that because of the extraordinary taste of his coffee, it is a great value. “Don’t let anyone tell you their coffee is the same as Starbucks because it is not.” Oh, and by the way, they have plenty of coffee under $4.

Finally, Howie announced a forthcoming ad campaign that will convince people Starbucks is not as expensive as they are perceived. He said that recent campaigns have generated strong response. So here is my question – what exactly is a “strong response”?

I’m a believer that all campaigns should be driven by an insight, a consumer truth as one of my colleagues here likes to say (thanks for the line, Roger). So, yes, the fact that we are in a recession/depression/AIG induced spiral and people want to save money is an insight. But is it the right insight for Starbucks to act on?

My argument is that Starbucks and the whatever $ cup of coffee isn’t about the cost. It’s about the brand. People who drink it — drink it religiously and I don’t think it’s about the taste. Its about walking around with that logo on the cup. Maybe it says, “Hey, I can afford Starbucks.” Maybe it says, “I’m cool.” Maybe it says, “The coffee my office gives me tastes like mud water, the kind that Bear Grylls drinks.”

Is that a Grande or a Venti?

Look up Starbucks on Facebook. There are over 125,000 addicts (more than the amount of people Oprah launched with). You can send authentic Starbucks coffee to your friends. You can do the same with Dunkin Donuts, but the amount of people signed up is significantly less.

The point is that if you are going to launch a new campaign, especially in this environment, you better have the insight right. You better be sure that price IS the main driver to influence consumer behavior because if you are wrong, and you are Howie, you risk withdrawing from your brand bank in a way that you may not ever be able to deposit again. <Insert your own AIG reference here.>