The new Starbucks CEO is Brian Niccol. You may not know the name, but his strategy shows up as extremely relevant and helpful to you right now.
Brian came to Starbucks from Chipotle with a mission to increase financial performance and get Starbucks’ stock price rising again. His main strategy? “We are getting back to being Starbucks” – refocusing the brand back to a welcoming coffee house.
Since he started two weeks ago, Starbucks shares have risen in anticipation of success.
His approach identifies as different from his Starbucks predecessor, Laxman Narasimhan.
Laxman led a technology-heavy company with digital and physical guests clashing. He moved Starbucks into the discount bundle wars by offering a coffee and a baked item for one price of $5 or $7.
That did not go well, instantly undoing decades of brand equity that supported the premium pricing of Starbucks and plunging them into a value bundle pool, where Burger King, Taco Bell, McDonalds, Chili’s, and everyone else who bundles swims.
All of a sudden, Starbucks became defined by price. Not a good place to be.
The Lesson
Have you separated from what made you successful in the first place? Do you tell an economic or technological story instead of the incredible brand-building story you have told your whole lives?
Experience tells me that independent brands have stories that guests want to hear – of family, or personality, uniqueness and connection- much greater than at an international brand like Starbucks.
Tell that story!
The Details
In a letter called “Back to Starbucks,” Brian outlined four main pillars of his strategy for employees, customers, and stakeholders:
- Empowering baristas with the best tools to do their jobs
- Meeting customer expectations on quality and service
- Elevating in-store experience
- Telling the brand story
When you write your own equivalent list that outlines your strategy, you focus the efforts of you and your people to win in a challenging environment.
Taking Action or Stuck?
Every day I work with clients who do this effectively, and their sales increase all the way up to the high single digits.
There’s another group of people who have defensive strategies or do not take action or pay attention, and their sales remain flat – or only slightly up (and only because of menu price increases). So I convince them to act differently and in their self-interest.
A third group of people feel petrified or stuck – challenged by a market that makes them earn every notch of guest count – and I see their sales decline. So I wave my hands in the air and jump up and down to direct their attention toward the opportunity to be unstuck.
Learn from Starbucks. Refocus on the special and unique aspects of your brands. Take action in operations, food and beverage, and marketing to create significant increases in revenue and profit.