“Starbucks represents something beyond a cup of coffee,” says Schultz. “While we are a coffee company at heart, Starbucks provides much more than the best cup of coffee – we offer a community gathering place where people come together to connect and discover new things. We are always looking for innovative ways to surprise and delight our customers.”
When you go out to buy a coffee, what is it that draws you to the store with that familiar siren logo? Is it the great coffee? Perhaps. Or is it more than that? Schultz believes that he has created a culture and that his company is at the very heart of that culture.
“What Starbucks has created around coffee is an extension of the front porch,” says Schultz. “If you look at the UK, the English pub is an extension of people's homes but for a different beverage. Our stores have become a gathering and meeting place in addition to the coffee.”
From the music that plays throughout the stores to the comfortable lounge chairs to the friendly service, Schultz wanted Starbucks to be a third home away from home for its customers. “We believed very early on that people’s interaction with the Starbucks experience was going to determine the success of the brand,” says Schultz. “The culture and values of how we related to our customers, which is reflected in how the company relates to our [employees], would determine our success.”
It is for this reason that Schultz has maintained strict quality control over all his stores. From a rigorous training program for all employees to one of the most generous compensation packages in the business world today, Schultz has tried to ensure that his staff contribute to keeping a friendly and relaxed atmosphere in his stores. “We thought the best way to have those kinds of universal values was to build around company-owned stores and then to provide stock options to every employee, to give them a financial and psychological stake in the company,” says Schultz. “I would say strongly, the success of Starbucks demonstrates the fact we have built an emotional connection with our customers…Our product is not sitting on a supermarket shelf like a can of Coca-Cola. Our people have done a wonderful job of knowing your drink, your name, your kids' names and what you do for a living.”
Schultz has refused to franchise his stores for this very reason. “It would have been hard to provide the level of sensitivity to customers and knowledge of the product needed to create those Starbucks values if we franchised,” he says. “You can be just as entrepreneurial and experimental in a company-owned model.”
Schultz believes that great brands aren’t built on ads or promotions. In fact, Starbucks has done very little marketing, growing primarily by word-of-mouth. “We look at the brand not as a piece of advertising but everything we do communicates who Starbucks is,” he says. “We have no patent on anything we do and anything we do can be copied by anyone else. But you can't copy the heart and the soul and the conscience of the company.”
Lesson #3: Build a Strong Brand
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