Starbucks is Stupid: The Boiled Peanuts Sales Model - Ministry & Business Marketing, Media, and Strategy Blog

Seth Godin, a marketing guru with an actual working brain, recently shared a funny story about a hobby shop near his home. It could've been the coolest little model train retailer in the land. But the owners are quickly settling into general store mediocrity. According to their billboard, model train fans are also interested in coffee and lottery tickets.

My local version of the sell-everything, lost in the shuffle store, actually lists boiled peanuts as one of their staples. Did I miss the Jimmy Carter comeback tour? Has half of Georgia migrated south to the Tampa metro area? Nope. But just in case you get a hankering, rest assured that boiled peanuts are always available there. Pig's feet and hummus distributors are reported to be in talks with the store as we speak...

Over the last few years, Starbucks has fallen victim to this boiled peanuts sales model. Instead of focusing on their core offering--coffee--and building loyalty & customer affinity around the fruit of the bean, Starbucks has diluted their brand to the extreme.

SBUX now sells breakfast sandwiches which overpower that classic fresh ground coffee smell and clutters their stores with a literal boatload of overpriced CDs, DVDs, teddy bears, candy, bottled smoothies, and even picnic sets. Did I mention they also sell all the requisite coffee/hot drink crap--including coffee mugs, coffee pots, press pots big and small, travel mugs, tea sets, and tea bags?!?

Exit CEO Jim Donald. Enter Starbucks founder Howard Schultz.

Like every good former Starbucks drone, I know that back in the 1980s Schultz saw the coffee house revolution coming and bought out his Starbucks partners, who wanted to keep their stores a simple coffee and tea wholesaler. The rest is capitalist history...

Upon his return in January, Schultz confessed that Starbucks had strayed from its coffee core and promised a quick return thereto (and to the profitability that comes with it). That's easier said than done, but Schultz recently showed his java resolve by closing all North American Starbucks stores for three hours, for the sole purpose of indoctrinating, er, educating baristas about the wonders of the bean. I'll keep you posted on their progress...

In the meantime, think about your ministry or business and how to avoid the boiled peanuts model.

For ministries, your job is to bring glory to God and tell everyone about the good news of Jesus Christ. That is, that Jesus was God and that He lived, died, and rose again, just as He promised. And you're to encourage folks to walk with Him who is not just a mere good teacher or the ticket to your best life now. Jesus Christ is truly, to steal from the late great Francis Schaeffer, the God who is there. If you're not proclaiming as much, Scripture says you are missing the mark.

Likewise you business owners/execs should learn from Starbucks' mistakes and streamline your product mix. And cut ventures that detract or distract from your core competencies.

One last story...A friend of mine is an extremely successful architect in a major U.S. city. His main office is located in an uber-cool, turn-of-the-century brick building that once served as a train depot. In fact, box car tracks still run past the loading dock. Very cool, indeed.

One day I asked my friend if he owned the building. Though he certainly had the money to buy it, he said no. When I asked why he didn't own the building, my friend put it bluntly: he isn't in the real estate business.

So I ask you: what business are you in? Are you in the coffee business? Then why are you diluting your brand by making movies about spelling bee champions? Are you in the model train business? Then why are you advertising lotto tickets?

Think about why you're in business and hone your offerings accordingly. Scripture says a double-minded man is unstable in all his ways. It's just as true for business as it is for ministry and walking with Christ.

Starbucks is Stupid...Dunkins Donuts is Ingenious - Ministry & Business Marketing, Media and Strategy Blog

Yesterday my beautiful hunk of Detroit steel needed new tires and an alignment fix, thus I was forced to hole up in Dunkin Donuts for a couple of hours. As I sipped my blueberry coffee (yes, I pollute my coffee on occasion) and gazed upon the bright but not too bright Dunkin Donuts/Baskin Robbins ice cream shop color scheme, it hit me again: Starbucks is stupid and Dunkin Donuts is ingenious.

Don't get me wrong. I love Starbucks! I became addicted to the "bucks" after a stint there in college. From then on, I've taken great pleasure in converting friends to the glories of the true fruit of the bean. But, as you may have heard, Starbucks is hemorrhaging money like a wounded animal. In fact, Starbucks founder Howard Schultz recently returned as CEO in hopes of righting their cash cow.

In a nutshell, Dunkin Donuts--which sells 40,000 cups of coffee/week--is succeeding because they keep trying and remain humble. New product rollouts, discounts, fun promotions, and brilliant marketing that pokes fun at Starbucks, all conspire to build group identity and loyalty among their customers. Not so with Starbucks.

Even when I worked at Starbucks way back when, they were arrogant. They discontinued frequent shopper cards because "Starbucks is a premium brand." Affinity groups were unnecessary. Four dollars was a bargain for a latte. And forcing customers to pay T-Mobile for in-store internet access was part of the privilege of being a Starbucks customer. Then their stock tanked, free-falling from a high of nearly $40/share in May, 2006 to yesterday's close at $17.99.

I hope you know what this cautionary tale has to do with your ministry or Christian business.

Our Lord Jesus Christ is extraordinarily clear: "Whoever exalts himself will be humbled and whoever humbles himself will be exalted." (Luke 18:14) The Psalmist chimes in likewise: "You save the humble but bring low those whose eyes are haughty." (Psalm 18:27) As with the Apostle Peter: "Humble yourselves, therefore, under God's mighty hand, that He may lift you up in due time." (I Peter 5:6)

Think about yourself and your ministry or Christian company. Are you trusting God or are you arrogantly enjoying the successes He's brought your way and congratulating yourself for the same?

Proverbs 28:26a tells us, "Whoever trusts in himself is a fool." Where is your trust? Is it in Christ Jesus our only Hope? Or are you reveling in your own greatness?

If you're arrogant, repent. If you're legitimately seeking Christ and for His Spirit to work through you to exalt the Father and expand His kingdom, then pray that He keeps you on the straight and narrow.

Tomorrow I'll discuss the watering down of the Starbucks brand and core offerings and their implications for your ministries and Christ-centered businesses.