In preparation for this book, I had an opportunity to speak with brand and experience experts in a range of roles and organizations. It's fascinating to learn from the stories they were able to share and the work they've done with clients. As I said in this book's introduction, nothing I share in this book reflects confidential information or insight gleaned exclusively from my team's work with them – every example provided here reflects this community's empirical assessment and publicly available data. Further, I've worked diligently to remain positive in all examples, as there's little value to dwell on negativity. While it's easy to highlight negative examples, and I'm a personal believer that we all learn from mistakes – I never fear failure – I don't feel it's necessary to highlight it in these pages. An intelligent observer can find the mistakes, and learn from them, on their own.

One of the experts that I had the opportunity to speak with at length in preparation for this book was David Mackay, a senior brand strategist at Ogilvy. David has a particular passion for this topic and offered tremendous insight into how forward‐thinking brands need to define strategies for the post‐digital transformation era.

One observation that David offered is that, today, brands are sometimes oblivious to the evolution, and impact, of experience and the importance of aligning the brand strategy to the experience up‐front. He used the Matrix metaphor, from the popular movie, referencing the Blue Pill brands that believe they are fine with the status quo, and the Red Pill brands that recognize that they must make large moves quickly to remain relevant with the modern customer. Interestingly, in his view, brands rarely fall into the middle of the spectrum, making small and incremental changes, as those offer the least ROI. As reflected in Chapter 3, Focusing on the Modern Consumer, it's clear that the lines have blurred between realistic and unrealistic customer expectations and minor changes won't make a significant difference. No one will notice or react to the new button added to the mobile application or the new navigation on the website. Customers won't flock to the brand just because you added an Alexa skill recently, nor will they flood your brand with engagement because you allow for interactive engagement via their smart TV in real‐time. Instead, the market will evaluate the brand across the entirety of the experience continuum, and unless every stage of the experience is aligned to the brand proposition, the one weak point in the experience chain will break the perception and lead to defection.

Most critical is that organizations need to believe strongly in their brand proposition and then evaluate and refine every stage of the experience to align in every respect to that branding. A perfect example of this, David highlighted, is Starbucks, which has emerged as an iconic brand that has stayed relevant through the many evolutions of the modern era.

EXPERIENCE DEFINES THE BRAND

Starbucks wasn't always the powerhouse coffeehouse brand that we know and recognize today. According to several accounts of their origin and growth, including an excellent outline provided by Britannica, Starbucks' original strategy was to remain small in operation.¹ They were founded in 1971 by three academics, Jerry Baldwin, Gordon Bowker, and Zev Siegal, all of whom loved coffee and tea. For those of you who read Moby‐Dick in high school or college, you'll recognize the name Starbuck as being the first mate of the Pequod. The three founders said that the name was inspired by the classic tale, evoking the seafaring tradition of the early coffee traders.² Even the ubiquitously recognized logo is that of a Siren, the mythical creature that was half bird and half woman who lured sailors to destruction by the sweetness of her song. To follow the origin of the Siren brings us back to Homer's epic poem, the Odyssey, but the original designer of the Starbucks logo, Terry Heckler, said he “sorted out old marine books and based the two‐tailed Siren design off of a 16th century Norse woodcut.”³ So if nothing else, you can now correct people at cocktail parties when they try to convince you that the Starbucks logo is a Mermaid. It's not. It's a Siren.

In terms of the product, Starbucks was inspired by Albert Peet's Coffee and Tea, which opened in 1966 in Berkeley, California, and continues to operate today. Starbucks opened their first coffeehouse in 1971 in the Pike's Place section of Seattle – if you haven't been there, I'd recommend stopping by the next time you're in town – and focused on selling high‐quality and unique coffee blends and brewing equipment. They weren't the café model that we know and love today. By 1981, fully 10 years after opening, they maintained four stores in the Seattle area, and had developed a cult following similar to what Peet's enjoyed in the Bay Area of California. Their head of marketing was a familiar name, Howard Schultz, but he left shortly thereafter once he recognized that the three original founders weren't interested in expanding their model to replicate the wildly successful café model that Schultz had observed during recent visits to Italy. They felt that the opportunity, and their brand, should focus on the coffee itself and not an experience that surrounds the coffee.

Thankfully for all of us coffee and tea lovers, the original founders decided to sell, and in March 1987 Schultz was able to buy the Starbucks brand and operation from the final two owners, Baldwin and Bowker. Schultz passionately committed to the café concept for Starbucks, with great results. He remained focused on the sale of beans and equipment, while adding other items to the store. In a short four‐year span, the Starbucks chain grew from fewer than 20 stores to more than 100, expanding to Chicago, Vancouver, Washington DC, and New York. This growth continued after Starbucks completed a successful initial public offering (IPO) in 1992, and in 1996 they expanded internationally. By the end of the decade, 13 short years after Schultz took over, Starbucks had over 2500 locations in about a dozen countries.⁴

Without question, Schultz understood the value of experience and the opportunity for experience to define the brand. Starbucks' brand wasn't about the coffee or the tea, as the original founders intended, but instead it was about the warm feeling that you received the moment you stepped into the store. To repeat their own words, Starbucks “welcomes millions of customers each week and becomes a part of the fabric of tens of thousands of neighborhoods all around the world. In everything we do, we are always dedicated to Our Mission: to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”⁵ That's a firm commitment to a brand premise that is absolutely demonstrated through the experience that Starbucks provides.

When you enter a Starbucks store, both then and now, you are greeted by an environment that reminds you of the comfort of home, whatever that comfort may be. If the season is cool, a fire is typically crackling in the corner. If it's warm, there's a fan circulating comfortably cool air. Smooth, modern music is playing in the background, typically not loud enough to overcome the din of conversation. Comfortable seating abounds, and those seats are filled with friends and business colleagues enjoying a drink and a chat. Elsewhere, aspiring authors, including yours truly, are peering at a laptop screen and typing furiously. The décor is consistent throughout, with dark wood, glass counters, an array of snacks, and a consistent menu of drinks – the standard array of coffees and teas with perhaps a few unique options reflecting the local culture.

In this case, I truly speak from personal experience. Throughout my career, I've had an opportunity to travel extensively, visiting all 50 states of the United States and a range of countries including but not limited to England, France, Spain, Hungary, Japan, China, India, Russia, Australia, New Zealand, Brazil, Argentina, and Panama. In each and every case, there was a Starbucks logo somewhere near my hotel, and I found myself seeking out familiarity in the foreign land, despite the fact that I was in awe of the beauty and culture of everywhere that I visited. In some ways, the song from Cheers was true, that you simply “want to go where everybody knows your name.” Not that anyone in the Moscow Starbucks knew my name, but it still had a sense of familiarity. The barista in the Mumbai Starbucks saw the jetlag in my eyes and gave me a five‐shot Americano that I remember to this day. The Christchurch Starbucks had a guy on acoustic guitar singing Grateful Dead songs. The experience has stayed with me and my memories for well over a decade. The power was in the consistency.

It's positively brilliant what Schultz and his team were able to create. A consistent experience from store to store that caters to the local and the traveler alike, bringing with it a sense of belonging, of community, and of serenity. People integrated this experience into their daily lives, not hesitating to invest as much as $5 for a cup of coffee likely of equivalent quality to the local diner down the street, where the drinks are significantly less expensive. Many other large‐scale coffee brands emerged during this time, including Peet's coffee, which inspired Starbucks, Caribou Coffee, Dazbog, and offerings within a larger menu of products at Dunkin' and McDonald's. Countless small, boutique coffee shops opened as well. All have accumulated their own followings and fans, and all offer quality products. However, the reality is that none of these have come close to approaching the following patronage or level of brand loyalty that Starbucks created through their end‐to‐end experience.

However, Starbucks hasn't been a single‐trajectory‐growth success story. Schultz retired from Starbucks in 2000, after their initial growth run, and for the next seven years, there was a period where Starbucks lost their way. As a case study published by Ivy Panda observes, the Starbucks experience became more impersonal. According to the study, by 2007, the idea of intimacy and familiarity had started to disappear, with fewer baristas greeting customers by name and large coffee machines hiding the coffee‐making process. The case study goes on to explain that Schultz, who viewed human connection as the cornerstone of Starbucks' brand promise, had been lost during this time. Schultz noted that stores were no longer familiar in design, losing that neighborhood feel that created that emotional connection between the customer and the coffee shop. In simple words, Starbucks was commoditizing, becoming another mass‐market coffee shop offering boutique drinks at a higher price than the corner diner.”⁶ Starbucks had briefly forgotten what made them unique – their brand proposition of the intimate experience – and their performance suffered greatly. The competitive offerings, including Peet's, Caribou Coffee, and the others mentioned earlier, started to develop parity of experience at a lower price point. At its low point in 2008's Great Recession, Starbucks stock dove to $6 a share, a 75% drop from their 2006 high.

Fortunately for Starbucks, Schultz agreed to return in 2007, embracing the idea of “believe in the brand and redefine your strategy” to deliver on the brand promise. In the case of Starbucks, this required that Starbucks again create a unique, distinct, and familiar café experience that would draw the customer in, but it wasn't about going back to the past. It was about embracing the future, and in his own words, “Creating the third place, after home and after work, where people will comfortably spend their time.”⁷ Schultz closed hundreds of stores, replaced several executives, negotiated Fair Trade deals, and focused on driving significant growth in China (opening the tea market for Starbucks significantly). He even noted that the food products that Starbucks sold created an odor that took away from the familiar aroma of Starbucks coffee, so he had the food items changed and the preparation process adjusted. Schultz recognized that people came to Starbucks to be productive and to be entertained, and more and more that involved electronic devices and Internet connectivity, so he was one of the first to offer charging stations and in‐store free Wi‐Fi.

Most importantly, Schultz and his executive team embraced the potential of digital technologies to again differentiate the brand experience.

BUILDING A CULTURE THROUGH DATA ANALYTICS AND ENGAGEMENT

What has made Starbucks a success story is their continuous focus on digital transformation and the opportunities that data and interactivity provide to improve the experience that every patron receives. This goes far beyond creating a convenient website and mobile application, which is the topic of Chapter 6, Time Is the New Currency — Anticipating without Being Invasive. It is the embodiment and fulfillment of the Starbucks brand statement, embedding itself in the neighborhood culture and inspiring people one cup of coffee at a time.

Doubling down on investment during a time of economic downturn required significant commitment and confidence, and Howard Schultz had this, both within himself and his new executive team but equally within the board and critical shareholders. After the 2008 recession, as part of the company's turnaround plan, then CIO Stephen Gillett created an “internal venture capital‐style incubator for digital technology,” called Starbucks Digital Ventures, and gave this internal team the autonomy to operate separately and build digital assets.⁸ This led to the launch of the first Starbucks mobile app in 2009.

The mobile app was a critical launch for Starbucks as they were working to reestablish foot traffic in their stores. It leveraged an essential pillar of their brand experience strategy, convenience, to bring coffee ordering to a previously unimagined level. Launched in September 2009, this initial MyStarbucks app allowed users on the iPhone and iPod touch to locate a store through the app, access nutrition information for various drinks, and build their own concoction via the interactive drink builder. It even allowed for users to pay for drinks via the app in certain locations on the West Coast, which was a mainly unheard‐of capability at the time. This new capability was both a novelty, which is an experience distinction strategy we explore in Chapter 7, Finding a Novel Approach to Solving a Market Need, and a foundation of the experience that Starbucks was looking to establish. Creating your drink, storing it in your application, and then using the app to push the order to the café so that it's ready upon arrival is as close as you can get to the experience of walking into your neighborhood pub and having your drink order waiting for you at your favorite stool. It was a genius move by Schultz, Gillett, and other members of the experience team.

The MyStarbucks app not only provided conveniences for the consumer, however. It also provided a wealth of data for Starbucks, as the application was tied into the Starbucks card loyalty program that was already in place. This loyalty program, which allowed users to refill a payment card and rapidly pay at the counter, was yet another element of convenience for the consumer that, in parallel, tied every transaction back to the individual. Starbucks began tracking the buying habits of the consumer and, by encouraging the individual to fill out a profile with basic information, could start to create customer profiles and personas that would ultimately guide decisions from store locations to menus to in‐store operations. Baristas could again greet the customer by name, could offer suggestions and recommendations based on the evolving profile of the individual, and could make subtle comments that reinforce the personal connection between the server and the customer. Once again, Starbucks was beginning to feel like the home away from home, and it put them back on their growth path.

The MyStarbucks app continued to evolve over the next decade, with new conveniences and capabilities being added as the device capabilities, and network capacity, increased. By 2013, four years after its launch, the app was still driving 100,000 unique downloads per week, and Starbucks processed over 3 million mobile payments per week, generated by a community of 7 million active mobile payment users. This led to over $3 billion in payments processed through the MyStarbucks loyalty card in 2012. The 10 seconds saved by ordering through the mobile app using the profile developed for the loyalty card cut 10 seconds off of ordering time in 2012, which translated to 900,000 fewer hours waiting in line across all users.⁹ By the end of 2013, the stock had recovered all of its earlier losses and then some, topping $73 a share.

LOCATION THROUGH DATA ANALYTICS

Building on the idea of analytic insights, Schultz and team recognized during this period of digital transformation that the individual consumer will only travel a finite distance for a cup of coffee, and any distance beyond that would degrade the overall experience, tarnishing the brand. Yes, there was a financial motivation behind this as well, since balancing maximum foot traffic with the cost of operating each store would optimize margins, but Schultz was relentless in his focus on experience, recognizing that experience would drive brand loyalty, which ultimately would drive revenue and margins. This initiative led Starbucks to create a Proximity to Buy model, leveraging data provided by Atlas to evaluate the characteristics of each neighborhood in which a Starbucks operates. The data set includes consumer demographics, population density, average income levels, traffic patterns, public transport hubs, and types of businesses in the location under consideration.

Starbucks continuously analyzes this data against actual store performance in similar locations to decide where to put new stores. It leads to decisions that may otherwise seem odd, such as placing four Starbucks cafés within one mile of Harvard Square or two cafés on opposing corners in New York City. Everywhere from São Paolo to Beijing to London uses these same models to optimize the store location, opening new stores and shuttering underperforming ones.¹⁰ This model has become a foundation for store location optimization, but Starbucks remains a pioneer in using the data to optimize experience.

LEVERAGING TECHNOLOGY TO DRIVE ENGAGEMENT AND GROWTH

Starbucks continued to invest in their mobile and web experience. By 2016, mobile order and pay drove approximately 25% of total orders,¹¹ and this led them to implement their customer flywheel strategy in 2017. The customer flywheel is built on four pillars: personalization, ordering, payment, and rewards. Its goal at the time, according to Starbucks' Chief Strategy Officer Matt Ryan, was to “not only drive superior business results in the short term … but also make it very challenging for digital companies to outmaneuver us in the physical world.” This was pure genius, and it continued to pay enormous dividends in terms of engagement and growth. By 2013, Starbucks had over 54 million active followers on Facebook, 3 million followers on Twitter, and close to 1 million followers on Instagram. As platforms later rebalanced, Starbucks redistributed and retained over 36 million followers on Facebook, 11 million followers on Twitter, and 12 million followers on Instagram. Schultz and team used this forum both to communicate with their customers but also to solicit ideas from them, and a solution named “My Starbucks Idea” generated 50,000 suggestions for experience improvements soon after its launch.¹²

Leveraging their internal digital incubators and suggestions solicited from their customers, Starbucks started building an ecosystem of partnerships with other innovative digital brands such as Spotify, creating unique playlists that enhance the Starbucks experience, and Lyft, making the process of getting to and from the café that much easier. They solidified agreements with the New York Times, the Economist, and the Wall Street Journal to allow content to be accessed via the free Starbucks Wi‐Fi app, which encouraged customers to not just patronize the café but to spend more time there. As Adam Brotman, the Chief Digital Officer, was quoted as saying, “Everything we are doing in digital is about enhancing and strengthening connections with our customers in only the way that digital can and only the way that Starbucks can.”¹³

That doesn't imply that Starbucks' investment in digital transformation didn't come without some speed bumps. The order‐ahead functionality, in particular, proved to be problematic, as suddenly order volume increased substantially without the natural moderation that occurs when individual customers queue in line. Fulfilling mobile orders forced those in the store to wait longer to receive their drink, and worse, those in the store were watching attentively while the mobile orders were being made. Mildly frustrated in‐store customers started to congregate near the order pickup area, and the overall Starbucks experience begin to again degrade. When some stores elected to prioritize the in‐store customers, the order‐ahead customers arrived to discover their drink wasn't yet ready for them, and they began to congregate and become frustrated. For a period of time, Starbucks became a victim of their own digital success.

Fortunately, automation and analytics again were leveraged to calibrate the Starbucks experience. Predictability models were created based on time of day, day of week, and the date, combined with real‐time inputs such as the weather, to anticipate when surges of orders would come into the store. Baristas could then plan ahead, brewing and preparing specific drinks or drink components in anticipation of demand. Further, staffing decisions could be optimized to ensure that there was coverage for the order flow, without staff being forced into idle positions, and, in larger footprints, equipment could be moved into the back rooms, allowing mobile orders to be prepared behind the scenes in what have become known as ghost kitchens. These analytics also improved supply chain replenishment at the store level, ensuring that the individual café not only anticipated and prepared for the needs of the individual customer, but also had the inventory to keep up with demand.

Starbucks' 12‐year digital transformation journey produced far more than just improvements to experience, a few of which were touched on lightly earlier. They improved employee productivity through automation of everything from scheduling to inventory management to product monitoring, and they increased throughput per store – total volume of orders processed over time – through automation. This, of course, led to a straight‐line increase in both revenue and margin. They leveraged analytics, customer insights, and an agile testing philosophy to introduce new flavors (Pumpkin Spice Latte, anyone?), create seasonal and occasion‐based offerings, and drive even greater engagement through digital marketing techniques. They've employed many of the other techniques outlined in this book and continue to follow this playbook to drive growth and retain their dominance in the market, even during the COVID shutdown period when their business model should have absolutely cratered. In all sincerity, this entire book could be based on the Starbucks story, as it is one of the best examples in the market of a traditional brand recognizing the importance of building a distinct experience, allowing the experience to define the brand. For purposes of this text, we will, for the most part, leave the Starbucks example here in this chapter, and highlight a few other brands that have followed an equally compelling path.

TURNING BRAND PROMISE INTO REALITY

Before we leave Starbucks, however, it's important that we reflect on what this means in today's post‐digital transformation era. What can be learned from the Starbucks' story that will improve your brand experience and your connection for the customer? There are three critical lessons to highlight, all reinforcing the importance of focus and dedication to the brand.

First, continuously validate your brand proposition and validate that your experiences, across every stage of the customer journey, reflect that proposition. Regardless of how strong the brand and experience strategy, and how clearly and frequently the team articulates that strategy, there's always a risk that the focus on that strategy is lower at the point of customer contact.

Fortunately, it's straightforward to manage and measure the digital experiences' adherence, both through direct review of each interface, through customer listening tools, and through experience analytics. This needs to be a continuous process, and this review should be coupled together with a continuous improvement process. The Starbucks story reflects the impact of this, as they continuously identified opportunities to refine and improve the digital experience to support their overall brand promise and experience strategy.

For those brands that have a physical experience, be that a retail store, restaurant, branch, or other models, it's equally critical to frequently visit those locations. While there, executives and brand leaders should observe, visit, and talk to customers and employees, identifying opportunities for improvement and for alignment. Open‐ended, high‐level questions often surface remarkable insights and ideas while also engaging both customers and employees at a deeper level. Starbucks does this as part of their standard process, which led Howard Schulz to discover in 2007 that the reconfiguration of the store and the push to make it more efficient and standard was disconnecting the Starbucks store from the Starbucks brand promise. Further, the team's observation of how customers were using the store, and how employees saw the customers using the store. That led to tweaks in the in‐store experience, and led to additions to the digital experience, to support that brand promise and keep Starbucks on their meteoric trajectory.

Second, don't assume that digital enablement will hide a poor experience. Focus on the brand‐experience alignment described earlier and recognize that digital platforms and technologies are an enabler. As we've discussed, digital is now invisible. For the most part, it's no longer distinctive and it's like air; we don't realize it's there unless it's not. The Starbucks customer is easily frustrated if digital capabilities don't work as they expect – if their order isn't placed right, if their payment doesn't process, or if the Wi‐Fi connection goes down – but these capabilities don't separate Starbucks from their competitors. It doesn't inspire lines that run 30 to 40 people deep at Denver International Airport. It's doesn't drive the full seating at the Starbucks in Christchurch, New Zealand, or on Kensington High Street in London.

Interestingly, if you comb their social media feeds, people don't rave about the taste of the coffee or the quality of the snacks, although both are, in my opinion, excellent. Instead, it's the perception of the in‐store experience, the perception of consistency, the sense of home; this is what has continued to make the Starbucks brand distinct and unique, and Starbucks' relentless dedication to that experience‐driven brand premise has allowed it to survive and thrive through two significant market events that would have destroyed many lesser brands.

Third, ensure your employees embrace your brand promise, as employees are the ultimate presentation of your experience. While I didn't highlight this at length in the earlier Starbucks story, it's been a cornerstone of the brand's success. Employees do not only smile and offer a friendly greeting when a customer enters the store, they try to recognize who they are and treat them as if they are a regular. This promotes the feeling that Starbucks is an integrated part of the community. Getting employees to the point where they wholly understand and reflect the brand takes focus and investment, beginning with an understanding of the brand experience strategy and then instilling the value of that strategy. Employees need to feel that they are part of something bigger, they need to feel that they are making a positive difference, and they need to be rewarded for exceptional performance. Starbucks does all three, and the result is a continuously positive in‐store environment that connects employees with customers and with the brand, and drives deeper loyalty as a result.