How will Starbucks closures impact shared-space bank branches?

It seemed like a no-brainer for some institutions’ expansion strategies: build branches near or adjacent to a Starbucks store; or better yet, take full advantage of the foot traffic generated by the coffee chain and share a retail space. Given the rapid growth and much-discussed success of Starbucks in recent years, it certainly seemed like a viable strategy.

But as news comes today of Starbucks’ plans to close more than 600 stores over the next year, how will financial institutions sharing space with Starbucks stores be impacted?

While most of the planned Starbucks closures will be those stores opened since 2005, it doesn't sound like the institutions referenced in this Wall Street Journal article from 2005 will be impacted. But what about those institutions that may have followed their lead and teamed up with Starbucks with a shared-space since then? Or, what about those that were influenced in some respect by a Starbucks location when selecting a site for a new branch during the past few years? We've talked to quite a few institutions, especially those with branches near college campuses, who have aggressively pursued such partnerships with Starbucks.

It's easy to see how the shifts in traffic patterns can certainly benefit many businesses, especially those that follow retail magnets like Starbucks or Wal-Mart, but what happens when they close their doors? I suppose we’ll find out which institutions, if any, will be impacted when Starbucks makes its announcement to its employees later this month about which locations will be closed.

Have an idea for us?

After reading about the latest Starbucks training sessions where each of its stores were closed for a three hour training session a few weeks back, and hearing about some of the initiatives it will be launching to get back in touch with its customers, I've been looking for examples of these initiatives coming to life in my trips since to Starbucks stores.

The one idea I particularly like, called My Starbucks Idea (Netbanker has a great write-up of how this can tie into banking) is a website that allows customers to submit ideas and feedback about all things Starbucks. And while the initiative is web-based, I was interested to see an in-store display this morning on the table with the coffee creamers.

The display is a small (8.5X11) table top with a stack of tear-off, business-card sized pieces of paper attached to it. These pieces of paper simply read "Have an idea for us?" - and, I have to admit, it intrigued me. I tore it off, and turned it over, the back simply directs you to mystarbucksidea.com.

It's not a survey. There are no questions. It simply directs you to submit your ideas to the bank's microsite.

I can definitely see the opportunity for financial institutions to offer this kind of feedback loop to their customers - and could easily be placed at teller stations or on check-write tables. In Starbucks' case, because it's such a large company, having the comments directed to one central point is a great way to keep them organized.

It's such a simple way to keep the feedback loop open for customer dialogue.

Change the Story

My friends and co-workers all know that I usually begin each day with my favorite espresso drink from Starbucks. I am not just an unapologetic, loyal fan of their coffee and the studiously crafted customer experience that goes with it; I am generally an enthusiast for their approach to marketing. So I am usually on the lookout for references to the company in my favorite blogs. Last week, marketing guru Seth Godin mentioned them in passing while offering his thoughts on marketing in a recession. His blog post stated:

"Starbucks was the indulgence of a confident person happy to blow $4 on a cup of coffee. Starbucks can become the small indulgence for the person who just traded down to a small rented apartment. The challenge for marketers is to figure out how to change the story they are living so that their customers can change the story they tell themselves."

Starbucks can navigate a downturn in the economy because they have become part of their customer's daily life. They can remain relevant because of the adaptability of their "story." Seth's observation prompts me to think about the "story" being told by most financial institutions these days. Do their stories have the flexibility to adjust to the conditions of the marketplace? Do they even know what their "story" is or whether it is relevant to their customer? What do you think?

ABA Discussion Topic 4: Branding and ROI

Like Jeff, I am not surprised that the topic of branding and ROI was brought up at the branding roundtable discussion during this year’s ABA Bank Marketing Conference.

The context in which the topic was introduced to the group is one that I am sure many bank and credit union marketers are familiar with. It goes something like this: “Our brand could use some help – but can’t get budget approval without showing projected return on investment.”

Knowing that ROI will come up in a branding discussion, marketers should be prepared to steer the conversation - and use it as an opportunity to educate their colleagues about brand and the process of branding.

For some direction in reshaping the conversation, check out Ron Shevlin’s post.

I would also like to emphasize a point that Jeff made – your customers already have perceptions of your brand, and every experience they have with you contributes to those perceptions. Rather than allowing those experiences to happen by chance, well-branded companies take deliberate steps to craft and manage the experience their customers will have; this in turn allows an institution to have more control over the perceptions their customers have about their institution. And while some kind of ROI calculation would make many marketers' jobs much easier, it simply isn't going to happen.

Think of Starbucks. Its brand is reflected in everything from the “help us help the planet” message on their coffee cup sleeves to the iTunes free-song download card I received with my coffee this morning (even the song - A Fine Frenzy’s “You Picked Me” was carefully selected). Somewhere along the way, marketers at Starbucks made the choice to include these things as part of the customer experience. And, I would be willing to bet that the marketers didn’t calculate the ROI associated with these choices – and that the same holds true with many of their other choices made in supporting and enhancing their brand.

At the end of the day, your brand is who you are. You can either make the commitment and investment to create the experiences your customers have with you, or you can leave it all to chance. And, you can bet that today's strongest brands aren't leaving much to chance.