Starbucks’ private domain operation method!

Starbucks China has more than 5,000 stores and more than 70,000 baristas.

The latest financial report data for the first quarter of fiscal year 2022 shows that 75% of Starbucks’ sales in the Chinese market are contributed by members, and the number of active members of Starbucks Rewards Club within 90 days is approximately 18 million.

When it comes to private domain, what matters is organizational strength.

Especially for large offline chain retail formats, how to coordinate the relationship between the headquarters and regions, regions and stores, and stores and partners, so that the brand tone and headquarters strategy are not deviated during the implementation of the project, is a critical pain point.

Starbucks does a great job in this regard. The responsibilities of the headquarters, stores and partners are clearly defined and the brand tone is consistent.

This article deeply analyzes Starbucks' private domain system, from the aspects of collaboration between headquarters and partners, warm service, brand IP, membership system, etc.

1. Collaboration between headquarters partners to return to warm service

I have always believed that the layout of private domains should be adapted to local conditions.

Building a private domain system based on brand strategy, tone, products, organization, and operations does not have a one-size-fits-all approach.

First, let’s look at Starbucks’ brand strategy, tone, and user base.

Starbucks’ success does not lie in the coffee itself, but in the creation of the concept of the “third space”. It has transformed itself from a coffee shop that simply sells products to a cultural symbol that sells lifestyles, creating its own community culture.

The family is the first space, the workplace is the second space, and public spaces such as bars, coffee shops, museums, libraries, parks, etc. in the city are the third space.

Every detail of Starbucks store design, layout, and decoration has been fully considered, including the rich coffee aroma, soothing music, soft lighting, and comfortable sofas.

When people buy Starbucks, they are paying more for the space and environment, a place where they can relax, rest, negotiate and communicate.

Starbucks targets the following user groups: white-collar workers with a certain level of education, social status and economic foundation who are petty bourgeois. They are less sensitive to price and pay more attention to service, concept, quality and tone.

Based on its brand positioning and tone, Starbucks' private domain system is more "Buddhist" than McDonald's, which is also a large chain. I summarize it as warm but non-intrusive.

When it comes to attracting new customers, no KPIs are set for front-line employees, no tough actions are taken, and the store does not reveal too much information. It simply places a membership card next to the cash register.

Based on communities (stores), we create the concept of regular customer groups to attract interested and loyal users to join the groups.

In terms of operation, let real people form online communities. Through communication, connections and interactions between people, relationships are created and warmth is felt.

For brands with a small user base, the headquarters can directly interact with users in the group. But for a company like Starbucks, which has tens of millions of users, it is definitely unrealistic for the headquarters to operate and execute interactions within the corporate WeChat groups. If the groups are created by store partners, the headquarters' control will be weakened, so there is a need to make a functional distinction.

The headquarters performs unified standard actions at the headquarters level, and store partners provide non-standard temperature services at the store level.

Headquarters, build a group based on brand IP. Within the corporate WeChat group, facing users, we implement unified standards and creative work at the headquarters level - brand activities, brand stories, fan benefits, and content seeding; within the organization, facing employees, we can supervise the service quality and response time of front-line stores and partners.

Store partners only need to do one thing in the corporate WeChat group. At the store level, we provide non-standard and warm services - emotional interaction between users, problem solving, activity links, and inventory sales.

2. From the perspective of the barista/store, warm and non-intrusive service

Through private domains, brands can directly face users, convey brand values, and provide services that traditional channels cannot provide. Develop users to become brand KOCs and super spreaders.

In every Starbucks store, there are about 10 baristas online to provide warm service to regular customers. From problem solving, emotional interaction, store activities, offline invitations to becoming friends.

"Community" broadly refers to a group organization. Enterprise WeChat is just the carrier of this "community".

If you want the "community" to have lasting vitality, it is far from enough to rely solely on the brand's one-way output in online corporate WeChat groups. It must be decentralized, with members of the community building a social network. The brand only exists as one of the nodes, and its main purpose is to connect users with each other.

The fastest way to develop "community" relationships is to meet offline and do something meaningful and with the same goal together.

Starbucks' "community" brings together a group of users with common hobbies, common needs, and common emotions.

They get to know each other and become familiar with each other through Starbucks, so they will naturally develop a sense of belonging and stickiness to the Starbucks brand.

So, how does Starbucks do it?

Starbucks’ corporate WeChat groups are established based on stores, and all stores are located near residential areas and office buildings. The geographical locations of users in the enterprise WeChat group are relatively consistent, all within 3km of the store.

Based on the "third space" store atmosphere of Starbucks, baristas can invite users to offline coffee tasting sessions and xxx meetings in the company WeChat group to enhance the connection between users and users, and users and baristas.

In their spare time at work, baristas will communicate, interact and play with everyone in the group as friends or close friends, and even play multiple roles with each other.

For example: xxx store mascot, xxx store sign-in king.

When members of the "group" get to know each other offline at Starbucks, establish connections, and have common needs, other life scenarios will naturally arise.

For example, during the Shanghai epidemic, everyone asked about the epidemic, group purchasing, delivery and other matters in the group and helped each other.

For example, if you see a lost dog, you can post a lost and found notice in the group; discuss work, moving, etc.

In the process of store operation, special situations are often encountered.

For example, the front door glass was broken; the epidemic prevention and control side door was not open; the coffee ingredients were gone; the door was opened late...

Or maybe the cups are arriving, new products are being released, or the products are being cleared out of stock...

This information is important, but the headquarters operations cannot know or master it. At this time, the store’s barista needs to remind and inform users in the group.

As a user, you can ask questions about orders and stores in the group, and the barista will resolve them as soon as possible.

Warm service is not only reflected in store partners; the brand IP operated by the headquarters gives users warmth and emotion from a brand perspective.

3. Brand IP/headquarters perspective, warm and non-intrusive service

In the private domain, based on the characteristic of zero distance from users, enterprises can transform cold, invisible and intangible brands into warm and emotional IPs.

Through interaction with users, convey brand positioning, tone, style and values.

When IP is transformed into a "person" and uses "people" to approach users and serve users, it is easier to be accepted and more likely to generate favor.

The image design of a brand IP is generally a virtual image.

The multi-dimensional touchpoints, promotional materials, and product packaging between users and companies online and offline can all be combined with the brand IP image. As soon as users see this IP image, they will think of the concept behind the brand.

For example, Starbucks’ “Bear Manager”.

Operated by the headquarters, from a brand perspective, it implements unified standards and creative work at the headquarters level across the country, giving users warmth and emotion.

For example, brand activities, brand stories, fan benefits, content promotion, emotional care, coffee teaching, and peripheral product derivatives.

In the company WeChat group, as a living "person", speaking "human language", communicate, interact and interact with users.

When new users join the group, the "Bear Store Manager" performs a welcome ceremony; during the peak coffee consumption period every day, fan benefits are distributed through scene-based promotion (free shipping coupons, 6 yuan off for purchases over 50 yuan) to increase the average order value and promote consumption.

Warm service has always been what Starbucks advocates, and I believe it is the core competitiveness in the private domain.

SOP can improve operational efficiency, but there must be a little more humanity on top of the standardized process.

This is difficult to achieve. It requires sufficient brand awareness and sufficient manpower to execute it. Moreover, the people who execute it must have keen insight and be able to treat every user from the user's perspective.

When a city closes a large number of stores due to the epidemic, Manager Xiong will specially create encouraging and hopeful materials with local characteristics to provide care within the group.

For example, during the Shanghai epidemic, Starbucks made "Come on, Ala Yidai"; "Let's Cut Coffee Together When the Lockdown Is Unblocked"; "Let's Wait Together for Spring to Come"...

At the same time, we also offer coffee classes to teach everyone how to make coffee at home.

For some stores with transportation capacity, Manager Xiong has also opened group purchasing channels.

If an IP wants to be full and three-dimensional, it must have a rich storyline.

Starbucks has created a complete character story for "Manager Bear". He will often appear in front of users as the protagonist of the story in conjunction with marketing activities, play with users, and narrow the distance between the brand and users.

A successful IP also needs to extend to a series of peripheral products that accompany users in physical form.

Manager Bear’s IP peripheral products include ornaments, dolls, medals, etc.

Only give away, not sell, strictly control output to create scarcity. Users must consume and collect stars within a specified time to obtain them, which increases their sense of belonging to the store manager and the brand.

4. Membership system to create a unique sense of honor

The establishment of a membership system can help brands screen users who recognize the brand, recognize its value and are highly loyal.

The brand will focus its limited resources on these users to maximize resource utilization efficiency.

By motivating members through rights and interests and creating a sense of honor, we can attract ordinary users to become core members and promote consumption; at the same time, we can enhance the stickiness and loyalty of core members to the brand.

Starbucks' membership system is divided into three levels, with consumption and star collection as the main line of growth.

By distinguishing the amount of consumption, we can determine whether the user is a loyal user of the brand, and decide to invest corresponding resources and match the corresponding rights and interests.

Starbucks has 3 levels of membership:

1) Silver Star

Silver Star is the lowest level in the system and is also the default level. No rights or interests whatsoever. By differentiating rights and interests, users can be promoted to the next level as quickly as possible.

2) Jade Star

I believe that only when you reach the Jade Star level can you be considered an official Starbucks member.

There are two types of conditions for promotion to the Jade Star level: users must spend 4 stars from the Silver Star level (50 yuan per star) or spend money to purchase a Star Rewards Card.

When users are at the Silver level, Starbucks partners will recommend the Starbucks Rewards Card to help them get promoted quickly.

The threshold for the Star Rewards Card is 98 yuan. By paying, it avoids the freeloaders and screens out users who recognize the brand value.

The benefits are mainly aimed at bringing in new customers, stimulating related consumption and promoting repeat purchases.

2 half-price coupons for designated beverages to increase the value of Starbucks Rewards card benefits and promote repeat purchases.

Buy one get one free coupons*2 for designated drinks to help old customers bring in new customers and promote multi-person consumption.

A 10 yuan discount coupon for purchases over 60 yuan on designated drinks and food will increase the average customer spending.

A 30-yuan coupon for designated products will be provided to promote related consumption of other products such as cups and coffee beans.

In addition, after purchasing the Star Rewards Card, users can be directly upgraded to the Jade Star level and receive a promotion reward - a free drink coupon.

From the user's perspective, it costs 40 yuan to buy a cup of coffee by yourself, but after spending 98 yuan to buy a Star Rewards Card, not only can you have a free cup, but you can also enjoy a series of preferential benefits, which is very cost-effective. You can also directly become a Jade Star level and enjoy Jade Star level rights and benefits.

It takes 16 stars to go from Jade Star to Gold Star. If you reach 8 stars in your first consumption, you will receive a free cup, which is used to divide the goals into stages.

The user first sets 8 stars as his goal. After reaching 8 stars and enjoying a free drink, he will set 8 stars as his goal again and reach the highest level - gold star, to enjoy higher benefits.

Step by step, like a slide, let users consume naturally and sprint to a higher level.

3) Gold Star

Gold Star is the highest level of Starbucks membership.

When users reach the gold star level, they can enjoy Starbucks' ultimate rights and services. Different from ordinary users, it increases the user's sense of exclusivity.

Equity is divided into 4 categories:

1: When you are promoted, you will receive a free drink coupon.

2: On your birthday, you will receive a birthday drink coupon.

3: If you spend 16 stars or more, you can get an anniversary drink coupon next year.

4: Stars can be exchanged for benefits, and through rebates, consumption is stimulated: 1 star (50 yuan) can enjoy a 3 yuan customization (upgrading the cup, adding espresso, syrup, etc.); 9 stars (450 yuan) can get a medium cup of coffee and equivalent...

Gold Star level users are super users of the brand. In addition to regular rights and interests, Starbucks will also hold exclusive events from time to time and invite participants.

For example, the annual Starlight Membership Festival.

I think Starbucks private domain is very successful.

His success does not lie in the SOP and refinement that we understand in common operations.

Instead, every organizational level, from the headquarters to the front-line baristas, should be able to maintain the brand tone and values.

Starting from the user's perspective, standing in the user's shoes, people-oriented, warm, and non-intrusive service to users.