This is the final installment of my thoughts on the Starbucks experience and the issues that are leading to inconsistencies from store to store.
As I mentioned in my previous post, I believe the inconsistencies stem from licensing the brand and losing control of the experience as a result. What I need to do for you in this post is make some recommendations on how companies can close that gap between the corporate customer experience and the licensed store customer experience – for a more cohesive brand experience. What needs to happen between agreement signature and experience delivery?
Howard Schultz, Starbucks CEO, said: “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.”
Let’s figure out if that’s possible. I think the heart, soul, and conscience of Starbucks is (part of) what people love about the brand. How can that be copied by its licensees, since that seems to be where the issues lie.
What follows are my thoughts on how Starbucks and other (retail) licensors can protect their brands and the customer experience; remember, the experience is your brand. (These apply to franchisors, as well, although with their underlying operations support structure, franchisors should technically already be doing some of these things.)
1. Choose your partners wisely. I’ve written about this before; I think you have a responsibility to your customers to vet your partners (that includes licensees and franchisees) thoroughly. And that doesn’t just mean from a financially-sound perspective. On one hand, licensees and franchisees are looking for top, established brands from which they can make “easy money,” i.e., don’t have to invest sweat equity into years and years of building their own brands, but those top brands didn’t get where they are easily and need the licensees’ cooperation to keep the brand intact. On the other hand, licensors want to grow and spread their experience (remember, Starbucks said they “enter into licensing arrangements to provide the Starbucks Experience” in various locations) but need to do so wisely.
Choosing partners wisely means that you find someone who is proud to represent your brand and is willing to uphold the brand standards that you spell out for them. Partners must honor your commitments (service, product, and experience-wise) to your customers.
2. Create a formal Brand Steward position. Companies usually have this as an informal position, but in a licensing situation, I think it must be a more formal role. Maybe some organizations in licensor/franchisor business models have this type of a role already, but if they do, I don’t see it working. (Think governance similar to what you would have in a corporate Customer Experience organization, but it must spread to, and include representation from, the licensees). The position must be clearly defined and needs to ensure the next several recommendations are woven through the agreements and the organization as a whole.
3. Listen to customers. In licensor/franchisor models, I think listening to the voice of the customer is critically important, maybe even moreso than in a corporate model. Customers are your “in-house reporters” and can let you know what’s happening at store locations faster than you can visit all 15,000 of them.
4. Mystery shop your licensees’ locations. OK, like I said, you can’t visit 15,000 of them, but you can certainly visit some. And the ones you can’t visit, hire someone to shop for you. What are you seeing? What’s the experience like?
5. And listen to employees. First, learn about their experiences, but then also hear what they are observing about the customer experience. They are your best source of information; they hear it all. Unsure about whether you want to (or should) hear from your licensees’ employees? Check out the forums at ihatestarbucks.com to hear from both customers and employees. Know what employees of Starbucks that are located in Target stores call the brand? Tarbucks! Ugh.
Don’t think licensees or franchisees will agree to that?
6. Put requirements into your licensing agreements around VOC and VOE. After all, it’s your brand. You can protect it however you see fit. If the licensee doesn’t agree, then perhaps they’re not a partner for you.
Still not sure?
7. Add SLAs (service level agreements) to your licensing agreements. Each location must uphold a certain customer satisfaction score, NPS, employee satisfaction score, etc., and if a location doesn’t, it gets a warning and can potentially lose the license. Crazy? I don’t think so. Not if you want to protect your brand.
I think you need to set the same types of expectations with licensees about your brand as you would with franchisees or to your own corporate stores. While licensees don’t have the same marketing and systems support as franchisees, remember this: it’s your brand!
8. Ensure consistency across the organization in terms of tools for both customers and employees. Trenta cups and mobile payment readers, anyone? Sounds simple, right? Apparently not at Starbucks. If the licensee doesn’t want to order/use Trenta cups, then that’s not a licensee for you. Sounds ludicrous? Not if you care about your customers.
9. Ensure that you provide the right training to your licensees. What’s your brand promise? They need to know it. If your objective is to bring the Starbucks Experience to more locations, then train licensees on what that experience is/means. And, again, provide the tools to deliver on it.
10. Provide some hiring and culture guidelines to licensees. No, you can’t run their businesses, but you can protect your brand. And to do so, you can provide some guidelines to set up the licensee for success.
11. In the same vein, outline some employee onboarding procedures. That means, provide some training documents and messaging around the brand promise, what it means to be a part of the Starbucks family, what the Starbucks Experience is, etc. The framework for a great employee experience and, hence, a great customer experience begins with onboarding and training.
12. Ongoing communication between licensor and licensee is critical. License-and-go is not a good plan. License, observe, communicate, update, and engage is a much better approach.
Define what your brand stands for, its core values and tone of voice, and then communicate consistently in those terms. -Simon Mainwaring
13. Be true partners. I know, this one might be extreme, but when you’re working through product and service innovations or looking for new ideas, engage your partners/licensees. They are feet on the ground, as well, and can provide insights into customer needs and the overall experience.
14. Mutual trust is essential. When there is trust on both sides of the equation, i.e., the licensor trusts the licensee to act in the best interest of the brand and the licensee believes the licensor will act in the best interest of its partners, great things can happen.
Having said that, just remember two things:
- No one cares about your brand as much as you do. License agreements are flexible and can be molded to fit your brand’s needs. So choose partners wisely, and set both yourself and your partners up for (customer experience) success.
- Your customer doesn’t know the difference between corporate, licensed, or franchised stores. They know the brand. And they know what they expect of the brand.
Am I wrong here? What would you suggest for Starbucks? If you work for a company that operates on this licensed model, how are you ensuring that your customer experience is consistent across stores and that your brand is protected? How many of these items do you have in place across the entire organization (corporate and licensed)?
A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well. -Jeff Bezos
Image courtesy of Pixabay.
Annette I totally agree with all but one point…
"you can't visit 15,000 of them"
I'd argue that if you aren't prepared to visit them then you shouldn't licence them. It just shows a lack of care.
I think that is me firmly of the fence.
I would agree with James. If you aren't willing to make the commitment to visit everywhere your business or brand is (regardless of who it is operated by) what does that say about how committed you are to consistency of standards?
Awesome! I am totally agree with your informative post that provides branding solutions. Branding companies in singapore play a vital role in branding solution.
Thanks for sharing this valuable info
No, I think you both make a great point. You're either all in or you're out. If you can't monitor your brand, if you can't show that you care to every one of your licensees, then you don't care about your brand or your customers. It's not good enough. You do need to visit everywhere your brand is. Thanks for calling me on that!
Great points Annette! Sharing it in my networks!
Thanks so much, Annetta! I appreciate that.
Thanks for sharing huge important information dear. Cos’è il licensing di una marca & esquire licensing
This is amazing Annette! I love the fact that it is not "reactive" in the sense of wanting businesses to fall back on a more in-sourced model, in order to protect their brand.
Thank you. Great point.
Really gets into what brands need to know to managing your brand, name and reputation, and the brand experience with target audience! Wonderful detailed story!