Live By The Blender. Die By the Blender.
A recent post by John Moore over at Brand Autopsy re the latest Starbucks Gossip reminded me of my high school job at Dairy Queen, madly making malts and cones with curls.
Seems that one real-world reason for the smaller than expected revenue growth is the popularity of the labor-intensive Frappuccinos. Net-net, you can only get so many people and blenders behind a counter before people go crashing into each other, the blender whirring becomes noise pollution, and both service and ambiance suffers. No matter how well-intentioned or well-trained the staff, there are real-world limits. (1)
When I worked at the DQ, it was a popular stop for families coming back from the lake as well as seemingly endless busloads of Little Leaguers. We’d sometimes have forty people at the counter, many wanting burgers their way, in addition to malts, banana splits, hot fudge sundaes, and cones, cones, and more cones - all at the same time. We’d start out being very polite, orderly, upselling and cleaning as we went. By the end of the day, our feet were sticking to the floor, our fingers were stuck to each other and we girls had likely run into each other multiple times (and that curl maneuver had long gone - you try peeling bananas, flipping burgers, running a malt machine, and dealing with 40 kids all screamin’ for ice cream.) Forget image, upselling or service - we were just trying to survive by mid-afternoon. (All this for $1.10 an hour, which even in 1975 wasn’t great money.) And so it must be with Starbucks employees.
The Bottom Line: EVERYTHING is a marketing problem and eventually drops to your bottom line. Blenders, counter space, employee exhaustion - all factors that have much greater impact on sales than any ad campaign ever could. So, it really can come down to something as “simple” as too many (or too few) blenders.
Read More: Starbucks execs baffled by Wall Street’s response to earnings report. …Its trouble with the labor-intensive Frappuccinos has stoked investor concerns that Starbucks has complicated its menu to the point that the stores suffer. Starbucks has been adding lunch items and hot breakfast sandwiches in some stores and pushing CDs and books…
Frappuccino Flap (from Money.com)
(1) This is why bartenders in “bar bars” hate orders for frozen “frou-frou” drinks. (I used to bartend too). You typically only have one blender and it really cuts into production, which reduces tips. Plus, people that order frozen drinks tend to - as a rule - be more picky about them (”There are chunks in the bottom! Take it back and do it right!”)
Related Posts:
Has Starbucks Jumped the Shark?
Marketing, Family Feud Style
Want to talk more about marketing issues & opportunities? (Or, what’s really in that soft-serv ice cream mix?) Email me!
View the Blog Roll
August 12th, 2006 at 7:09 am
I hear you Mary. If they spent more time doing the analysis on the service delivery as a key factor in the profitability, then there would not be surprises that they can’t make enough. Accept that there are real world limitation (i.e. the stores were built with so much space, blenders, etc.). Now within those constraints, how can you maximize the revenue? It still requires customer desires but should not expand the menu beyond what can be delivered. It is hard work and not a quick fix and thereby the issue. Not everyone wants to spend the time to do the analysis up front.
Enjoy your weekend!
August 16th, 2006 at 3:27 pm
Mary, I was catching up on your posts and couldn’t resist throwing my two cents in on this one. I think this “excuse” is bunk. They’ve had frappuccinos for years, and I can’t fathom that they’ve exploded in popularity that much over one summer. My guess is that they are getting a bit of pricing pressure where folks are choosing to not get $4 lattes (or maybe at least cutting back on one or two a week) due to pocketbook pinches elsewhere (i.e gasoline). That’s a longer term problem that would have hit the stock a lot harder than a “short term” issue like frappuccinos. Just a guess. But that’s the fun of this! Thanks Mary.
August 17th, 2006 at 7:10 am
Hmmm….good point. The perspective about blenders came in part from a store manager. And, this brings me to one of my pet analogies. In talking to field employees, you’ve got to temper the data with other information. To a solider in the trenches facing tanks - the whole war is about tanks. And, in fact, winning the war may well depend on artillery or air cover…or a completely different battle. None of which helps the poor solider facing that particular tank.