Another Interesting Comment From Bob Lefsetz
Posted: Thu Jan 31, 2008 9:10 amIs Starbucks a band?
Is it something that you discover and revel in, tell all your friends about and
then abandon when the hoi polloi partake?
All I hear about Starbucks is the coffee tastes burnt.
And if you dig a bit deeper, everybody who testified about the vibe now tells a
different story. How instead of being a hangout for the hip, it's the last stop
for the unemployed, the losers.
How did a high-flyer fall so quickly?
Via overexpansion, via relentless search for the dollar, via straying from its
core product, coffee.
In case you think Starbucks is a music company and are not following the stock
market, you may be unaware that the coffee company's stock tanked by 42% last
year. And now instead of dabbling in Hollywood, Howard Schultz has retaken the
reins. Instead of expanding in the U.S., stores are closing. You see the
company took its eye off the ball. It lost track of its core values. Even
forgot what it was selling, a hand-built drink that the public was willing to pay a hefty premium for.
People aren't going to overpay forever, especially if they don't think they're
getting value. Kind of like the concert business, if you think about it. The
hoi polloi are going to see the Stones at exorbitant prices, but the hard core
has tuned out. And now every gig doesn't sell out. You see the show isn't
cool, it's tired. It's only about the money. It's creepy.
Starbucks isn't creepy yet... Then again, maybe it is.
Was the turning point "Best In Show", when the yuppie couple talked about eyeing
each other from Starbucks stores on opposite sides of the street? That was the
cultural high point. From there, it was downhill.
If I were to give advice to Howard Schultz, I'd say IT'S THE COFFEE, STUPID!
People don't go to Starbucks to buy music. That's an afterthought.
A band needs to focus on the music. That's why people are fans. Not because of
the cool merch, not because of the fare at the gig. The more you try to nickel
and dime the fan, the more you turn him off. Fan clubs? Glorified ticket fees. Fan clubs have a
deservedly negative rep. Maybe if you're at the top of the pyramid, you can get
away with it. Otherwise, the fan club has got to offer more than a few pictures
and a message board. You've got to make people feel like they're getting a
deal! Being allowed to buy tickets in the upper deck is not a deal.
As for expansion... It's your core audience that keeps you in business year
after year. The more you try to reach the casual buyer, the more you alienate
your core, you shorten your career. Leave that money on the table now, so you
can reap even greater rewards down the line.
The label will tell you to take every opportunity. Do every TV show, be in
commercials. But at what cost? Pearl Jam has it right here. They don't give a
shit about the casual fan. They're only playing to the core, and doing quite
nicely. An arena only holds 18,000 people. You don't need everybody in a city
to come and fill it, only a small fraction of the populace. And by charging a reasonable ticket price, people
will continue to come back.
That's another challenge Starbucks is facing. Pricing. Dunkin' Donuts and
McDonalds are selling coffee cheaper. Is it as good? You decide. But only the
ultra-dedicated are not price sensitive. And Starbucks has abandoned this hard
core. Casual drinkers could go somewhere else quickly. Especially after they
realize the beautiful people have moved on.
A Starbucks featured handmade espresso. People loved the handmade records, with
the mistakes, with the vibe. Once we auto-tuned everything, once we made it
perfect, once the machines took over, public interest waned. And why go to the
show? It's not going to be real. These acts lip-synch not only on television,
but at the gig! A show is an extravaganza as opposed to something that touches
your heart.
Starbucks is still making money.
Maybe your act is still on the road.
But if you want your act to continue to be on the road, focus on your customers, focus on your fans. Give them tons of info on
your Website. In order to insure they come back. Give away free tracks. Maybe
live shows. A dedicated fan doesn't care if there are mistakes, he doesn't need
perfection, he just needs that hit, to feel close. And instead of pursuing an
acting career, instead of spending time diversifying, creating new avenues of
wealth, just write and play more high quality music. THIS is why people are
dedicated to you. This will keep them dedicated. Falter here, and you're
fucked.
http://www.nytimes.com/2008/01/30/busin ... ss&oref=sl
ogin
Is it something that you discover and revel in, tell all your friends about and
then abandon when the hoi polloi partake?
All I hear about Starbucks is the coffee tastes burnt.
And if you dig a bit deeper, everybody who testified about the vibe now tells a
different story. How instead of being a hangout for the hip, it's the last stop
for the unemployed, the losers.
How did a high-flyer fall so quickly?
Via overexpansion, via relentless search for the dollar, via straying from its
core product, coffee.
In case you think Starbucks is a music company and are not following the stock
market, you may be unaware that the coffee company's stock tanked by 42% last
year. And now instead of dabbling in Hollywood, Howard Schultz has retaken the
reins. Instead of expanding in the U.S., stores are closing. You see the
company took its eye off the ball. It lost track of its core values. Even
forgot what it was selling, a hand-built drink that the public was willing to pay a hefty premium for.
People aren't going to overpay forever, especially if they don't think they're
getting value. Kind of like the concert business, if you think about it. The
hoi polloi are going to see the Stones at exorbitant prices, but the hard core
has tuned out. And now every gig doesn't sell out. You see the show isn't
cool, it's tired. It's only about the money. It's creepy.
Starbucks isn't creepy yet... Then again, maybe it is.
Was the turning point "Best In Show", when the yuppie couple talked about eyeing
each other from Starbucks stores on opposite sides of the street? That was the
cultural high point. From there, it was downhill.
If I were to give advice to Howard Schultz, I'd say IT'S THE COFFEE, STUPID!
People don't go to Starbucks to buy music. That's an afterthought.
A band needs to focus on the music. That's why people are fans. Not because of
the cool merch, not because of the fare at the gig. The more you try to nickel
and dime the fan, the more you turn him off. Fan clubs? Glorified ticket fees. Fan clubs have a
deservedly negative rep. Maybe if you're at the top of the pyramid, you can get
away with it. Otherwise, the fan club has got to offer more than a few pictures
and a message board. You've got to make people feel like they're getting a
deal! Being allowed to buy tickets in the upper deck is not a deal.
As for expansion... It's your core audience that keeps you in business year
after year. The more you try to reach the casual buyer, the more you alienate
your core, you shorten your career. Leave that money on the table now, so you
can reap even greater rewards down the line.
The label will tell you to take every opportunity. Do every TV show, be in
commercials. But at what cost? Pearl Jam has it right here. They don't give a
shit about the casual fan. They're only playing to the core, and doing quite
nicely. An arena only holds 18,000 people. You don't need everybody in a city
to come and fill it, only a small fraction of the populace. And by charging a reasonable ticket price, people
will continue to come back.
That's another challenge Starbucks is facing. Pricing. Dunkin' Donuts and
McDonalds are selling coffee cheaper. Is it as good? You decide. But only the
ultra-dedicated are not price sensitive. And Starbucks has abandoned this hard
core. Casual drinkers could go somewhere else quickly. Especially after they
realize the beautiful people have moved on.
A Starbucks featured handmade espresso. People loved the handmade records, with
the mistakes, with the vibe. Once we auto-tuned everything, once we made it
perfect, once the machines took over, public interest waned. And why go to the
show? It's not going to be real. These acts lip-synch not only on television,
but at the gig! A show is an extravaganza as opposed to something that touches
your heart.
Starbucks is still making money.
Maybe your act is still on the road.
But if you want your act to continue to be on the road, focus on your customers, focus on your fans. Give them tons of info on
your Website. In order to insure they come back. Give away free tracks. Maybe
live shows. A dedicated fan doesn't care if there are mistakes, he doesn't need
perfection, he just needs that hit, to feel close. And instead of pursuing an
acting career, instead of spending time diversifying, creating new avenues of
wealth, just write and play more high quality music. THIS is why people are
dedicated to you. This will keep them dedicated. Falter here, and you're
fucked.
http://www.nytimes.com/2008/01/30/busin ... ss&oref=sl
ogin
...but back to the focus of the tread....interesting how he related a business like Starbucks as an example for how the music business also over saturates and dilutes their product ...and when they try to cater to whats trendy and the casual instead of sticking with what made them successful in the first place and giving that to their loyal customers to maintain them.. A smaller business may not make as much, but one that stays true to their formula of success with loyal patrons...they will have longevity and make enough...it's when those businesses try to get bigger sometimes , by altering their formula, ... too many changes...not catering to their loyal customers...getting too greedy and going for more money and in the process losing quality in service and product. A business doesn't have to be the biggest, best or most flashy..to go too far overboard and do things too much past what keeps them in business..and then have to charge far more then their competitors.....for a long run a business requires, honesty..integrity,.dependability..a good quality product at a reasonable price to maintain loyal customers. At least that's some of what I got out of what he posted