Social Media Marketing: A Warning Sign of Starbucks Trouble?

The high-flying coffee chain Starbucks has taken quite a tumble in 2008, thanks to the declining economy and growing competition from fast food giant McDonald’s. Many saw the coffee king’s recent downfall coming, with social media marketing acting as a warning sign.

Prior to the 2007 holiday shopping season, Starbucks launched a podcast series and a “rumor response” page on its Website. The podcast was designed to further connect with customers and build a loyal audience.

The “rumor response” page included documents responding to rumors about the company that it considered serious enough to merit a public response. This was meant to help Starbucks build credibility and loyalty in its corporate-consumer relationship.

Unfortunately for Starbucks, pricey gourmet coffees were among the first things to be cut from squeezed personal holiday budgets. And one of the first indicators that there might be troubling brewing was the abandonment of social media marketing.

Throughout the 2007 holiday season, the same podcast episodes remained on the site, with no updates. The “rumor response” page also remained, untouched. It was a clear sign that Starbucks was falling out of touch with its customers.

With a CEO replacement, Starbucks has tried to reconnect with customers through the microsite. Through this new Web channel, customers can share, vote on and discuss ideas as well as see how Starbucks listened to its customer base and put these ideas into action.

While it may not save further store closures, this microsite does function as a way to show loyal Starbucks customers that the company is listening to their wants and needs.

The Starbucks story highlights an important aspect of social media marketing that companies can often forget in the rush to get “something” up. And that’s the simple fact that social media marketing is a way to connect with your customers.

If you’re providing customers with something that they don’t need—such as a podcast at a time when it is more important to open up a two-way conversation—your social media marketing may fail. You have to understand your customers’ needs and wants, and social media marketing presents a great outlet to gain that insight.

Don’t forget that engaging in any type of social marketing is commitment of both time and resources. One of the worst things a company can do is to fail to keep things up to date.

Letting your efforts die off is like abandoning a conversation with your customers. Be prepared to invest the resources that it takes to do the job right and make sure you have a plan to begin with.

Lisa Wehr ( is CEO/founder of digital marketing firm OneupWeb.

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