The
Value of Differentiation:
A Lesson from Starbucks
What do corn, pork bellies and American Evangelicalism have in common?
Think about that while we take a brief trip into the world of business
and product marketing.
By now everyone has heard of Starbucks Coffee. How can you miss it? As
ubiquitous as cumulus clouds, new Starbucks outlets seem to pop up every
afternoon on street corners, in bookstores and gas stations. Ive
seen places where you can get an oil change and a cappuccino at the same
time. I hope theyre paying attention to which brown liquid they
pour into the Styrofoam cups.
What causes so many people to spend so much money so frequently on a cup
of coffee? Answer: Its Starbucks.
That answer has more twizzling around it, though, than mere taste. The
name Starbucks is now associated with a psychological experience,
not just an aromatic one: smooth slowness sipping a good book, sweet sounds
of people enjoying their day, global tastes evoking warmth and wealth.
All this from just one Caramel Macchiato Grande?
Yes. Marketing experts understand this phenomenon as the result of brand
strength achieved, in part, through differentiation.
In his book A New Brand World, Scott Bedbury says that during his three
years with Starbucks, as it grew to over 5,000 stores, his original $5
million marketing budget never increased much, and Starbucks never
bought network broadcast or national print advertising.
So how did they achieve such amazing growth without pumping big bucks
into advertising and brand awareness? According to Bedbury: Starbucks
was blessed by the fact that the rest of the coffee world was still fast
asleep at the switch, pumping out undifferentiated products for the grocery
channel, manufactured to the lowest price. For decades, industry innovation
had been leveraged to get costs down rather than quality up
in
the fifty-year race to see who could make the cheapest three-pound can
of coffee.
His strategy was to re-invent a nine-hundred-year-old product
so that, even though Starbucks was not more convenient, or quicker, or
cheaper than the rest, people would crave it for its quality and appeal.
Rather than spending money on expensive media campaigns, Starbucks
served up a steady stream of handcrafted, customized products
following
our Golden Rule: brewing unto others as we would have them brew unto us.
Heres the marketing lesson, a lesson which extends well beyond commercial
products into the world of evangelical churches: Dont fail to pursue
product differentiation. By definition, when the only thing that differentiates
one product from another is price, you are in a commodity market. Corn,
hogs, gold, silver. People care only about getting as much as they can
for the lowest possible price. Bedbury warns, Perceptions of product
parity are the death of the brand in any business.
Now lets turn back to my original question. Over the past few decades
the American evangelical church has spurned differentiation as divisive
and shaped a culture in which the average Christian is likely to believe,
It doesnt matter whether youre Baptist or Methodist,
all that matters is that you believe in Jesus Christ. We should emphasize
how we are similar rather than different.
Sounds good on the surface, until you place it up against the world of
market branding. When all coffee is essentially the same, or corn is just
corn, and pork bellies are just pork bellies, or Evangelicals are just
Evangelicals, what moves people to choose one brand over the other is
price in relation to quantity. We get more for our money at XYZ
Church, so our family goes there.
Today, Evangelicalism is characterized by undifferentiated brands offering
big amounts of service for the least amount of personal sacrifice
and lifestyle adjustment. Like coffee, if theres no difference in
quality, then the bigger the can and the lower the price the better.
The results have been devastating to the holiness of the evangelical church
in America. Statistics galore demonstrate that simultaneous with the lack
of differentiation among churches has come a lack of differentiation between
the behavior of Christians and the behavior of an unbelieving world.
We should learn a lesson from Starbucks. They believed that people will
make significant personal and monetary commitments to experience differentiated
quality. They decided not to remain in the commodity market anymore. They
dared to say, Were different, and it will cost you. But its
a price worth paying, because were not just like all the others.
And that made all the difference. Maybe we should wake up and smell the
coffee.
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