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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. I’ve seen places where you can get an oil change and a cappuccino at the same time. I hope they’re 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: It’s 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.”

Here’s the marketing lesson, a lesson which extends well beyond commercial products into the world of evangelical churches: Don’t 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 let’s 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 doesn’t matter whether you’re 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 there’s 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, “We’re different, and it will cost you. But it’s a price worth paying, because we’re not just like all the others.”

And that made all the difference. Maybe we should wake up and smell the coffee.