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Strong Brands Always Have More Brand Credits Than Debits: A Starbucks Lesson

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The Starbucks Coffee marketing research department is kept busy providing oodles and oodles of insights into the Starbucks brand through yearly brand audits. And take it from this former long-time Starbucks marketer: The company learns a lot from these studies.

However, when it comes to measuring and managing the Starbucks brand on a daily basis, the Starbucks marketing department generally relies on a much simpler method—a brand checkbook.

Just as your personal checkbook has credits and debits, a brand checkbook has credits and debits in the form of brand credits and brand debits. "Brand credits" are business activities that enhance the reputation and perception people have of a brand, and "brand debits" are those that detract from the reputation and perception of the brand.

When faced with determining the appropriateness of marketing activities such as a promotion, sponsorship, program, or special event, the marketing department first determines whether the activity is a brand credit or debit.

To determine the positive impact (credit) or negative impact (debit) of a potential marketing activity, Starbucks marketers ask the following questions:

  • Does the marketing activity respect the intelligence of Starbucks customers?

  • Can Starbucks expertly deliver on all the promises made to customers in the proposed activity?

  • Will Starbucks employees be excited and motivated by the activity?

  • Will customers view the marketing activity as being clever, original, genuine, and authentic?


If the marketing department answered "yes" to three of these four questions, then the activity is considered a brand credit.

On the other hand, if Starbucks marketers answered "no" to more than one question, then the activity would be considered a brand debit. The Starbucks marketing department would then need to discuss the business importance of doing that brand debit activity.

An example of a brand-credit marketing activity is when Starbucks wrestled with the idea of running a sweepstakes promotion.

Before Starbucks ran its first-ever sweepstakes promotion in early 2003, the marketing department had to determine whether a sweepstakes promotion was a credit to the brand or a debit to the brand. This particular sweepstakes had Starbucks partnering with Vespa Scooters and offering Starbucks customers the opportunity to win a variety of prizes, from trips to Italy to snazzy Vespa scooters.

The Starbucks marketing department decided that this sweepstakes promotion was a brand credit because it was able to emphatically answer "yes" to three of the four brand checkbook questions.

As it related to respecting the intelligence of Starbucks customers, the marketing department believed that the Vespa sweepstakes did so because not only did it conjure up romantic images of Italy but also connected Starbucks back to its Italian coffeehouse cultural roots.

The Starbucks marketing department was confident of being able to deliver on all promises made to customers in the sweepstakes because a third-party contest administrator was running the contest and would be in charge of making sure all prizes were delivered to the winning customers and Starbucks complied with the requisite list of legalities.

Having kicked around the Vespa sweepstakes promotion idea with Starbucks store-level baristas and hearing their excitement for it, Starbucks marketers knew baristas would be jazzed by the promotion.

The one question Starbucks marketers could not emphatically answer "yes" to was whether Starbucks customers would view the marketing activity as being clever, original, genuine, and authentic.

But with three "yes" answers to only one "no," the Starbucks Vespa Sweepstakes ran, and by all accounts it was successful in driving sales as well as surprising and delighting customers with cool prizes.

An example of a marketing activity deemed a brand debit by Starbucks marketers concerns couponing.

Many restaurants and fast-food chains use coupons to drive sales and trial of new products. One common way these businesses coupon is by inserting coupons alongside offers from oil-change shops and dry cleaners in bulk mailings distributed by companies like Val-Pak. These bulk coupon mailings are an inexpensive way to reach a broad audience.

Starbucks uses couponing, but in a very judicious manner. It has always chosen not to use bulk coupon mailing services because the activity is viewed as being a brand debit more than a brand credit.

Starbucks marketers do not believe inserting a coupon into a bulk mailing envelope respects the intelligence of Starbucks customers. Nor would customers view this particular coupon activity as being clever, original, genuine, or authentic. Internal research has shown Starbucks marketers that its customers expect more originality and want Starbucks to treat them as individuals, and not collectively through mass-mailing coupon envelopes.

Furthermore, Starbucks marketers believe that store-level baristas would feel de-motivated if they worked for a company that had to resort to such a lowest-common-denominator marketing tactic to goose sales.

Now, just as it is unrealistic for your personal checkbook to have only credits and no debits, it's also unrealistic to expect that a business will participate only in brand-credit marketing activities. But it is vitally important for a healthy, growing business to have more brand credits than brand debits. Otherwise, your brand checkbook will be in a constant state of brand debt. Ultimately, given enough debits, a company will find itself facing "brand insolvency," which happens when a business continually promises more than it actually delivers, bankrupting the brand. Once this happens, it is extremely difficult to earn back brand credit... or customers.

Strong brands, like Starbucks, always manage their business to have more credits than debits in their brand checkbook and so never have to face the threat of brand insolvency.

So, how does your business determine which activities are considered "brand credits" and which are "brand debits"?

If you're not sure how you would determine brand credits and debits, consider what questions you would have to ask to create a credit/debit measurement tool. And, how your business might incorporate a brand checkbook to better measure and manage the marketing activities which impact your business on a daily basis.


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John Moore was formerly in marketing at Starbucks Coffee and Whole Foods Market; he now runs the Brand Autopsy Marketing Practice (www.brandautopsy.com) and is the author of TRIBAL KNOWLEDGE: Business Wisdom Brewed from the Grounds of Starbucks Corporate Culture (www.tribalknowledge.biz).

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