Starbucks, Walgreens, and the Difference Between Community and Corporate PR — Updated
[Update Note: In the original published post, I wrote that Walgreens employees are instructed to tell customers “Live well!” This was in error; the phrase is in fact “Be well!.” I have updated the post accordingly. Thanks to reader (and Walgreens employee) Jon K. for correcting me on this. -tk]
Last week I was asked to travel south and deliver the keynote address to a group of lovely professionals from around the region. Their industry is in the midst of changes so dramatically seismic that no one is quite sure exactly what it will even look like two years from now.
I don’t normally allow my writing world and my corporate consulting/speaking/training world to collide, but I’m going to make an exception after reading James’s post on employee vs. employer power as well as some of the threads in my own post on why AT&T is just awful. Specifically, I want to discuss one small point I made in my talk. It’s tangentially related to both of those topics, but be warned: this is absolutely a business and corporate-culture related post. Those wanting straight politics should turn back now…
As I write this, I’m sitting in my neighborhood Starbucks. Starbucks is one of those corporations that manages to flourish almost everywhere despite the fact that liberals and conservatives alike seem to despise it (though, obviously, for different reasons). Down the road about a mile and a quarter from where I sit is the nearest Walgreens drug store.
In many ways, these two corporations are quite similar: Both are inarguably behemoths in their industry. Both do quite well for investors. Both are seemingly ubiquitous; you can’t swing a cat in almost any neighborhood without finding it’s developed a caffeine buzz and inexplicably picked up a package of latex condoms, “just in case.” From a bird’s-eye, corporate-report viewpoint, they’re actually pretty interchangeable.
Here’s a true story: Last week my wife and I went shopping for tomato plant containers for our front yard. On the way to Lowe’s, we decided to get coffee. Despite there being plenty of places along our route we could have gotten a cup (three McDonalds and a Dunkin Donuts were obvious potential choices, but there were a whole lot more) we actually went out of our way to find a Google-mapped Starbucks. When we got there, it turned out that it was one of those Starbucks kiosks that’s in the middle of a grocery store, so we decided to skip coffee for the moment and get it later on our way home.
This begs a few questions, the first of which is why didn’t I just get coffee at a McDonalds drive-thru? The immediate answer expected is, “Well, I like Starbucks coffee better.” Which begs the question, so why didn’t I go in the Safeway and get some there? It’s the same damn coffee at the same damn price, and you can’t get “more convenient” than the place where you’re already in the damn parking lot.
And that’s when everything becomes tricky. Because here’s the thing: Starbucks isn’t the best tasting coffee in town, and it certainly isn’t the cheapest. And though we think of them as being “everywhere,” there are two other places that serve coffee I could be writing from right now that are closer to my house then where I am. So why Starbucks?
Part of the answer is that I am clearly a moron. But even so, I am far from alone. When I go speak at conferences, I notice that when attendees awake in our hotel in the morning the first thing they do is get dressed and walk to the nearest Starbucks — even when the hotel has free Starbucks in the lobby for its guests. Starbucks has a brand loyalty that is similar to Apple’s, in that it can only be described as “tribal.” And the very clear reason can be boiled down to one word:
Everything Starbucks does is reflective of the concept of community. And even using the word “reflective” is understating, because the company embraces it with a zeal normally found under Baptist revival tents. I’ve never been in a Starbucks where the people who work and shop there didn’t stop to have conversations with me about whatever. As a comparison point, I’ve never been to a McDonalds where anyone’s ever talked to me about anything at all, other than to ask if I “want fries with that.” I might work from this table I’m sitting at now for the rest of the day, and no one will ever ask me if I’m going to buy anything. (I have yet to order my morning coffee.) No one goes to Starbucks for the coffee, which — let’s be honest — is passable at best. People go there because in a world where everyone is increasingly plugged-in and walled off, it offers a sense of connection to others.
And its concept of community isn’t just relegated to customer experience. We tend to forget this, but Starbucks is just a fast-food retailer. Despite that, they pay their workers more — far more — than any fast food server in your city. They pay benefits, including health, and they did so long before Obama decided to ruin America by making them do so. All employees are given stock in the company. As most people here know, earlier this month they announced a partnership with Arizona State University where they would pay for all employees’ on-line degree — which is far more subversive than it appears at first blush. (Once that 23-year old barista you love chatting up get’s her economics degree, what are the odds she’s going to want to keep working pulling knobs on an espresso machine?) They give a phenomenal amount of money away to local charities in whatever communities they set up shop. They’re on track now to donate over one million voluntary man-hours this year to community organizations throughout the US and Canada. They set up shops in low-income neighborhoods, and have 100% of those store’s profits go to local community development projects that are decided by those communities.
And before you write all of that off to being “just corporate marketing,” consider Walgreens.
Last year, Walgreens decided that it wanted to be the Starbucks of the drug-store world. They wanted to have people say, “sure, there’s a Rite-Aid a quarter mile away, but I’m going to drive a mile and a half so I can shop at Walgreens.” So they hired a top-notch group of marketers to transform their image. Now when you go into a Walgreens, you will be inundated with the message “Be Well!” Employees, be they managers, pharmacists or cashiers, have been instructed to end every costumer interaction by saying that same phrase to whomever they assist. Posters and signage pepper each store, each declaring how important being part of the community is to your good neighbors at Walgreens. And of course, all of this is backed up by a multi-medium, gazillion dollar on-going ad campaign.
The problem is despite how often the message is trumpeted no one really believes them. Nor should they.
Walgreens pays crap wages, and doesn’t bother to train their staff very well. The benefits they offer are almost an unintentional parody, like the one that states that Walgreen’s employees are allowed to buy Walgreens stock. So even though I know that every Walgreen employee is supposed to cheerfully tell me “Be Well!,” it’s not that surprising that I have never once heard any of them do so.
In fact, if there’s any single data point that best illustrates how little Walgreens actually believes in its new slogans, it’s from a poster at our local store that stakes its claims as a leader in “our community” by its commitment to the following:
- Big selections of the brand names you recognize!
- Everyday competitive pricing!
- Great customer service!
Yeah, because whenever I invite friends over for dinner the first thing they always want to know is whether or not I’ll be serving dishes made from ingredients from brand names they recognize. Is it any wonder, really, that while people will drive miles out of their way to get coffee at Starbucks, people won’t do an extra block to shop at a Walgreens rather than any of its competitors?
In the threads of my AT&T post, Brandon Berg pitched the much-believed statement that “good customer service doesn’t scale well.” And in his post on employee/employer power, James notes that turnover is quite high at the fast food establishments he frequents, and posits this is likely a sign of upward mobility. Each may be right, of course. But I’d like to toss out the possibility that each is seeing what they have, in effect, been trained to see.
It’s hard to think of a business that scales larger than Starbucks — hell, the ongoing joke is that you can see the next location from whatever location you happen to be sitting in. It isn’t just an industry leader; it has more locations than all the other major coffee chains combined. And its level of service and customer satisfaction is uniformly stellar by almost any metric. The difference between its level of service compared to other corporate behemoths isn’t related to size or industry. It’s just that they actually care about the quality of experience each person gets when interacting with them. There’s no reason McDonalds can’t do the same thing and continue to be profitable; there’s no reason AT&T and Comcast can’t either. For that matter, there’s also no reason that the DMV and the IRS can’t, except that in all of these other cultures those things just aren’t that important.
As to James’s theory, I certainly hope that he’s correct. I hope that the young woman who served him donuts is no longer there because she has moxie, and some employer with a higher pay scale liked the cut of her jib. But my experience tells me that when an employer pays low wages and has high turnover, the most likely explanation isn’t that the employer is acting as a training springboard for bigger and better things. More likely, it’s just that it’s a shitty place to work — even if the employees are nice to you when you’re there. But again, I’ve never bought donuts where James buys them so I really don’t know.
Liberals and conservatives each seem to have it in for Starbucks, which is a shame. Whether or not you want to be their customer, they seem to be counter-intuitive, living proof of both groups’ seemingly conflicting ideals: that you can create a positive corporate environment without government intervention, and that you can make sure that people earn a living wage with benefits that allow upward mobility and still be wildly successful.
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