A Cup Of Coffee, With Social Media On The Side

As part of my look into Enterprise 2.0, this blog entry  will focus on social media and the legal risks and risk mitigation strategies a company uses to implement social media with there organization. After doing a fair bit of research, one brand that seems to have its thumb on implementing social media is Starbucks, ill go into these a little later but first a little bit about the worlds largest Coffee House.
Starbucks has a whopping 17,133 stores in 49 countries across the globe and as many of you are proberly familiar with its main business is coffee (although im a tea drinker my self). The company as of 2009 made US$9.77 Billion in revenue. The coffeehouse is also a strong believer of using technology to push there business forward, some examples of this are outlined below:
  • Free Internet Access: Considered to be one of the first coffee houses to offer such a service, Starbucks has utilized this offer to attract customers and keep customer in there store and buying coffee.
  • Partnership With Apple: Starbucks in the US especially is known for the music it plays within the store so it made sense to offer customers the chance to purchase the track they just listened to from the Apple iTunes Store. Starbucks even gave away a number of songs via the store.
  • iPhone Apps: find your closet store or browse the menu or even pay for your coffee using the app.
  • Social Media: Starbucks is one of the most followed companies on the planet thanks to the methods of approach taken by there marketing team. Its social media success is delivered on a number of fronts. As of June 2nd 2010 the Top 10 consumer brands on social media where as follows.
  • Even more staggering is the increase since June, as of today Starbucks has over 12.5 million follows on Facebook and just under 1 million Twitter followers. Starbucks also uses social media heavily in looking for employees. Starbucks uses these forms of media to push products and promotions.
  • Youtube: Contains information on coffee blends, advertising and conservation approches.
  • My Starbucks Idea: Another aspect of social media that is used heavily within the Starbucks brand is there “My Starbucks Idea” portal which allows customers to make suggestions about anything Starbucks. This form of outsourcing has proved very fruitful for the coffee provider with nearly 100 ideas launched that where directly suggested by customers on this site.

The following presentation slides shows some of there approaches and success:

Having that many people follow a organization on social media has meant that the Starbucks has had to be very careful on protecting its brand and understanding many legal risks and laws that are outdated and not applicable to todays social media craze. Some examples in my opinion are as follows:

  • Customer Database: with over 12 million followers on Facebook it is important to ensure that the sharing of any possible information about these customers is kept within the business. The fact that Facebook uses the term “followers” allows some interpretation on the rule, as it implies the fans have given permission to share there details.
  • Confidentiality: its important despite the appearance of openness towards social media that privacy and confidentiality is still taken seriously. An example of this is the use of photos from Flickr and what permission you grant Starbucks in posting them:
  • You hereby grant Starbucks Coffee Company and its affiliates (“Starbucks”) a non-exclusive, worldwide, royalty-free right and license to use, copy, publicly display, publicly perform, publish or distribute any still or motion images that you post on or submit to the Group
  • Starbucks has come in for alot of stick for this approach but its large number of terms and conditions it outlines on the site are according to law.
  • Reputation Risks: the way Starbucks and its employees act online in front of the millions of followers is hugely important and one slip of this proffessionalim could result in the devaluing of the brand. Starbucks obviously understand this risk and have been careful to date to provide customers and there brand name with the the respect and diligence expected in a offline environment.

Starbucks are far more than a coffee company and this approach to social media appears to have set them apart from many other companies and given them a real foothold into a new market and alomost certainly increased there market share with Gen-Y. Despite this its important for brands and there employees to remember that even in the virtual world the same laws apply!

Please Note: I have also emailed Starbucks social media expert in regards to any guidelines there employees are given so ill update the post if i hear anything back.

Some of the websites used for research:

Social Media Sabotage

Social Media Success: Starbucks

Starbucks: 4 Keys To Social Media Success

Starbucks Social Media (GREAT LINK)

Social Media Superstar: Starbucks

Social Media Casestudies

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3 thoughts on “A Cup Of Coffee, With Social Media On The Side

  1. To be honest, I was never fond of Starbucks, looked at it as if it was just another coffee shop down the road. However, after reading what you’ve posted about the company, it’s definitely more than just a coffee shop! HAH.. I think it’s safe to assume that 12.5 million of their followers on Facebook have at least bought a coffee or two. Just imagine the magnitude of their yearly revenue! Making use of web 2.0 applications is definitely a proactive approach for Starbucks. It is by far, the best marketing tool for our techie world.

  2. The fact that Facebook uses the term “followers” allows some interpretation on the rule, as it implies the fans have given permission to share there details.

    This is an interesting area. It is questionable how much ownership of this data they have. I have noticed when you enter a comp or sometimes even simply like a page on facebook, depending on what the company wants to know, it asks if they can access and use the information. So realistically does this mean they own your information, and therefore can do anything they want with it? Looking at it that way, it is pretty scary how many people/companies know more than you think 😉

    I use to *like* everything I found funny or interesting, however after looking into this risk I had a good think about it. Seriously, when am I going to need to go back to that page again? Is it worth the risk of sharing my information? Following that, I went and deleted all the pages I liked, only keeping the ones that I would return to.

    Another interesting point, how do they use this data? I for one know that many supermarkets use customer loyalty programs in their marketing strategy. How you ask? Well, they have your address and a database of all the items you buy. They take this information, and using funky formulas they find what items are the most popular in certain areas, and target that area for those items.

    Just some food for thought 🙂

    Also I am interested to see the guidelines they have, hopefully they get back to you 🙂

  3. Pingback: Starbucks 2.0 « Dan Howe's Blog

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