For many homeowners and commercial landlords, a Starbucks in the neighborhood is great news. It’s not because they love coffee (well, some probably do), but it’s because they know they can benefit from the Starbucks Effect.
What is it? It is the idea that a Starbucks store increases the property value of the area. For some reason, its presence invites the opening of other premium businesses. In turn, commercial buildings can charge better rates, and home values increase.
In fact, in a Zillow study using data from 1997 to 2014, homes closer to the shop increased their market value by over 95 percent—way better than the average 65 percent of other US residences.
But what makes Starbucks such a huge hit that it can already create more economic impact? Certainly, it’s not just the coffee. This company knows how to do marketing right.
1. Starbucks Knows—and Applies—Its Vision
This coffee company that started in Seattle has a clearly defined vision: it just doesn’t want to sell the best-tasting coffee in the world. It wants to make itself the third place—the missing connection between work and home.
It foresees the coffee shop as a place where weary employees can relax before the morning grind or after a full day’s work. It’s where families and friends can socialize in a different but comfortable environment or where new entrepreneurs can close their first sale.
To achieve this vision, Starbucks focuses on the overall ambiance of their shop. First, it tries to match the cafe with the vibe and story of the surrounding community.
Heritage coffeehouses celebrate the beginnings of the brand, so community tables are wider and blinds are made of wood. Artisan Starbucks stores are present in urban markets and feature a 1930s modernist look that includes steel beams and masonry walls.
Regardless of the design of the store, all maximize the effectiveness of lighting. They sport large glass windows to accommodate natural light during the daytime. Warm lights, meanwhile, evoke warmth, coziness, and comfort, so guests feel more relaxed.
2. It Builds Communities
One of the underrated marketing strategies today is creating a community website, particularly one that advocates the brand. It offers a long list of benefits that includes:
- Fostering deeper, more meaningful relationships with existing customers
- Promoting brand loyalty that converts these existing consumers into the company’s ambassadors
- Designing or creating products and services that match the needs and preferences of consumers
- Bringing the brand closer to leads so they proceed to the deeper levels of the sales funnel and become customers
- Making marketing strategies more cost-effective (customer retention helps lower marketing spending while increasing revenues)
There’s no perfect example that illustrates the power of brand community than Starbucks. The coffee company was one of the few that capitalized on it when it launched the My Starbucks Idea over 12 years ago.
The concept was simple: Starbucks customers or not, they can give their suggestions on the designated page. No idea is outrageous or basic—anything is welcome. Then, community members vote on the best.
Since then, the coffee brand has launched over 250 ideas, some of which you may be more familiar with. These are free birthday treats, hazelnut macchiato, and free WiFi. The green splash sticks were idea #1 while the pumpkin spice latte was idea #233.
Starbucks didn’t stop with having the microsite. It paired it with the Ideas in Action blog, so customers and community members can keep track of which suggestions the store is planning to adopt and their status.
3. Starbucks Promotes Sustainability and Social Causes
The coffee brand also knows one thing many marketers fail to miss these days: consumers don’t choose companies based on products and services only. They want one that cares. In a 2020 report, over 40 percent like to seek purposeful brands and trust those that contribute meaningfully to society.
Starbucks works on many causes, and one of these is sustainability. The coffee shop uses social media, its website, and both offline and online ads to talk about how they plan to become more environment-friendly.
For example, they’ve switched from incandescent and halogen, which consume too much energy, to LEDs. In 2018, it launched the Green Store Framework. Under this program, it aimed to convert 300 stores to be 100 percent powered by renewable energy.
By 2030, it plans to reduce its carbon footprint by 50 percent and over the years add more plant-based options into the menu. It will also decrease the amount of the stores’ waste that ends up in landfills by half.
In the end, the biggest takeaway from these lessons is that products and services can only get you far. It is meaningful, reliable relationships that make customers stay.