Marketing News and Blogs
27 January
A night with Howard Schultz, Chairman and CEO Starbucks
I haven’t been in a Starbucks for years – but clearly 15 million people a week do. Howard Schultz, the 56 year old New Yorker seemed relaxed to tell his story about how Starbucks has grown to 16,000 stores globally. He grew up in a tough neighborhood in Brooklyn, in the equivalent of a council house. And regrets going public with the company in 1992, to pay back early investors. He is man who loves what he does and is on a mission to reengage staff with the customer.
In front of an audience of some 500 top UK marketers at a Marketing Society event, he said he knew nothing about traditional business or marketing when he began in 1982. He failed to inspire the then owners to sell a ‘Milan style’ coffee experience, unheard of in the US at that time, alongside selling their staple of coffee beans. He left and started his own café called Il Giornale and a few years later took over Starbucks. He has strived to create a company with a soul. There have been detractors along the way; a constant target for anti-globalists and 16,000 employees started a campaign to get union rights in the US. More recently in the UK there was ‘dipper wellsgate’ in 2008, were stores were exposed for using continuous fresh-running water to clean utensils (although they’ve stopped now). Howard isn’t afraid to speak his mind, upsetting Lord Mandelson with recent remarks about the UK being in an economic “spiral” down.
He is experimenting to recreate ‘the community’ (very much the early focus) that many feel has been lost; the new London store in Conduit Street has second hand furniture. And stores have even gone unbranded in NY trials, selling alcohol and opening late. A challenging job when you are in 44 countries with a US centric view. Consultants said it would fail in Japan where they have just opened their 1,000th store. Howard was quick to defend his CSR – not as marketing, but as the heart of the company. He was surprised by a question from Café Direct about how they were supporting African workers and their plans for Fairtrade tea. Tea is 1.5% of total sales and he explained their conversion to Fairtrade coffee last year. RED featured heavily in how the company is ‘bigger than coffee’. As did the campaign to encourage young Americans to use their vote last January. And Weyclef’s film asked people to get behind the Haiti campaign. Our host said ‘London was the world capital of cynicism’. I was surprised he didn’t feel the need to explain the inter related elements of all the good work they are doing. He mentioned micro lending, water projects and that the ‘coffee for a votes’ scheme would run during our general election. I hope these are the bedrock of their business and not just new fads. Starbucks could mean much more. Ethical Consumer ranked them at the bottom of the café survey in 2005, which demonstrates how much still has to be told about the Starbuck story. Particularly in the UK.
6 January
What to do to help the environment
Happy New Year. Why not start 2010 by making the following positive changes:
1. Reduce eating meat. BBC Bloom say giving up meat could save 15 times as much CO2 as switching electricity tariffs! Approximately 17-30 % of global CO2 (growing, producing, importing – rising if you include deforestation) comes from meat production
2. Design your living and work around the most beneficial natural lighting / heating; which could mean using 75% less energy
3. Get a green tariff like Good Energy (which sells 100% renewable). Even better, club together with neighbours and micro-generate from the wind and sun, reducing reliance on dirty power
4. Turn off power when not needed: appliances on stand-by need 20% of their full power
5. Install meters to measure your water and energy: monitor the ‘bandwidth’ you want to be in and try and reduce how much you use
6. Buy FSC certified paper and MSC certified fish: both guarantee sourcing from well-managed, sustainable stocks
7. ‘Buycott’ – being the opposite of boycott – support products which are making a difference environmentally and socially such as Fairtrade products: particularly where tea, coffee, sugar and chocolate are concerned, benefiting workers in the global South
8. Eat and drink the view. Eating locally produced organic foods not only limits how far your food has travelled but also protects our rolling green countryside. Riverford deliver the best boxes fresh to your door with recipe ideas
9. Stop washing your clothes so much – do all those shirts need to be washed and ironed every day? Those towels could be used for one more day? Then save energy and wash them at 30°C rather than 40°C, reducing the electricity by around 40%
18 November 2009
UK charities must learn for the next recession
It’s been a tough year for most of the 170,000 UK charities. Increased financial pressures and for some, mergers and closures. Cash struck charities are experiencing a downturn like no other. Redundancies have been up to 35% and Oxfam, NSPCC, Christian Aid and CAFOD are the latest to announce staff cut backs. Legacy giving has dropped like a cold stone, with reduced property value directly hitting charities’ income. And we now know that individual donations declined as much as 11 per cent last year.
But there is some good news; supporters with strong relationships to their chosen charity are continuing their support - good old brand values are still key to maintaining engaged and happy people. Similarly, corporate partnerships have gone from strength to strength where close and meaningful relationships exist with the given charity. Although, it has to be said, times are much tougher for corporate events.
Also, where there have been a few new hirings, a couple of forward looking charities have specifically targeted recruitment materials to attract new blood from outside the sector. This is by no means a new trend, but it is interesting to see a more active approach to attracting new people.
Finally, good news for media costs which have plummeted affording many the opportunity to leverage some nifty marketing for less money. There is also a trend for more charities to do their own design and digital work internally.
So what are the lessons for the next recession? To develop deep and meaningful relationships with all your current supporters, demonstrating the value and difference their support brings. It is also wise not be too reliant on any one income source, allowing a diverse income portfolio to protect you during the less good periods. Finally, having a clear and robust talent strategy will help with any changes needed to the work force; ask yourself who are the rising stars you would like to keep and where do you need fresh talent from outside the sector?
17 September 2009
Should corporates put more money into charities?
I chaired a debate last night as part of the Marketing Society’s not for profit group. Leading the opposition was Chris Macleod, Head of Group Marketing at Transport for London, London’s largest advertiser. Seconded by expert Richard Harrison, Director of Research at The Charities Aid Foundation, working to create greater value for charities and transforming the way donations are made. And finally Neil Boorman writer, journalist and consultant, who famously lived without brands for a year.
Supporting the motion was Dax Lovegrove, Head of Business and Industry at WWF responsible for developing corporate relationships with the likes of M&S, challenging unsustainable practices. With seconder Maya Prabhu, Senior Philanthropy Adviser from Coutts & Co, where she advises and creates strategies for family foundations and also ensure issues and causes are understand. And finally, on the team Paul Farthing, High Value Relationships Director at Cancer Research UK, one of the UK’s biggest charities with over £420m income raised last year.
The debate was won by the team supporting the motion stating that the big NGOs had the expertise to address the big global challenges like CO2 emissions, AIDS and water scarcity. More cash would enable solutions to be found, developing new systems working with corporates to potentially ‘future proof’ our planet’s resources. Of the £44billion income received by UK charities only a 20th comes from corporates, is that too much to expect? The opposing team said that corporations weren’t set up to give money in this and they too called for a new model which moved away from the old fashioned ‘alms house’ giving to new ways to embed within business with better accountability at its heart. Also only the cuddly popular charities would survive – what about the less appealing causes? And shouldn’t corporate tax been used to address some of these issues?
For further information please visit http://www.greenbananamarketing.com/
28 July 2009
Windy McDonalds maybe the answer
Achieving lower carbon emissions by 2020 is no easy feat. The government’s recent white paper has real targets and new ideas. But the main concern is that industry has been left off. The market does require incentives for industry to make the investments in new technologies.
Ed Millband predicts up to 400,000 new green jobs will be created by 2015 (rising to 1.2 million by 2020). Difficult to imagine in face of the closure of the wind turbine factory on the Isle of Wight. The Danish company, Vestas Wind Systems, plans to make 625 workers redundant at the end of July, despite rising profits and strong demand. The UK just won’t be able to scale up renewable energy projects. There are only 2,500 wind turbines in the UK – we should be the global leaders in wind turbine technology.
Which brings me back to companies - many of whom are already leading in the field of energy saving technologies. But I can’t help thinking that McDonalds could hold the winning card - transforming our relationship with energy and food. Imagine the restaurants in 5 years time; powered by renewable energy, meat and veg that is sourced from the very best British farmers. The message would be all about eating what’s in our back yard and using micro generation to power their sites. Now that would make me start buying burgers for my kids. British farmers, the energy story, and addressing obesity - something that would make a real difference. They too have finally been hit by the credit crunch, Mr Ronald McDonald it could be time for change, a new name and government grants for Mr McDaylight. Now that would help hit Millband’s new green jobs target.
1 July 2009
Art of climate Change
Artists all over the world have responded to climate change. Whether it’s feelings of dislocation on seeing giant snowballs melting in the City of London, made by Andy Goldsworthy in the Arctic and brought back to slowly melt in the urban City heat or seeing the inspiring and diverse responses of the artists travelling on a ship to see the Arctic melt and the effects of climate change first hand. Endangered Species; bone shapes caught in a last gasp movement by the infamous contemporary dance choreographer, Siobhan Davis and Antony Gormely’s cast in the Arctic snow, are quite different interpretations. Interestingly Ian McEwen’s only non visual expression most accurately describes the devastating effects of climate change. He captured the very real sense of the planet’s degradation at our hands. Each artist creates their own unique vision.
The artists demonstrate how difficult it is to have a common vision or language for something as complicated as climate change. It doesn’t require a deeper knowledge and its so all encompassing from coral bleaching, that has seen an unprecedented increase in the last two decades to the eventual extinction of certain plant and animal species by up to 50% in 50 years. The Arctic sea ice will completely disappear during the summer months by 2080, making future artist trips very different.
Climate change touches us all in different ways and it’s our responsibility to respond in whatever way we can. Previous civilizations like the Mayans who failed to collectively respond to nature’s challenge, ultimately failed. So it is my belief that we should make every effort to celebrate everyone’s contribution to making a real difference to climate change, their art of climate change.
June 10th, 2009
MP's expenses; a move from conspicuous consumption to conspicuous contribution.
Like me, you were probably initially incensed by the MP expenses scandal. Now after five weeks I’m bored of the story and would like to know what the plans are for moving this forward in away that is workable and hopefully something that we all feel we can trust in.
After five weeks people do still have an appetite for more, but how long can it run? The original circulation of The Telegraph and The Sunday Telegraph was boosted by around 700,000 copies after two weeks, but initial gains in readership must surely be tailing off, with the paper now boxed into an interesting spot in terms of what it does next.
The bigger potential learning from this story is the importance of organisations having a clear and transparent approach to its policies. The MP’s expenses was such a hot potato as it came at a time when other people were losing their jobs, cutting corners on their own expenses and dreading, in some cases, what is coming next.
As governments and corporations focus their agendas on development and climate change issues, it is critical that these are thorough and cohesive across the whole operation. As our natural resources become even more depleted and carbon rations a part of every day, consumers will be very unforgiving of organisations that say one thing and do another behind closed doors.
As we come out of the current economic downturn, more and more people will be moving away from conspicuous consumption to conspicuous contribution. People will want to know more about the companies they have a relationship with. It won’t be good enough to simply sell products and services. The critical policies around supply chains, what impact certain product categories have on the environment will be the make or break of tomorrow’s companies and more importantly, those companies who are the most open, transparent and consistent will win.
Giles Robertson
Chairman and founder of the Not For Profit group and founder of green banana marketing consultancy www.greenbananamarketing.com - brand and business growth for the ethical and sustainable sectors.