Buy Your $5 Starbucks with Pride, You’re Helping to Change the World
#1 Thing You Need to Know about this Post:
The only sustainable way for you to create wealth for yourself is by improving the lives of others. Starbucks understands this and so can you.
A More Detailed Exploration
In case you just missed it in the opening sentence, I have an earth-shattering announcement to make:
The only sustainable way for you to create wealth for yourself is by improving the lives of others.
Despite what you might have heard from others, the only true path to long-term wealth creation comes from the careful balance of private gain and social good. Think about it. You create wealth when a lot of people think what you offer to the world is important enough to them that they pay you money and then keep paying you money over long periods of time.
Sure, a person can make lots of money at the expense of others, but those scams and bubbles can go only so far before everything comes crashing down. Just look around at the current financial meltdown and the litany of corporate and government scandals that have littered the daily news since forever.
With the bright, shiny light of the Internet and the self-organized swarms that come with it, it’s pretty hard for graft, corruption, and bad business practices to go undetected and unpunished for too long. That’s especially so when you are a well-known global company that sells its products and services to the 1 billion people on the Internet and 3.3 billion with mobile phones.
Cause Marketing and Corporate Social Responsibility Isn’t New
One of the hot, new concepts in business today is cause marketing. The same goes for corporate social responsibility. While many are heralding these as the newest, most amazing business ideas of humankind, you and I know they’ve been around since the earliest days of commerce.
In case you already forgot my earth-shattering announcement, long-term wealth cannot be created at the detriment of those funding it. Some how, some way, somewhere along the line, common wisdom forgot this fact. I’m sure there are great theories on why this happened, but I’m saving mine for a future blog post. In the meantime, let’s agree that it makes good business to improve the lives of others.
Rich and Successful in More than One Way
You and I can agree that we humans have an easy time being suspicious of very successful people, right? In my years as a major gift fundraiser, I spent countless hours visiting with men and women who’ve made financial fortunes most people can only imagine. So what type of people do you think these wealthy folks were?
Contrary to popular belief, I found that they were often the nicest, most decent-minded individuals I have ever met. Of course, there were a few top-notch SOBs; but those were a small fraction of the sum. For the great majority of them, though, they were focused on making sure the wealth they created would go to help solve the pressing needs of the many.
The Same Can Be Said about Starbucks
Before we go too far into this, let me be clear that I am writing this post on my own volition and have no relationship with Starbucks other than being a semi-regular customer. Yes, I am fallible and, like any person, my opinion can be bought for the right price, but it hasn’t been this time.
As long as we’re being candid with each other. I need you to admit something to me. Right now, do you have a very distinct perception of Starbucks already formed in your mind? Whether you view them as the epitome of evil, a sputtering giant who has lost their way, or your reliable local coffee house, can you admit that you have some sort of opinion of them? Thanks, I appreciate your honesty. Just for a few moments, I ask you to open your mind to the possibility that this perception is wrong.
Believe or not, Starbucks was once just a local coffee purveyor in Seattle, Washington. It was in the “good ol’ days” when coffee houses were known for their eclectic charm, beat poetry, and defiance to the establishment. So it has been quite an interesting journey Starbucks has taken to bridge that socialistic vibe with the mainstream customers (the much despised bourgeoisie) they needed to grow into the global corporation every proletariat coffee house patron despised.
Doing Good by Selling Lots of Coffee
While I can’t vouch for every single person who’s personally profited from Starbucks, I believe the same can be said for them as I said about the wealthy people I’ve met. When you consider the industry they’ve transformed, it’s no surprise to learn they have a strong core commitment to use their wealth wisely.
Starbucks was held to very high standards by its early customer base. They had to be extra vigilant about where they bought their beans and who’s profited from the wealth they’re creating. When they forgot this early in their growth curve, it was a hard lesson they learned and one they have been keen to remember.
Howard Schultz sheds much light on this topic in his book, Pour Your Heart Into It, and so do many others who have written about Starbucks. For the purpose of this post, it is important for you and I to acknowledge that Starbucks has made being a good corporate citizen a core part of their company culture.
The “What Have You Done Lately to Improve the World?” Question
I’ll leave the health care and employment benefits for their full- and part-time partners to someone more qualified on the subject. For obvious reasons, I want to explore what they are doing externally, specifically in terms of cause marketing and corporate social responsibility efforts.
Over the past few months, I have been conducting top-secret research at Starbucks. At least, that’s how I justify my caffeine addiction right now. I began to notice a lot of things they were doing to make a difference in my local area and around the world Some of these efforts were widely publicized and others were quietly sitting around me in the stores and in their online efforts.
Yesterday, I challenged those brave souls who follow my Twitter stream (aka the @ScottyHendo Spectacle) to name five cause marketing initiatives Starbucks has conducted in the past three months. While most could name the (RED) campaign, only a handful came up with more. Without a doubt, Eric Reagan from Chicago (@ericreagan) came the closest by naming four.
Here are Five Things Starbucks Has Done Lately:
- The (RED) Campaign – this includes the 5 cents they donated for each holiday drink purchased in December and their commitment to give 5 cents of every purchase made by people using the new Starbucks (red) pre-paid card. All proceeds go through Bono’s (RED) organization to benefit The Global Fund, an international organization dedicated to fighting AIDS, tuberculosis, and malaria.
- Pledge 5 Service Drive- in celebration of the National Day of Service held to celebrate Martin Luther King, Jr. Day, Starbucks launched an integrated campaign that included in-store displays, free coffee for anyone pledging to perform five hours of service, and a website to formally commit and get resources where you could volunteer. The site claims to have generated over 1 million hours of community service pledges.
- The Starbucks V2V Network – in April 2008, Starbucks became the pioneer corporate partner of the V2V Network, an online space for individuals to help other individuals around the world make a difference in their communities. So why does this count for the past 90 days? Because it has become an active community platform that is used to coordinate fundraisers and social actions, including a Run/Walk in my community this November. Check it out and see how you can help with specific projects and ongoing ones, as well.
- Starbucks Shared Planet – Coming directly from ideas and feedback garnered through their My Starbucks Idea website, the company announced the launch of this new global initiative in partnership with the Earthwatch Institute and Conservation International. As the site says, “It’s our commitment to doing business in ways that are good to the earth and to each other.” It goes on to outline their goals for 2015 in the areas of ethical sourcing, environmental stewardship, and community involvement.
Local Community Campaigns – At the same time all of these initiatives are underway, each Starbucks store is still encouraged to operate like the neighborhood coffee house. Every store has a community bulletin board that can be used to promote community events. As I walked into the Starbucks near my house, a flier caught my eye (see right). In honor of National Mentoring Month, volunteers to the Big Brothers Big Sisters of Central Indiana can receive a free tall cup of coffee. According to @joewaters, something special happens every March in the northeastern US, too. What’s happening in your area?
Extra Credit
Coffee for US Troops – In various US stores, you and I can choose to buy whole bean Starbucks coffee and they will ship it directly to US troops serving abroad via the American Red Cross. Despite Internet rumors to the contrary, this program is alive and well.
Witness the photo I took last week at the Starbucks in Chicago at Illinois Street and Michigan Avenue I visited during the BlogWell conference. Admittedly, this cause marketing/corporate social responsibility example might be questioned by some given the nature of the troops’ line of work. But, it is certainly so in the minds of the troops and their supporters.
A Strategic Online Presence, Not Just a Big Website
As you peruse the sites I’ve linked to, I want you to notice how they are seamlessly integrated. Enter either the Pledge 5, My Starbucks Idea, Shared Planet, or the Starbucks V2V site and you can easily find the others. Instead of trying to build one massive website, they have built a constellation of websites that form a cohesive web presence. In addition, each site has an intuitive navigation with very specific calls-to-action. I know they want me to pledge to bring my own mug. I know they want me to pledge 5 hours of service. And so on.
Parting Thoughts
To pull off just one of these initiatives would take a very large commitment of resources. To launch and run all of them takes a complete and total commitment by the company. This is not something for the faint of heart. What impresses me most about it all is how Starbucks has started by making a strategic commitment and is driving all its efforts (global, national, and local) from this strategy. Their actions speak louder than words, so let’s start listening to what they’re doing.
Update: The same day I posted this, Starbucks announced more layoffs and store closings (Hat tip to @cvgstrategy). Interesting to note the focus on efficiency hasn’t led to elimination of the programs I mentioned. In fact, their increased focus on them indicates to me that their commitment is at their core, not just window dressing.
Enough About Me, What About You?
So what do you think? Is Starbucks truly committed to doing good? Are they are an example to follow? Can you really only create long-term wealth by improving the lives of others?
Find Me on Twitter
@scottyhendo
You can leave a response, or trackback from your own site.
January 28th, 2009 at 3:14 pm
As someone who is very passionate about cause marketing, and the belief that profit and goodwill can happily co-exist, I’m thrilled to see you highlighting cause marketing campaigns, and furthering the concept of today’s ‘conscious capitalist.’
I don’t think Starbucks is a shining example of an inherent commitment to doing good, however, and if you delve further into their initiatives, very miniscule amounts of profit actually go toward the causes they claim to support.
The Project RED campaign, for example, donated only .05 per cup of (overpriced) coffee to the cause, and there is little to no transparency with customers as to the impact of their efforts or where consumer contributions are going.
In the cause marketing series that I am doing for Triple Pundit, ‘Conversations in Cause Marketing’ (http://www.triplepundit.com/pages/cause-marketing/), and the research that Cone Inc. has done, reinforces consumer demand for not only doing business with a socially responsible company, but also to understand what benefits their retail purchases are making in the featured causes. Starbucks does not communicate the results of their campaigns but spends a great deal of time and effort promoting them in the market. When they’re over, who knows what impact they had, other than a sales spike on their revenue grid.
The argument is, of course, with the amount of coffee that Starbucks sells, .05 per cup could add up significantly, and I agree, but I think it speaks more to the lack of true integration with the cause, and is used merely as a sales tactic to prey on consumer sensibilities and create the perception of doing good.
To me, the campaigns you featured are just well orchestrated promotions using a cause as a hook that Starbucks, being the powerhouse retail chain that it is, can easily implement, run and manage.
That said, I do believe that Starbucks has created an effective ‘formula’ for doing good, tying their campaigns across multiple channels and current events such as their post-inauguration “I’m In” campaign that encouraged latte lovers to visit soup kitchens or otherwise commit to giving back.
Between January 21-25, Starbucks customers who promised to do five hours of community service during 2009 received a pledge card and a free cup of coffee at their local Starbucks store.
But even that campaign gave consumers only one free cup of coffee, so in essence, Starbucks had to do little work — nor volunteer themselves — to reap the benefits of appearing socially responsible. Their customers are essentially doing all the work and all they had to do is pour the coffee and print the pledge cards (and did they use a green printer?).
What they’ve done is perfected ‘marketing with meaning,’ so there are definitely things that can be learned from their efforts but they are certainly not the pinnacle in conscious enterprise.
There are far better examples of those with a deep, core commitment to making a positive impact on the world, in addition to their bottom line, such as Timberland, Sweet Leaf Tea, Yellingbo Gold and sweetriot, all of whom I have — or will be — spotlighting in my cause marketing series as those who are doing it effectively, and creating tangible change in the process.
So while I may not agree with your choice of companies to highlight, I do wholeheartedly agree that it is not only possible — but imperative — for companies to profit while simultaneously doing good. Even with a tactical-driven approach like Starbucks, the causes still benefit in some approximation, so I am in support of that over the mere lining of corporate pockets.
The collective good is what matters overall, but when a company is built upon the foundation of sparking change and improving lives as an integral element of who they are and what they stand for vs. employing cause-related tactics to appear conscious, their efforts are exponentially more powerful — and sustainable.
January 28th, 2009 at 3:26 pm
Scott,
Great post. Results are what count. People can knock Starbucks all they want – how expensive the coffee is a what not. In the end, are they improving the lives of folks who suffer the most. The poor, the sick. That’s what counts.
Now, my question: Can a net social good be calculated? Starbucks pumps thousands of tons of paper goods into landfills (I threw away a cup the other day – with a plastic top). They have also been know to drive local coffee shop owners out of business with “unfair” local trade.
So – is there a net? Can we write off the bad because they do so much good?
John
January 28th, 2009 at 3:29 pm
An addendum:
My previous comment does not mean that people should feel good about the social cause marketing they do. Go. Buy that Latte. But recycle the cup!
January 28th, 2009 at 3:56 pm
Didn’t Starbucks run a “get a free coffee if you voted” campaign in the recent US elections?
January 28th, 2009 at 4:10 pm
@JohnHaydon – I think you bring up a good point about calculating net social good. There definitely needs to be an effective way to measure the impact of cause marketing and socially responsible activity overall.
But the fact that Starbucks contributes to endless amounts of waste that end up in landfills, among other environmental indiscretions and unfair trade practices, proves my point that their cause-related campaigns are the product of glitzy marketing vs. a core commitment to social responsibility.
If it were the latter, it would be present throughout ALL of their business practices — internally and externally — not just in consumer-facing, sales-driving initiatives.
I do not discount that good still comes from the monetary donations they generate for their promoted charities but if they are negatively impacting the environment and local trade in other areas of their business, how can we view them as a shining example of social responsibility?
The fact is that profit is still king to them, and they are not willing to spend the extra money on greening their practices or alternative paper products for their coffee. Their cups are not recyclable, and even if they were, many Starbucks stores do not even have recycling bins.
Sustainable business is defined as people, planet and profit in equal priority, and if we are to use that as a barometer, Starbucks falls more than a ‘latte’ short.
January 28th, 2009 at 4:30 pm
Bill Gates made a great speech about creative capitalism last year, prior to his stepping down from his Microsoft post to spend more time with his Foundation.
In it, he suggested that businesses should look at ways they can give back to the needy and still have profit. Sometimes recognition for good is profit enough.
It seems such a simple thing to do, and yet so many question the benefits. Isn’t making the world a better place for everyone benefit enough?
January 28th, 2009 at 5:10 pm
“The Project RED campaign, for example, donated only .05 per cup of (overpriced) coffee to the cause, and there is little to no transparency with customers as to the impact of their efforts or where consumer contributions are going.”
The minute I hear ‘overpriced’ I immediately discount everything I hear after. If people pay it, it’s not overpriced. This is such a simple concept. That YOU think it’s overpriced does not make it so. I name a hundred other things I feel are priced worse than starbucks coffee, but if people buy them, my feelings don’t matter.
Starbucks is not much different in price than a dunkin donuts or other specialty coffee shop. Pure drivel.
January 28th, 2009 at 8:30 pm
Good to see a healthy discussion going on here. Some further thoughts
@Daniel Oyston – yes, they did.
@Gennefer – Starbucks is in a similar position as most incumbent corporations. They have built their companies within a supply ecosystem that is shifting from pump & dump to sustainable product lines. This takes coordination from the major purchasers of these products representing multiple industries.
Based on both of your comments, I can’t tell if you’ve taken the time to visit the sites I’ve listed. Either way, I disagree that they’re just committed for publicity’s sake.
But, for discussion’s sake, let’s assume your sentiment that Starbucks is just concerned with the profit is true. If we can agree that the only way to create sustainable wealth is by improving lives, then Starbucks will be forced to deepen their commitment or face further erosion of their wealth.
I think Starbucks biggest challenge is demonstrating how deep of a commitment they truly have to the causes they promote and their sustainability & social responsibility efforts. Fortunately, we can all shine our bright lights on them and see for ourselves. And, they can, too, most effectively by letting individuals tell the stories themselves without Starbucks editorial control.
@johnhaydon You’ll be glad to see on the Shared Planet their 2015 goal of having 100% renewable, sustainable containers. And you can pledge to bring your own mug to help reduce landfill.
@DannyBrown I’ve been encouraged personally and professionally by the tone and approach Bill and Melinda Gates are taking. He’s rising to the occasion.
January 28th, 2009 at 8:47 pm
I think Dave makes a good point about if people pay it, then it isn’t overpriced.
Also, it says a lot about a company who gives away even in tough times. And I think Starbucks did release information about how their Product(RED) beverages were helping, as of mid-December they have committed to 1.4 day of medicine to AIDS relief. Impressive.
January 28th, 2009 at 9:41 pm
Regardless of what you think or how you feel about Starbucks, can anyone honestly say that if every company in America–large and small–adopted the themes of the five cause marketing and CSR strategies Starbucks has, wouldn’t the world be a much better place?
If you answered that question the way I did, what’s that say about Starbucks?
January 28th, 2009 at 11:28 pm
@ScottyHendo Thanks for taking the time to respond. This has been an excellent — and insightful — discussion.
I did review the sites you included in your post, and what I saw was impressive about seeking to improve the lives of farmers et al, but I don’t see that exemplified across their business practices. No one can deny Starbucks is adept at marketing and PR, and I believe that much of the impetus for creating this ‘doing good’ stance is image-based, albeit meticulously executed.
I agree it takes considerable effort and coordination to move toward total sustainability, but other large scale companies like Apple have undergone that arduous process — and expense — in their product development and manufacturing. Plus, they make those changes, along with the results, public on their website, which is updated regularly.
I still hold firm to my original point that Starbuck’s does not epitomize a socially responsible company across the board. At least, not yet. I view them more as a leader in cause marketing. Their campaigns are elegant and compelling, and most importantly, they resonate wth their audience. So, when Starbucks loyalists support those activities, it is still beneficial for the cause.
But being socially responsible extends far beyond just charitable donations, and companies who exemplify a unified CSR approach are affecting tangible change overall vs. arbitrarily attaching their marketing efforts to increase sales and spark the halo benefits of goodwill for their brand.
At the end of the day, what we can definitely agree upon is the fact that Starbucks — and others — will be forced to deepen their commitment as consumer demand for social responsibility increases and a sustainable CSR model becomes the standard way of conducting business as opposed to just a competitive differentiator.
Until then, all efforts toward change have value and are a step in the right direction.
July 5th, 2009 at 9:52 am
[...] Buy Your $5 Starbucks with Pride, You’re Helping to Change the World 2009 July 5 by scottyhendo This post was originally posted on http://blog.mediasauce.com on 1/13/2009. Comments can be viewed here. [...]