Starbucks Clover: A Missed Revenue Opportunity
What is the greatest coffee secret at Starbucks you never knew? Simple answer: a cup of coffee from its Clover machine.
I will get to the sales and marketing point of this blog post in a moment. But first let’s talk about a subject most of us love: coffee!
If you've never had a "Clover," you're missing out. It makes a single cup of coffee at a time. The coffee is ground in the moment. You choose what type of coffee you want. (My favorite is Sumatra.) It’s kind of like an upside-down French press machine.
Did I mention that a Clover coffee is the best tasting coffee you will ever drink?
But recently Starbucks decided to do away with its Clover machines (and its Reserve Stores in general). And this week, despite many pleas from myself and other customers, the Clover machine was removed from my local Starbucks store.
So, what does this have to do with retail marketing?
Simple. If you're a reader of mine, you know I'll always provide tips you can use to grow your business.
Key Sales, Marketing and CX Takeaways Starbucks Missed (Plus a Great Sales and Upsell Technique)
- If you're a Starbucks customer, have you ever heard of a Clover or a Reserve store (much less been in one)? Well, my first rule of introducing something new with your brand is promote, and keep promoting it until you have it working. I’ll give you a promotion technique that works like crazy in a minute. Starbucks seems to have forgotten to promote the Clover, which would have increased its average order value and same-store sales due to the higher price per cup.
- If it fails, let it fail fast. Clover isn't new. When the Starbucks I go to opened six years ago, it opened with the Clover machine. That store, six years later, has many, many loyal Clover drinkers. Despite its lack of promotion, many of us have gotten hooked. Six years later, you know we're going to be upset, a lot more upset than after six months or a year — long enough to test a new product I would say.
- If you customers tell you something, listen. A year ago, Starbucks tried to remove the Clover the first time to make room for its nitro cold brew. Myself and other loyal Clover fans revolted, complained and eventually got it back. We spoke to the store manager (a great guy named T.J. who really pushed for us) and even spoke to the district manager, who eventually made it happen.
- That should have been a big red flag for Starbucks —customers fighting for what they wanted.
- This last time, not only did we go to the district manager, we also went to his boss. But change happens and we weren’t able to save Clover this time. Sad!
A Simple Promotion Sales Tool Starbucks Totally Missed
When I spoke with the district manager and his boss, I told them both about a simple technique that could increase Clover sales and ensure that the machine was an amazing success. The technique goes like this …
Ask people to try the Clover!
Too simple, right? But the truth is, that is all you have to do. That's how I learned of the Clover six years ago. Now whenever I go to a major city like New York, I literally walk past plenty of other Starbucks just to get to the store with the Clover. Get the picture.
When my local store first opened, I came in late in the day asking for a dark roast (Starbucks only brews dark roast in the morning I found out). Some smart person at the register said you can have a dark roast pour-over, or you could try the Clover. It went like this:
Employee: “We don’t have dark roast right now, but you could have a pour-over or try our Clover machine.”
Me: “What’s a clover machine?”
Employee: “It’s kind of like a reverse French press. Come here, I will show you.”
She showed me the machine and I tried it. I've been hooked ever since, and literally go out of my way to find Clover machines when I travel. I even went to a Starbucks in Milano that had a Clover — and you know how good the coffee is in Italy!
The Moral of the Story?
The Clover coffee costs more per cup for customers, but I didn't mind at all. Therefore, it can increase AOV, margin, and same-store-sales for Starbucks. To me, all Starbucks had to do was teach its baristas to do more suggesting. I offered, for free, to teach its local staff, and do some role playing with them on how to present a suggested sale. This would have taken all of a half-hour of their time. Starbucks didn’t respond to my offer. However, to be fair, the district manager’s manager was very nice in his responses to me, and the store staff from T.J. on down — who are awesome, by the way — have been very kind when they see a grown marketer cry.
Think about this, Starbucks, if you're listening. How many people in the afternoons or evenings come in for decaf or ask for a dark roast? All of those people could have potentially been converted to Clover sales, right? YES, right!
In closing, retailers do this online and in person. Listen to your customers, especially their complaints. And train your in-store employees to spot opportunities, or at the very least offer up a simple suggestion on how to increase AOV by offering a cross-sell or upsell.
Questions, comments (I’m talking to you, Starbucks)? Fire away below.
Jim Gilbert has been creating direct marketing programs that drive superior ROI for almost 30 years. Fluent in consumer or B-to-B, creative, operations, and analytics, he marries the strategic and tactical sides of direct and social media marketing in a seamless fashion that gets results. He's CEO of a multidiscipline direct marketing agency, Gilbert Direct Marketing, Inc., which focuses on direct mail, catalogs, DRTV, telemarketing, print, alternative direct marketing media and social media marketing. Jim has been involved in start-ups, expansions and turnarounds, and is an expert in helping multichannel marketers get to the "next level." He's a former adjunct professor, teaching direct marketing at Miami International University, and is President of the Board of Directors of the Florida Direct Marketing Association. Jim loves to talk direct marketing, and has done many lectures on direct and social media marketing.