If Starbucks Won't Caribou Will

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This was an easy one. Starbucks got into some Social Media heat this week when they pulled a promotion. Starbucks was offering a free ice coffee to friends and family via an email marketing campaign. As expected by all of us (but, apparently, not by Starbucks), the campaign went very viral to the point where people were offering up this free coupon for a minimal fee on eBay (and some counterfeit coupons were spotted as well). Starbucks pulled the free coffee campaign citing that it went beyond the intended audience.
What happened?
Starbucks realized that this may be one or two (thousand) more free ice coffees than the promotion had budgeted.
Caribou Coffee picked up on the news and offered to redeem the Starbucks coupons at their locations (on a set date and for a limited time frame).
Two top-level lessons were learned in this promotion and why it matters to marketers:
One, Caribou was able to get tons of free publicity and maybe even pick up a new customer or two (thousand) by leveraging a minimal PR campaign backed into a very powerful Social Media machine that would spread the story far and wide. I had never even heard of Caribou Coffee until this story broke. Now, look at me, here I am evangelizing them.
Two, Starbucks, like Agency.com, Chevy Tahoe and many others before them, underestimated the power of Social Media (which is strange considering that Starbucks is are about to unleash their Podcast, Coffee Conversations). Here was a great opportunity for Starbucks to live their brand. Starbucks is all about community, conversation and affordable luxury. Within that scope they could have let their customers know their intentions and created an adjunct campaign that would not have steered the publicity towards Caribou and turned the online world against them.
The implications are simple. If you are going to run a campaign, be prepared for it to be highly viral and be prepared for the Social Media folks to run with it. The trick is in being able to deal with the results – positive or negative. I’m still having a hard time seeing why Starbucks thought that all of these counterfeit and eBay coupons were a “problem”? Any one of us would kill for that kind of viral success.
What we continue to see is that the bigger the company is, the bigger the brand is, the harder it is for them to deal with something that is highly viral and talked about by many.
Why is that?
Companies are used to having a one-to-many conversation (like buying media on a CPM – cost per thousand basis), so when they have to turn and deal with a one-to-one conversation (viral is spread by one person to another, and Blogs are one person writing to a smallish segment), the wires get crossed and the end result is this:
Big Company speaking like it’s a one-to-many conversation to individuals who thought it was a one-to-one conversation. Visual aid: imagine speaking to your spouse on a stage through a microphone and sound system. With or without an audience, it’s not very romantic.
(Special thanks to C.C. Chapman of Managing The Gray for the tip).


  1. Caribou Coffee rules! There’s one just near the downtown Hilton in Chicago, and people were walking across the street in street clothes in 20 below last year choosing them over the Starbucks in the hotel. OK, so that was because the hotel Starbucks was being renovated, but still…

  2. Great post Mitch. You’ll be interested to know that Starbucks is now being sued by a customer in New York over the coupon snafu for $114 million, the estimated cost of an iced latte for all the customer that got shut out.
    There’s an article in Businessweek about the lawsuit.
    Starbucks needs to think long and hard about their brand and where they’re headed.

  3. Mitch,
    I’m in complete agreement about the PR coup here, but it’s easy to understand why Starbucks had to put an end to this offer. They were offering a free product with almost no restrictions. There was no end date, no limit to how many times you could use it, and no limit to how many people you could forward it to. I think the real problem was the offer itself and not the fact that it was “viral”. They had to get out of this as politely as they could and communicating publically that the offer was cancelled is probably a lot better than waiting until these lucky people were in line for their drinks.
    What is the alternative? Would you would advise Starbucks to just go with it…make their grande iced beverages free to anybody with the energy to track down the coupon on the internet and print it out?
    Caribu’s offer was smart. It introduced customers to a new product they might not have tried or been aware of, and was valid for only about 12 hours.

  4. Why is CARIBOU better than starbucks?
    Rainforest Alliance Certified coffee is grown on farms where forests are PROTECTED, rivers, soils and wildlife CONSERVED; workers are treated with RESPECT, PAID DECENT WAGES, properly EQUIPPED and given access to EDUCATION and MEDICAL CARE.
    On the opposite side of the spectrum what can starbuck’s “beloved” fair trade coffee say? “We trade fair”? Well congratulations on not ripping people off.

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