"Starbucking" Your Business
By Bryan Rader, MediaWorks

Several years ago, Starbucks was very much an "analog" coffee business. When they opened their earlier stores in Seattle over twenty-five years, they sold premium coffee using the best beans from around the world. Yet, they had a fairly limited menu of coffees available to its patrons.

Sure, you could order a cappuccino or espresso. But the common customer was either selecting today's special of "regular" or "decaf" coffee on their way to work. Starbuck's appealed to the diehard coffee drinker, but offered nothing else for the rest of consumers.

As I said, they were running an "analog" business, which reminds me very much of the way we have historically operated in the private cable business. We had one primary product, a solid analog full-basic line-up, and then offered two or three options (like cappuccino or espresso), which in our case was HBO or Showtime.

Most of us ran our business that way for many years. But Starbuck's has changed, and it's been an interesting ride for this small coffee chain that now has secured its place as a worldwide success story.

What lesson can a private operator learn from Starbucks, you may ask? The last thing I need is more caffeine, you're probably thinking. This business keeps me up late at night as it is. Or, are you going to ask me to start referring to my service techs as "baristas" who serve up good picture quality like fine coffee? No, not that extreme.

Starbuck's is a great example of a company who was faced with the task of converting a single product that was traditionally purchased at one time of the day, into a multi-faceted retailer that offered different beverages for every member of the family. Their product line meets the needs of its patrons at all times of the day now (not just early morning), and throughout the year, (not just in colder months).

And, Starbucks is not an analog business anymore. They offer Frappucinos, which are frozen coffee drinks (great in the afternoon or on a hot day). They offer tazoberry (which is a fruity, sweet drink ideal for kids). And they offer teas (which satisfies the non-coffee drinker). Plus, they have a selection of pastries, bagels, muffins, and cakes that compliment any of their beverages.

Their product line is now as diverse as their customer base. And, it's a very good recipe for private operators to follow in this competitive environment. A variety of products, but still very focused.

To satisfy our ever-changing customer base, we have to expand our product and service offering. This means including a scaled-down local access package for the DBS user. It means adding a Spanish-channel tier with six or eight Spanish stations including Cartoon en Espanol, and Univision. It means offering digital music options. It also means having premium packs for family movies, classic movies, and contemporary movies to appeal to every demographic group.

Each one of these new products will satisfy some part of our market, and will give us "something for everyone," just as Starbuck's has a drink for all occasions. No longer can operators live on just a single product line of analog basic, with the hope of upselling half our subs to one or two premium services.

I recently took my three-year old son to soccer practice one evening after work. After 45 minutes of scoring goals (and chasing butterflies), he asked me if we could stop at Starbucks on the way home for a treat. "You don't want ice cream?" I asked. "A slurpee? A chocolate chip cookie?" But my son said "nope dad...I want to go to Starbucks."

Now that company has their hooks into my family. "Something for everyone."

A good lesson for private broadband operators: A new broadband product line full of "something for everyone."