A couple of weeks ago, Starbucks gave some of their employees in the Southeast a special email coupon for a free iced coffee, good from August 23 through September 30th. Starbucks instructed their employees to share the email coupon with 'friends and family'.
In a move that everyone except Starbucks saw coming, the email coupon quickly spread far and wide. So far and so wide, that Starbucks decided to kill the promotion last week.
Obviously, Starbucks quickly realized that the promotion was spreading much further than they anticipated, and believed that honoring the coupon would result in giving out far more iced coffees than Starbucks had budgetted. How they didn't see this coming a mile off is another question. But in deciding how much honoring this promotion would cost them, I have to wonder if Starbucks considered how their NOT honoring the promotion would affect business?
Customer evangelists for Starbucks will likely 'forgive and forget' when they try to redeem this coupon and are turned away, but new or infrequent customers of the coffee chain will be much less forgiving. In fact, this move will literally empower these rebuked customers to market AGAINST Starbucks. How many people's first experience with Starbucks will be walking into a store with a smile on their face and a coupon for a free coffee in hand, and then being told that the store won't honor the coupon? How many of these people will be mad, mad enough to tell others about the experience? Exactly. I'm not sure what's more unbelievable, that Starbucks couldn't see that the original email would spread like wildfire, or that they couldn't see that news of their NOT honoring the email coupon, would also spread like wildfire.
But the news did spread far and wide, reaching the offices of competitor Caribou Coffee. CC has announced that they will honor the email coupons, from noon until 8PM, this Friday. Yikes. Now even those customer evangelists that might be inclined to overlook Starbucks' snafu, have no reason not to try out one of their competitors.
So the moral for Starbucks and other companies is, you have to not only consider the business cost of not keeping your word, but the ramifications that could arise if a competitor honors the promise that your company would not.