Dave Morin

How do you inspire customer loyalty? How do you compete with one of the largest and most recognized brands on earth?

I’m sitting in a small coffee shop on Chestnut Street in San Francisco. It’s packed. It has wireless. I’ve walked by various times on my way home, but neglected to stop in. Then I began noticing the number of people inside with glowing laptop screens each night. This intrigued me. Why so many? Why is Starbucks empty…one block away?

My first guess. Free wireless. It had to be. So, I made it my mission to check it out today. I walked in tonight, the place is packed full. Glowing laptop screens everywhere, half of which have a glowing Apple on the back. Bonus. As I stood ordering a mocha, I noticed the little blue cards detailing the pricing plan for internet. Theory spoiled.

Then I began to notice the things that make this place great. They have an amazing atmosphere, almost like a rugged mountain ski chalet. They even have an old chairlift hanging from the ceiling around one of the many coffee tables (instant Dave customer loyalty). They play great, classic music. They have a ridiculous menu of great food, salads, and soups (even breakfast). The serve wine, and even beer on tap!

Still, I wonder, how do they beat Starbucks? The loyalty for Starbucks in this city is some of the strongest I have seen. Just up the street at the Union Street Starbucks, you can barely get a seat at any given time in the day.

Then I get the coffee. Rich, decadent, whip cream topped, AMAZING coffee. But that’s not even the half of it…it’s served in a jumbo, bowl-like, coffee mug…on a plate. Perfect presentation and the perfect differentiation from the cardboard, we-love-you-but-get-out-of-my-coffee-shop style of our beloved Starbucks.

Don’t get me wrong, I love Starbucks coffee just as much as all of you. They somehow come through with some of the best tasting coffee on a scary consistent basis. But, I’m also from Montana, and I’m all for the “local joint” doing as well as the big guy.

So how do you grab the small SF Marina market by the horns and keep it steered in your direction? Provide a wireless service plan that’s 10 bucks cheaper a month than the big competitor, give us a great atmosphere and big giant cups of coffee that scream “STAY HERE FOR AWHILE, ENJOY YOURSELF.”

You can bet I’m listening.

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“What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”

- Adam Smith – The Wealth of Nations

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Popularity: 3% [?]

Kryptonite made a fatal mistake which may now cost them their brand, as I talked about in the previous post. They have spent years building their brand. A brand which represented the most secure, solid, and uncomparable bike locks on the market. They invested not only years but millions of dollars making sure that this brand was the standard in the largest, most theive ridden markets on earth.

Last week you witnessed, in one fell swoop, what Norberg and I call “reverse viral marketing”. In this case it will lead to almost complete brand destruction. It’s the worst kind of marketing that can happen to your business or product. By overlooking the most simple part of their product, the actual lock itself, Kryptonite has given way to all of its competitors to happily eat up its market share.

As customers gain word through blogs, news media, and most importantly, peer-to-peer through their friends; they will no longer walk into bike shops and see Kryptonite as protecting their valued investment. They will instead favor the locks of their competitors. A sad day for Kryptonite, and a hard lesson learned. Do you pay close enough attention to every facet of your product or service? How important are these details to your brand? Remember: details and design do matter, don’t cut corners, it will save a major headache down the road.

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Own a bike? Use a Kryptonite lock? One of my fellow San Franciscans last week blew the cover on a very disturbing piece of information regarding the locking mechanism on everyone’s favorite bike locks. You can open them with a Bic pen.

The rate of speed this information is cascading through the bike population and soon the general population is increasing fastly and should be interesting to watch as it hits the The Tipping Point.

It is too bad that such a trivial thing could potentially take out a good company. But, it is a lesson to be learned in the importance of good design and ensuring that every detail has been discovered. In this case I think it also seems prudent to point out the importance of having constant open lines of communication with your customer. You don’t want the news to be the first ones to communicate such an important problem. Your customers will leave you. For good.

Popularity: 2% [?]