The Starbucks Crisis and the Power of Social
Latest posts by Porter Plant (see all)
Today, we are continuing our series on the effect of social media on the restaurant industry by looking at the recent PR crisis affecting Starbucks and what they are doing about it. It is definitely an interesting case study in the power of social media.
Here’s what happened
In case this story is new to you, here’s a short synopsis to get you caught up. Sigh. Ok, here it is: two African-American men were arrested by police who were called by a Starbucks employee. Officials have said police officers were told the men had asked to use the store’s restroom but were denied, citing a company policy prohibiting non-paying members of the public from using the restrooms after which they refused to leave. The Starbucks employee then called the cops to have the men removed for “trespassing.” The event took place in early April at a Philadelphia Starbucks.
And then it went to Twitter…
The event was caught on video and quickly posted to Twitter by Melissa DePino. At the time of this post, Melissa’s tweet has around 13k comments, 171k retweets, and 237k likes.
On April 15th we started tracking the terms “#starbucks, @starbucks, and Starbucks” in order to follow the conversation as it develops. Since then we’ve pulled in over 2 million mentions from 1.2 million unique authors. These posts have a reach of 1,839,050,861 and an astonishing spread of 3,849,571,534. Crazy, right?
Some of the main influencers talking about Starbucks are Kevin Hart, who tweeted about the arrests to his 35 million followers and Daniel Tosh (27 million followers).
Here’s what’s happened since
In response, Starbucks has done a few things in an attempt to put out the fire. First, they terminated the employee that called the police. Second, the CEO met with Philadelphia Mayor and Police Commissioner, as well as the two men who were arrested in an effort understand the situation and work to prevent future incidents. Third, and probably most importantly, they’ve committed to closing all company-owned stores for a half day to provide “racial-bias training” to around 175,000 employees. I’ve read different estimates, but it is predicted that this half day of training will cost Starbucks anywhere from $6-16 million in lost revenue.
The Power of Social
I don’t know about you, but I find it absolutely amazing that something as simple as a single tweet from a regular person can be the catalyst behind one of the most well-known companies in the world implementing a major change in corporate policy and training. Now, I know what you’re thinking-“hey dumb dumb, it wasn’t the tweet that made them change, it was a culmination of factors and it is reductive to attribute it to that one tweet.”
And I agree with you. But…
As was the case with Chipotle, (we wrote about it a few weeks back, check it out) public awareness and the corresponding outrage were influenced by the virality of the event. Even if they wanted to, Starbucks couldn’t keep this incident to themselves. They couldn’t keep it quiet once millions of people were talking about it all over the country. And the more people are talking about something and sharing hashtags like #boycottstarbucks, the more money that company loses. When millions of people are sharing information and talking about your company it is impossible to quietly sweep things under the rug and pretend it didn’t happen. Basically, social media exacerbates the situation, turning it into a crisis.
But that’s a good thing, right? Starbucks is now aware of internal bias and is investing in a solution. The public was upset and called for change, and Starbucks is responding. Think of Chipotle’s E.coli crisis a few years back (we wrote it about it a few weeks ago, check it out). Because so many people were talking about it, Chipotle’s stock dropped and they lost major revenue. Due to social media’s influence on consumer spending habits, these major companies can no longer afford to ignore these issues or hope that people won’t find out.
The Impact of Social on the Restaurant Industry
From a customer perspective, it is (somewhat) reassuring to know that individuals have a voice and they can use that voice to enact major change. However, from a brand perspective, that’s scary as hell, isn’t it?
This is true for all businesses, but especially in an industry as popular, and ergo equally vulnerable, as the restaurant industry. The food/ beverage industry is an interesting one. I can’t think of anything people take for granted more than the availability of choices when it comes to food. We are used to having many different national chains to choose from at any given time, regardless of where we are in the country. Ironically, it is also this ubiquity that leads to its vulnerability. Because it is so common we (North America) have a shared cultural experience and expectation and when something happens outside those expectations, well, it spreads like wildfire. We tend to take problems with our food more seriously than problems with other industries because it is relatable.
For example, let’s say I have a bad experience at a Taco Bell in Utah and get food poisoning. I tweet about it to my audience (let’s pretend I have an audience) and warn them about going to Taco Bell. Well, that message will resonate with people regardless of which state they are in because Taco Bell’s are everywhere. But on the other hand, let’s say I have a bad experience at a Hilton or Marriott hotel and tweet about it. My theory is that people will pay less attention because they may not have one of those hotel chains in their area, or they may never need to stay in a hotel so my problems aren’t relatable.
At the end of the day, what I’m trying to say is that social media, for good or bad, will have greater repercussions on high profile industries (travel and food) and consequently should be a major consideration in marketing and PR departments.