Howard Schultz: How Twitter and Facebook are saving Starbucks money

Starbucks just turned in a record quarter, posting $3.4 billion in revenue and the highest quarterly earnings in the company’s history. And how did the ever-expanding coffee company do that amid what CEO Howard Schultz termed a “seismic change” in consumer behavior following the “cataclysmic” recession?

Well, having 40 million fans on Facebook and two million followers on Twitter didn’t hurt. In remarks today on the conference call with analysts, Schultz pointed to the success of the company’s social media efforts as a cost-effective way of engaging with customers.

“There probably (aren’t) very many companies in America that have created the capability and the discipline that we have with almost 40 million worldwide fans on Facebook, a leading company on Twitter and Foursquare,” he said. “And what that has done, it has given us the ability to lower our cost of customer acquisition in terms of traditional advertising and build a more enduring, emotional relationship with our customers.”

In other words, the company is going direct to the customer base with its message.

Starbucks puts a heavy focus on social media, highlighted by the fact that it tapped a 29-year-old social media whiz as its latest board member last month

Schultz also pointed specifically to the company’s strides in mobile payments.

“Starbucks today, and this is an important point, we are the number one company, not in the U.S., but in the world, in terms of mobile payments in  transactions and dollars,” he said. “All of this is wrapped into the relevancy of the Starbucks’ brand and the experience and this is what is driving much of the incrementality that we are experiencing.”

Last month, Starbucks released figures showing that it had processed some 26 million mobile transactions since launching its mobile payment service in January.

Added Schultz:

“The macro issues that are facing many companies, we’ve been able to turn into a competitive advantage in terms of value, social and digital media and mobile payments.”

  • Mithuntd

    Starbucks is one of the ONLY FEW companies which gets Social Media and does it right! They understand that Marketing is a two way street – Listen AND Respond.

    • johnhcook

      It is pretty impressive the level of interaction that Starbucks has on their social media channels. I am curious how many folks they have just managing those accounts. 

  • Aarika

    Starbucks and Virgin Airlines both do very well on the social marketing aspect. Virgin always responds whether via twitter or facebook and actually invetigates every single question and is very effective at getting the customer the answer as quickly as possible.

  • guest

    Could we please stop using hyperbole like “29-year old social media whiz”?  Seems like the media is constantly inflating people all the time…and stop using Harvard, Stanford, etc. every which place… its kinda unnecessary…not blaming GeekWire explicitly but outlets in general…Let’s focus on the actions and not the personality that is being aggrandized…