Starbucks workers get a challenge: Sell most coffee beans, win iPod

Want some coffee beans with that latte?

Get ready for a major upsell at more than 7,000 company-operated Starbucks Corp. stores, thanks to a promotion being run by rejuvenated Chief Executive Howard Schultz.

Schultz is offering a free iPod touch, Apple's latest gadget, to every employee at the two stores that sell the most pounds of coffee beans during a 15-day stretch that runs to Feb. 17. The winners also will get a personal coffee seminar and taste-testing with Schultz, who will travel to the winning stores.

"It allows partners to creatively share their passion for the coffee with our customers," Valerie O'Neil, a Starbucks spokeswoman, said Monday. "And, it's fun."

O'Neil said contests are common to motivate employees in many retail chains, and Starbucks frequently has them. However, she did not know if the company had ever offered a high-end prize that retails for more than $250 each.

Starbucks last fall gave away free iTunes music downloads to customers as part of its growing partnership with Apple Inc.

The employee contest is valid only for those in company-operated stores. Starbucks has an additional 4,000 or so licensed stores. Stores participating in the contest will be measured against average weekly sales in January, O'Neil said.

Schultz, the chairman who took over as CEO last month, also wrote an upbeat e-mail titled "What I know to be true" to all company employees on Monday.

In the memo, obtained by the Seattle P-I, Schultz promises to "lead us back to the place where we belong," but he also asks employees for their "help and support every step of the way."

"My expectations of you are high, but higher of myself," wrote Schultz, who began writing the memo at 6:30 a.m. Sunday morning over a cup of Sumatra brewed in a French press.

The memo thanks employees, who he said have sent him 2,000 e-mails in the past few weeks, for their passion and commitment to the company.

He also warns employees that there will be "cynics and critics," but he tells them: "We are in control of our destiny. Trust the coffee and trust one another."

A Starbucks spokeswoman confirmed the authenticity of the memo.

The 693-word memo is a stark contrast to the well-publicized Valentine's Day memo Schultz wrote a year ago to executives, where he lamented challenges within Starbucks and the "watering down" of the company.

Schultz last week said Starbucks, which has seen its stock price drop significantly in the past year, would slow down its U.S. growth, get rid of breakfast sandwiches and focus more on coffee.

SCHULTZ MEMO

February 4, 2008

What I Know to be True

Dear partners,

As I sit down to write this note (6:30 a.m. Sunday morning) I am enjoying a spectacular cup of Sumatra, brewed my favorite way -- in a French press. It has been three weeks since I returned to my role as ceo of the company I love. We have made much progress as we begin to transform and innovate and there is much more to come. But this is not a sprint -- it is a marathon -- it always has been. I assure you that when all is said and done, we will, as we always have, succeed at our highest potential. We will not be deterred from our course -- we are and will be a great, enduring company, known for inspiring and nurturing the human spirit.

During this time, I have heard from so many of you; in fact, I have received more than 2,000 emails. I can feel your passion and commitment to the company, to our customers and to one another. I also thank you for all your ideas and suggestions ... keep them coming. No one knows our business and our customers better than you. I have visited with you in many of your stores, as well as stopping by to see what our competitors are doing as well.

It's been just a few days since my last communications to you, but I wanted to share with you what I know to be true:

Since 1971, we have been ethically sourcing and roasting the highest quality Arabica coffee in the world, and today there is not a coffee company on earth providing higher quality coffee to their customers than we are. Period!

We are in the people business and always have been. What does that mean? It means you make the difference. You are the Starbucks brand. We succeed in the marketplace and distinguish ourselves by each and every partner embracing the values, guiding principles and culture of our company and bringing it to life one customer at a time.

Our stores have become the Third Place in our communities -- a destination where human connections happen tens of thousands of times a day. We are not in the coffee business serving people. We are in the people business serving coffee. You are the best people serving the best coffee and I am proud to be your partner. There is no other place I would rather be than with you right here, right now!

We have a renewed clarity of purpose and we are laser-focused on the customer experience. We have returned to our core to reaffirm our coffee authority and we will have some fun doing it. We are not going to embrace the status quo. Instead, we will be curious, bold and innovative in our actions and, in doing so, we will exceed the expectation of our customers.

There will be cynics and critics along the way, all of whom will have an opinion and a point of view. This is not about them or our competitors, although we must humbly respect the changing landscape and the many choices facing every consumer. We will be steadfast in our approach and in our commitment to the Starbucks Experience -- what we know to be true. However, this is about us and our customers. We are in control of our destiny. Trust the coffee and trust one another.

I will lead us back to the place where we belong, but I need your help and support every step of the way. My expectations of you are high, but higher of myself.

I want to hear from you. I want to hear about your ideas, your wins, your concerns, and how we can collectively continue to improve. Please feel free to reach out to me. I have been flooded with emails, but believe me, I am reading and responding to all of them.

As I said, I am proud to be your partner. I know this to be true.

Onward...Howard

P.S. Everything that we do, from this point on (from the most simple and basic), matters. Master the fundamentals. Experience Starbucks.