What does brand equity get you? Among other things – happy neighbors! According to recent reports, when a Starbucks opens nearby your property values rise – alot. Before you think this phenomena occurs anytime a multi-national company opens its doors in your vicinity, the research also shows that its better to have Starbucks than Dunkin Donuts.
So first to the details and then to the relevance for all of us who own or strive to improve the businesses with which we work. In their new book Zillow Talk, the chief economist Stan Humphries and CEO Spencer Rascoff at Zillow report that if you live within a quarter-mile of Starbucks your property value could nearly double.
Here are the numbers, according to the Zillow data from the last 17 years, homes near a Starbucks increased in value by 96% those farther than a quarter mile from a Starbucks increased 65%. Rascoff and Humpries further note, “these properties appreciate at a faster rate than US housing on the whole. Interestingly, they’re also recovering much more quickly from the housing bust.”
All is not lost if you live near a Dunkin Donuts location, it’s just that homes near Starbucks appreciated 16% more. While real estate analysts can talk about the impact of Starbucks on gentrification or that Starbucks has more west coast locations than Dunkin Donuts, those debates are beyond my scope.
My message is that great businesses lift up entire communities.
Rather than selling the notion that profit is the “be all end all of business,” we should be reminded that we have an opportunity to drive the enterprise value of our companies. That value goes beyond the profit and loss statement. It is reflected in the way in which we affect the lives of all we serve.
If we drive great value, that value will be extended richly into our surrounding community. What will you do to drive enterprise and community value today? Let’s think purpose not profits…profits emerge from purposeful activity!