The Creative Negotiator

Creative negotiating is a quest for mutual-gain synergies—to match your assets to the other party’s needs, and vice versa. It takes more than a collaborative mindset; it’s an act of imagination. Creative negotiators unlock hidden opportunities to capture more total value in the deal. 

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Starbucks and United Airlines

The Start Point

Some years ago, a United Airlines passenger survey made one point very clear: Airplane coffee was horrible. The survey caught the eye of a sales executive at Starbucks, then a medium-sized company with about six hundred stores and no international presence. Looking to raise its profile, Starbucks asked United to go where no airline had gone before—to serve first-class coffee at 35,000 feet. United was seeking ways to enhance their customer service and separate themselves from Delta and American. They were game.

Opportunity and Obstacles

For Starbucks, the potential reward was tremendous. United flew 2,200 flights a day and ranked as the largest U.S. carrier to Europe and Asia. At least one of four passengers asked for coffee, a market of 20 million people per year. Many would be trying Starbucks for the first time.

But there was also huge downside risk. The Starbucks brand was all about quality control, and many inside the company doubted that an airline could deliver a consistent cup of great coffee. The taste of water varied from city to city. The planes’ brewing equipment was uneven, and busy flight attendants might leave the pot sitting longer than 20 minutes, the maximum allowed at Starbucks shops. What if people’s first impression of their coffee was awful?

Then there was the issue of pricing. Starbucks cost more than twice as much as Brand X. United asked them to do better—a lot better. Starbucks gave them a number, and United responded: “Holy cow, if we paid that much, it would blow our whole cost structure! Here’s our budget for coffee.”

And Starbucks said: “My god, we can’t sell at that price—we’d lose money on every cup!”

It’s at this point that negotiations typically break down. Each side tells itself, “Good idea, but the gap is too wide.” Conventional price bargaining hits a wall. The deal dies. 

The Creative Solution

But creative negotiators don’t give up so easily. As Starbucks CEO Howard Schultz noted in Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, United “wouldn’t take no for an answer.” They put themselves in Starbucks’ shoes and considered, “What do these guys really need?”

United broke the impasse by asking Starbucks to divert half their modest advertising budget to mark down the cost of their inflight coffee. In return, United would feature them in the airline’s print, radio, and TV ads—massive, national exposure that Starbucks couldn’t dream of affording at the time. Plus: Every trolley rolling down the aisle of every plane would be piled with cups with the Starbucks logo. 

In turn, Starbucks asked to train every United flight attendant on how to brew their coffee. They devised a quality assurance program to ensure optimal “dosage,” grind, and water filtration for each pot. And they developed a computerized manufacturing system to improve their efficiency by one-third, which would help pay for the hefty discount to United.

By that point, the deal had broadened far beyond what either side envisioned at the start.

The Outcome

Less than a year after the survey, a fresh United ad campaign rolled out on the back covers of BusinessWeek, Time, and U.S. News & World Report. It featured a Styrofoam cup with the Starbucks logo, over the tagline: “We’re about to give airplane coffee a good name.” And at the bottom of the page: “United is now serving Starbucks coffee on every flight worldwide.”

Three months later, 71 percent of United passengers rated their coffee as good or excellent. Fourteen percent said they’d tasted Starbucks for the first time.

And four years after that, Starbucks had more than 3,000 stores and was added to the S&P 500. It had penetrated Tokyo, Beijing, Seoul, and Hong Kong—all centers of tea-drinking cultures that just happened to be served by United. Today, the company’s fastest-growing market is the Far East. Here’s a trivia question: What city has the most Starbucks stores? Answer: Shanghai. 

Starbucks’ runaway success owes to many factors. The company capitalized on other strategic partnerships—with Barnes and Noble, Pepsico, Kraft, and Apple. But its alliance with United remains a powerful story of how a little creative negotiating can go a long, long way.


Our Mission

At Mobus Creative Negotiating, our mission is to show you how to find more profitable outcomes in deals large and small. We can help you improve your negotiation skills by gauging the other party’s pressures and needs—by turning a transaction into a strategic relationship. To learn more about our Creative Negotiating seminars, visit us at