Using Marketing to Grow Your Cafe’s Profits! (Part 3)

Map-photoIn Part 1 and Part 2 of “Using Marketing to Grow Your Cafe’s Profits in 2013!” we have discussed the importance of preparing to market your store in your own neighboring area to achieve more sales. In part 3 we are going to discuss F.A.T. and how it will help your business grow. By focusing on more Frequent visits from customers, increasing ticket Averages and attracting new customers to Try you out, you can achieve remarkable, compounding growth in your business. That is, focus your efforts and resources on the most overlooked aspect of the Pyramid of Profitability– Promotion.

By now, you have completed your Marketing Area Profile (MAP), your store has been spruced up, your staff look the part and you are aware of your customer’s needs. You are compiling an action plan to FAT-ten your bottom line. Let’s tackle each aspect of F.A.T. with some examples of how to achieve real, sustainable sales and profit growth.

Frequency of Visit:
How often do you see your most loyal customers? Four or five times a week, right?  How about customers that you know, but you do not see every day?  Chances are they still drink coffee every day, just not with you. How do you convince them to come to you every day, and what would that really mean to your sales volume?  One of the easiest ways is to offer incentives such as loyalty rewards or bounce-back offers. The most common loyalty reward is the “Buy 10” card.  After ten drinks your customer earns a free beverage of their choice, and who doesn’t like free stuff?  How about an over-achiever’s card?  This card only has to have 4 punches, but the catch is, the customer must come back Monday, Tuesday, Wednesday AND Thursday to receive a free beverage on Friday. Another way to get folks in more often is bounce back coupons for a different part of the day.  For instance, hand out coupons in the morning valid from noon to close on iced beverages, lunch items, dinner-time options etc…

If you convince just one customer a day to visit one more time per week, your sales could increase by over $30,000 per year.

Ticket Average:
This is perhaps the easiest of the all the ways to grow your top line sales. People who are already handing you money are the easiest to convince to spend more.  Remember, “Would you like fries with that?” We are often afraid to ask our customers if they would like something else, we allow our staff to get into churn and burn mode, when really, our customers might actually have wanted a muffin, a granola bar, a cup of oatmeal or a bottle of water. If we instead spend an extra 2 seconds to make sure our customers are completely satisfied, the result could be surprising. Here are some techniques to help increase ticket averages: do not assume the smallest size, if a customer doesn’t specify, ask if they would like the large size.  Did you just bake some cookies, make sure they know these are still hot and gooey.  Offer combos, “Did you know you could get your coffee for just $1 if you buy a muffin too?”  Look for clues that will help you anticipate future needs. For example: if a customer that stops by while out on a bike ride, make sure to remind them that you sell bottled water or other forms of hydration to take with them.

If you can add just 25 cents to your ticket average, your sales would increase $25 per day for every 100 customers you have, or nearly $20,000 per year for the average café.

Trial (New Customers):
Getting a new customer through your door is the holy grail of marketing for a coffee shop.  A large portion of your marketing efforts should be focused on gaining new customers, and building your customer count.  The best opportunity is right out your front door.  Focus on people that live, work and play very close to your shop.  Consult your MAP to see where you can find these people. When you find them, your aim is to get them to try your products. The easiest way is to give it away (again, everyone loves free stuff). If you’re truly prepared with great products and great service, chances are you’ll have a new fan. Win them over with a better experience and they will come back, and who knows, they might bring others with them next time.  Always have coupons or VIP cards with you, these can be handed out at your discretion to potential customers wherever you happen to be. You and your staff should always be on the lookout for new faces, and make sure these people feel extra special the first time they come in. You may only get one chance to impress them!

Each customer can be worth $1000 or more per year, so if you can convince a new potential fan to break their routine and try you out, you have a golden opportunity to grow. Just add one new loyal customer a week and BOOM, you could see your sales grow by another $52,000 in the first year.

By setting very small attainable goals: one new customer a week, increasing visits from current customers by one a day and adding just 25 cents to your ticket average, you could see your sales increase by $80,000 or more in the first year, adding upwards of $50,000 to $60,000 to your bottom line. The amazing part is that it doesn’t stop there. If you continue on this track, your store will be as busy as you imagined, your customers will do the marketing for you, and all the small stuff you used to sweat to save a buck will be a distant memory.

To request your Marketing Area Profile, or learn more about marketing for your area, please call your Customer Care Associate at (800) 835-5943.

This blog series focuses on Promotion or marketing, one of the 5 fundamentals of our Pyramid of Profitability.

Written by: Thom Swain – Business Development Representative