Using Marketing to Grow Your Cafe’s Profits

marketing-1Now that we are in the New Year (the Fiscal Cliff has been averted and consumer spending still seems to be on the rise), it is a great time to plan for the rest of the year, if you haven’t already begun to do so.  Marketing your business in the coming months will be a key to maximizing your business potential in 2013.

We fully embrace the idea that the only sure way to grow your business is to increase the top line (sales).  If everything else with your business is in check, your bottom line will grow too.  All too often, we hear customers ask how to cut costs, and that is usually a red flag that all is not well.  If you are only seeking to cut your costs, you may enjoy short-term gains, but often there are consequences like, lower quality that can lead to lower sales.  Instead, if you seek out ways to grow the top line, many of the woes that come with a small or negative bottom line will disappear.

We have found that most store marketing and promotions goals are ultimately designed to:  convince your customers to visit more often, sell them more stuff and get new customers in the door.  We refer to these as “Frequency,” “Ticket Average” or “Average” and “Trial.”  Just remember “F.A.T.” for a FAT bottom line. We believe these goals are important to any specialty coffee shop regardless of their size, location or years in business and are a central part of building a successful and sustainable specialty coffee operation.

Nearly every business ever invented has needed to market itself in one way or another, and in our industry, the best type of marketing is done locally, in person and by the owner/operator.  We call this Local Store Marketing or Neighborhood Marketing.  LSM quite simply means you market to nearby businesses, neighborhoods, schools, offices etc.  It also includes marketing within your own store. As with all business tactics, good marketing begins with strategy… the marketing plan.

Before you can begin to develop a marketing plan, it helps to know who your target audience is.  We have developed a guide to help you, called the Marketing Area Profile or MAP.  This is the first big step in working to increase your sales, average ticket and profitability.  The premise behind the MAP is to help you build upon your core strengths using the area surrounding your store, which offers the greatest opportunities for building and sustaining your business.  While it might seem detailed, we believe it’s critical to help document your current situation, competition and areas for growth. You may also discover that these questions will help you think about marketing opportunities you may have underutilized in the past. Understanding your specific circumstances and customers should help you to position them as strengths. Once you know your strengths, you can leverage them as effective marketing messages to build sales!

Having operated coffee shops ourselves, we understand that sometimes the thought process of building these programs can seem overwhelming. Remember that no successful excursion starts without a great MAP. We start there and then we can help you to break the process down into smaller, more attainable goals and targets that can be sustained over a long period of time. To request your Marketing Area Profile, please call your Customer Care Associate at (800) 835-5943 and let them know you want the road MAP to success!

Read more with Using Marketing to Grow Your Cafe’s Profits in 2013 Part 2 and Part 3!

Written by: Thom Swain – Business Development Representative

Google Acquires “Punchd”: Customer Loyalty Programs & Technology Join Forces

Customer loyalty programs have always been a catch twenty-two for small business owners. On one hand, customer loyalty programs can increase the frequency of visits a customer may make, build customer satisfaction and these programs usually don’t cost a lot. Conversely, customers will inevitably find a way to cheat the system, and loyalty programs can only offer rewards for short periods of time before they become difficult to manage. The real objective of long-term customer loyalty has always been troublesome to achieve, but customer loyalty programs and technology are on the verge of a fantastic relationship that may permanently change the face of traditional discount programs.

Before the invasion of technology, a punch-card was an efficient way of increasing customer loyalty. Customers received a unique stamp or hole-punch after each purchase that would count towards some free product; in return people would be more inclined to return on a regular basis. The overall idea works well, but it is easy for people to cheat the system or for cashiers to help their friends by giving them a few extra punches.

Eventually, grocers found a way to incorporate technology in the form of membership cards that customers could carry in return for discounts. These cards do not necessarily promote the idea of repeat visits, but the membership card model did introduce the idea that customer behavior could be monitored. Now when customers pay for their groceries, corporate offices can see exactly which items are popular and why certain customers buy the way they do. The amount of information is infinitely useful under this system, but the price for this sort of program is a deterrent for small business owners.

Now, thanks to “Punchd,” small business owners have access to a reasonably priced customer loyalty program and large amounts of information with a little more security under the medium of social media and smart phones. As of July 13, 2011, Google has officially acquired “Punchd”, a smart phone based application that replaces the old punch card idea with a digital version. Punchd software allows customers to store all of their customer loyalty cards in one place while providing valuable information to the businesses who participate. The software is relatively simple to use, and your café doesn’t need to endure a complete overhaul to employ the technology. The acquisition of Punchd is part of a much larger program entitled Google Wallet, which is likely to make a large impact on the way we do business in the future.

Punchd software even includes the ability to send out promotional messages or coupons directly to a user’s smart phone. The application also prevents users from committing fraud by incorporating location based security measures. This means that customers can only get their digital punch card checked off while standing in your café.

Other technologically-oriented customer incentives and social media platforms like Groupon, Living Social and Facebook are great ways to reach out to customers, but Punchd was developed specifically for cafés, and the marketing audience is more unique to your business and community. In effect, the people who want to know more about your café don’t have to sort through a bunch of vampire requests and event invitations to learn about the next big promotion in your store.

For more tips about how to promote your coffee shop, check out our seasonal marketing toolkit

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Reid Jackson
Stockton Graham & Co.