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

 

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

The 10 Best Ways to Market to Local Schools As A Specialty Beverage Retailer

Your local school system is an excellent target for increasing sales. The opportunities for attracting repeat business are seemingly endless. Here are a few ideas on how your coffee shop could benefit:

-After receiving the proper clearance with administrators, focus on making one visit per month to a different local school. Come armed with airpots of your house blend, coupons and bakery items to give away and head straight to the teacher’s lounge. Chat up the teachers and don’t forget to leave behind some branded mugs at the coffee pot.

Cater a meeting of the Parent Teacher Association. Many times these meetings are held too early for attendees to have had dinner and not too late for a cup of coffee. Set-up a table in a high-traffic area for parents to grab a snack and a cup of coffee as attendees are meeting and greeting. Decaf and coupons should be in order, too.

Become a book donation drop-off point and give a discount to customers for bringing in used books.

-If you happen to be lucky enough to be near a high school or university, offer to host student organization meetings with group discounts to encourage purchases.

-Younger children are always selling something for school. Why not sell retail bags of your coffee for booster clubs? All of Stockton Graham and Co.’s coffee is available in retail, 12 oz. bags, which are ideal for an undertaking such as this. If you need pricing, be sure to contact your Customer Care Associate at (800) 835-5943. Based on your needs, we can customize a solution.

-Constant discounts for teachers and administrators.

What about grabbing attention to and from school? We always encourage our Stockton Graham & Co. customers to ask, Where are my customers coming from when they visit the shop and where do they go when they leave? Chances are, a large majority of patrons will be either heading to or coming from the school. With that in mind, ask yourself, What would I want and need if I was driving the car pool van? What would the kids need?

Revamp your kids menu. Think of every child in the car pool van as a potential customer. How many sales do you lose out on when mom or dad grabs only one mocha and splits? In the morning, juice boxes and naturally decaffeinated red espresso-based drinks make for nice add-on sales. Also, push hot chocolate, slushes made with your syrup and add lots of toppings to get kids to buy with their eyes.

-Offer discounts to students (and the parents of students) who have been named to the Honor Roll.

Add a healthier grab and go food item. Many parents don’t want to sacrifice health for quick service and convenience. One awesome option is Umpqua Oats. With Umpqua Oats, your customers don’t have to sacrifice anything…and you don’t have to sacrifice speed and consistency. For additional tips on how to position oatmeal in your location, check out this previous blog entry, HERE.

Hold a school supply drive. Pass out discounts to customers who bring in binders, calculators, pencils, etc.

 

Local Cafe Marketing Area Target: Schools

Your local school system is an excellent target for increasing sales.  The opportunities for bringing in repeat customers are seemingly endless.  Here are a few ideas on how your coffee shop could benefit after summer ends:

-After receiving the proper clearance with administrators, focus on making one visit per month to a different local school. Come armed with airpots of your house blend, coupons and bakery items to give away and head straight to the teacher’s lounge. Chat up the teachers and don’t forget to leave behind some branded mugs at the coffee pot.

-Cater a meeting of the Parent Teacher Association. Many times these meetings are held too early for attendees to have had dinner and not too late for a cup of coffee. Set-up a table in a high-traffic area for parents to grab a snack and a cup of coffee as attendees are meeting and greeting. Decaf and coupons should be in order, too.

-If you happen to be lucky enough to be near a high school or university, offer to host student organization meetings with group discounts to encourage purchases.

-Younger children are always selling something for school. Why not sell retail bags of your coffee for booster clubs? All of Stockton Graham’s coffee is available in retail, 12 oz. bags, which are ideal for an undertaking such as this. If you need pricing, be sure to contact your Customer Care Associate. Based on your needs, we can customize a solution.

-Do you have many customers who are carpooling kids to school in the morning or bringing them home in the afternoon? Might you need a few more kid-friendly items on your menu? That can really help with increasing sales.

For more sales targets and ideas, be sure to request a copy of our Marketing Area Profile for 2010 today and keep checking the blog!

Mike Adams
Stockton Graham & co.

Local Marketing Area Target: Apartment Complexes

One of the areas with great customer generation potential are apartment complexes and other multi-family housing including condos, senior communities, student housing, etc.

These areas are filled with an influx of new people who are searching for a third place café and meeting  place.  Apartments also have a lot of showings to potential new residents who come to look, but may not sign a lease.  The apartment managers may also have a budget for resident activities, new resident gifts, renewal gifts, etc. for which coffee shop gift cards, baskets, baked items, etc. make excellent items for them to use.

We tried to get around to the apartment complexes within a 3 mile radius at least 3 to 4 times per year to meet or touch base with the property managers and leasing agents.  We would bring coffee samples (ground for the office pot), free coffee cards on a visit to the shop, menus and other notes about our shops.

We always tried to ask if we could include a gift certificates for a nominal value (around $5.00) for each new resident,  free drink coupons for prospective residents and or we put a bug in for assisting in resident activities  such as a coffee tastings, smoothie parties, etc. You do not always have to give these things away to them, but it’s perfectly acceptable to ask how they work with new residents, returning residents, events, etc. and how you can work with their budgets.  The more promotions, including newsletter mentions, signage, etc. might help you with extending a volume discount.

Remember, if the typical coffeehouse customer visits 3 to 5 times per week, spends on average $4.00 per visit that is $12 to $20 per week or $624 to $1,040 per year of revenue!

Jeff Vojta
Stockton Graham & Co.

Have you requested your Marketing Area Profile?

A couple of weeks ago I was pleased to see the headline “Shoppers Buck Snowstorms to Push Retail Sales Higher”.  It caught me by surprise because I was preparing to see people hunkered down during the inclement winter weather battering the East Coast, so this was unexpected.  I was also curious as to where people were spending more money.  The US Department of Commerce reported that the retail sales for February 2010 in the US increased .3%.  While that does not sound like much, considering the economy as a whole and the bitterly cold and generally awful weather we experienced, this was great news.  In reviewing the numbers even more, two subcategories stood out even more: restaurants and bars, 0.9% and food and beverage stores, 1.3%.

These are pretty good signs that consumers have loosened up the wallets a bit and are getting back out to restaurants and other dining places, including cafes.

During the past few months we have many customers ask how to position themselves for growth.   Our customers hunkered down during the economic crisis, cut costs as far as they could and operated as frugally as possible.  Now, the only way to increase the bottom line is to increase the top line, which demands more customers and more sales.

Spring is nearly upon us and now is the time to sow the seeds of future success.  We would like to do our part to help our customers in these endeavors.

In our experience from operating our own coffee houses to working with our customers, three broad areas come to mind to help increase the top and bottom-lines.  These include:

increase the number of customers,

boost the frequency of customer visits,

• and add to the average customer transaction.

Increasing the number of customers is the most obvious way to achieve increased sales, but it becomes easy to overlook strategies to increase the number of times your customers visit your store as well as increase the amount they buy each time they visit.  Increasing every 5th customer to come in one more time is a 20% increase in sales.  If your average transaction gross volume is $5.00 and average gross profit is $3.00, then increasing the gross profit contribution by even .50¢  increases your overall profits by 17%!

Lots of small improvements in each transaction and with each customer can have a tremendous impact on your success.

To help aggregate many of the best ideas we have heard from our customers, our vendors and our own experiences, we wanted to develop tools to help our customers grow and build their businesses in incremental, sustainable fashions, building upon their unique assets and strengths of being an independent, locally-owned coffeeshop!

We are pleased to present the Stockton Graham & Co. Marketing Area Profile (MAP) planning guide for 2010. It is a big first step in working to increase your sales, average ticket and profitability.  After completing your MAP, we have developed a 2010 Seasonal Marketing Kit to send to you.

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.

Understanding your specific circumstances and customers should help you to position them as strengths.

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! Also, stay tuned to our blog for updates regarding the MAP and various sales targets!

Jeff Vojta
Stockton Graham & Co.