Growing the Business: Coffee House Blues
Posted by Becky Carroll on June 10, 2007
Today is the official launch of BrandingWire. BrandingWire is a group of 12 bloggers who will take on one business challenge per month. Each of us will post our view of the challenge on our own blogs with a link back to the main BrandingWire page. There is also a BrandingWire Pageflakes portal where you can see all 12 participant blogs in one view. For the first month, we are using a fictitious company as a case study. If you are or know of a company that would like BrandingWire to tackle a challenge, let one of us know. Your idea may get chosen for a future BrandingWire feature!
(Photo credit: pietus)
Situation summary: ABC Coffee Company (fictitious) is a small coffee company with a few retail stores. They have been in business for about eight years and are reasonably profitable. They do not carry any debt; all operations are funded from a steady cash flow. They roast their own beans on-site, and they are very strong locally. There is little to no recognition of their brand outside of their geographic area.
Family-run, the company has a basic brand name and tagline (ABC Coffee Company: Great coffee at great prices!). Their logo is also very basic. The family wants to grow their business, but they are not sure of the most profitable path. Competition is increasing: Starbucks is close by, Caribou is moving in, even McDonald’s is upscaling their coffee offerings.
Challenge: What should be ABC Coffee Company’s strategy for growth?
My take: Since they are local, their success so far has been most likely due to their loyal customers. People will be the key differentiator for ABC Coffee Company as they move forward, and a focus on their customers will enable them to grow. The goals would be as follows:
Keep and grow existing customers = organic growth
Use knowledge from existing customers to gather in new customers = new growth
Step One: Talk to ABC Coffee Company customers. This can be done through ABC Coffee Company employees as well as through surveys. Here are some key questions to ask customers to help ABC Coffee learn about customer preferences and needs, in addition to learning about the customer experience:
- What do you like best about ABC Coffee Company? (Let’s build on the good things.)
- How often do you come in? How far do you drive/walk to get here? (Do a lot of customers come from farther away, perhaps across town? Let’s see if it would make sense to have another outpost closer to other customers.)
- Do you get your coffee “to-go”, or do you enjoy it on-site? (How can we make life easier for our customers?)
- What do you dislike about ABC Coffee Company? If you could change just one thing, what would it be? (Let’s find the dissatisfiers.)
ABC Coffee Company can also learn about their customers by observing behaviors. When ABC Coffee understands why customers come to their retail stores, they can begin to improve the customer experience. This will help differentiate them from competitors, as they can use what they learn about customers and their needs to help make ABC Coffee Company the preferred place for customers to buy and drink their coffee.
Step Two: Fix the dissatisfiers.
What did ABC Coffee Company’s customers tell them they wanted to change? What did they dislike? Choose those dissatisfiers that can have the greatest impact on the customer experience and fix them. This may not seem like the sexiest strategy, but if the customer experience is not a good one, all the great marketing in the world may not make any difference!
This step helps meet the goal of keeping existing customers, as well as converting new customers that come in the door.
Step Three: Look at the customer experience for different customer groups
Different customers will have different needs. Depending on what has been learned in the First Step (above), we want to think about how ABC Coffee Company might improve the current customer experience for different customer groups. Here are some suggestions that will not only improve the experience for two of these groupings but could also encourage positive word of mouth to their friends.
Group 1: Business people
If ABC Coffee Company has a number of customers that meet and/or work at their retail stores (sometimes in lieu of being at an office!), one way to improve the customer experience is to ensure there are plenty of power outlets to plug in computers. Providing free wireless Internet access may also be a differentiator to some (for example, Starbucks charges for theirs). Additionally, ABC Coffee could provide branded coffee travel mugs to regular customers, especially business customers, and encourage them to take them to work to use. This helps the environment (fewer paper/styrofoam cups used at the office) as well as advertises ABC Coffee Company to other co-workers.
Group 2: Moms of pre-schoolers
If ABC Coffee Company has groups of moms that bring their babies and toddlers to the retail store to meet with other young moms, there are a number of ways to improve this customer experience. Let’s start in the bathroom! Most coffee retail establishments are missing something in their bathroom which is critical to this customer grouping: baby changing tables. Offering kid-friendly menu items, such as juice and animal crackers, as well as hot drinks at a kid-friendly temperature, could go a long way to giving these still-young future customers something to occupy themselves while their moms take a break and visit with each other. The word should spread fairly quickly to other moms that ABC Coffee Company is a great place to take their little ones!
This step helps meet the goal of increasing business from existing customers.
Step Four: Find other ways to build on relationships.
- ABC Coffee Company should get to know their customers well and treat them like good friends. This local, friendly attitude will continue to draw a local following that could spill over to positive word of mouth and bring in new customers. Hold a party for customers to thank them, offering samples of coffees and treats as well as music and door prizes. Encourage customers to bring their friends, and hand out 2-for-1 certificates for a future purchase.
- Reach out to the local community. Look for places where existing customers are already involved (soccer leagues, business associations). For example, many soccer leagues have 8 AM games on Saturday mornings. Perhaps ABC Coffee Company could provide a coffee station at the fields for those parents who didn’t have time to grab their eye-opening cup of joe on their way to the game. Offer coupons for parents to come back and order the “coffee box”, which is a large amount of coffee in a portable container. Same could be done for baseball games, swim meets, or cricket matches! (Tea, anyone?) Sponsor local teams for youth sports (especially for those teams of loyal customers). If there is space at the retail store, offer a community meeting room. These ideas build on existing customer relationships as they get them to not only tell their friends but also to show them the great coffee off-premises.
This step helps meet the goal of both growing existing customers as well as bringing in new customers, using existing customers as “citizen marketers”.
ABC Coffee Company has a bright future. They are profitable, they are well-known locally, and they have a group of loyal customers from which to build. By taking some time to understand the needs of their best customers, as well as how they can improve their customer experience, they have the foundation necessary to keep and grow existing customers as well as bring in new customers via word of mouth and customer advocacy.
Do you know a coffee company like ABC? Do you have other ideas for ways they could grow their business through customers? Leave me your ideas in a comment!
Also, be sure to check out the other BrandingWire posts on this case study to see how the rest of the pundits tackled areas such as PR, marketing, and SEO.
Get more high-voltage ideas at BrandingWire.com! The posse is as follows:
- Olivier Blanchard
Steve Woodruff (our Sheriff and chief pundit – thank you for coordinating, Steve!)
- (Photo credit: pietus)