full price for first cup, half off or even free sometimes for the next cup!...WHY?!

this has been on my mind for several years, so i'm just going to air it and see where everyone stands.  i'm assuming (uh-oh!) that fellow coffee shopkeeps/baristas/etc. will side with me, and that's cool.  if you don't, (not cool), but, i'd really like to understand the reasoning behind it!

the deal is:  at my location, the first cup of coffee is $2.25.  the second cup is $2.25. the third cup is, yep, $2.25.  every once in a blue moon a customer will grumble somewhat, and i know that they are thinking that at some shops you pay full price for the first cup, and sometimes the second cup is either half-priced, or, sometimes free!  (wow, i'm heading over to that shop as soon as i type this out!, right?!).

but, i'm here to tell you that when i did my christmas shopping last year, not one of the merchants i shopped with offered me a shirt, or jacket, or even a pair of socks reduced by 50% off.  and free?!...yeah, right.

to me, the whole concept spells out something like this: trouble.  i say that because, if you can legitimately charge full price for your cup of quality coffee, then how do you justify to yourself that your coffee is worth that full price if you are knocking off 50% for the next cup, or giving away that next cup?  in my mind, a customer can't help but ask themselves if that first cup is truly worth the $2.25 (or whatever).

the only exception i might see is if your shop is (possibly) trying to move product that has had less than lackluster sales.  or, if you are intentionally having a special, or a promotion, etc.

i think that those shops that do offer discounted drinks, or free refills, are doing a dis-service to the legit shops that are offering a quality product at a fair and justifiable price, no?

and don't get me wrong, i work events whereby customers are often passing by my window all day long and sometimes into the evening hours.  its not uncommon for one to buy 4,5,6 drinks throughout the course of the day...i'm not opposed to "treating" a customer at my descretion...as a way of saying thank-you.

but, next time i go car shopping, i'm going to see if the dealer offers me a 50% off deal if i buy a 2nd beamer within the hour!  maybe they'll just give me the next one free!

 

i'm really looking forward to your feedback!

(and, best of everything to everyone here in '11!)

 

sage

the coffee hound

laurel fork, va.

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Replies to This Discussion

Sage,
It's funny, it seems as if everyone has been a whole foodie at some point or another. =)
I think allegro is great since they have such a large range of roast styles. I don't quite understand how anyone can enjoy the extra dark French, but they are smart for being able to attract a wide customer base. I love their costa rican though, one of my favorites! It's inspring to hear you have your own coffee business going. I'm currently the coffee buyer at my store and am just dying to do my own thing one day. Have a lovely day!
Sheli

thanks, having a good day...kind of in limbo this time of year...our business is in its annual slow season--we are set up at equestrian venues and this is just their slow time of year.  trying to get a 3rd location at another horse park up and running...dealing with health and water/drainage issues at the moment...kind of frustrating, kind of testing our patience, etc.  i think one of my fav allegro single origin was the ethiopian yerga.  and, definitely, i was a huge fan of anything from indonesia.  i have had some absolutely fantastic espresso pulls with the indo stuff...wow!
good luck if you decide to do your own coffee venture sometime!  i have my formed opinions about mobile vs permanent spots, and am open to sharing those experiences/opinions.  you are in the oakland area?

 

oh...latte art?!  self-taught, or taught on location, or from a school?  i would love to learn it...can it be taught via text or email or here on bx messaging?!

 

be well,

 

sage

the coffee hound
Sheli maciel said:

Sage,
It's funny, it seems as if everyone has been a whole foodie at some point or another. =)
I think allegro is great since they have such a large range of roast styles. I don't quite understand how anyone can enjoy the extra dark French, but they are smart for being able to attract a wide customer base. I love their costa rican though, one of my favorites! It's inspring to hear you have your own coffee business going. I'm currently the coffee buyer at my store and am just dying to do my own thing one day. Have a lovely day!
Sheli
I am in the oakland area. I would probably want to set up shop somewhere around here. Near CAL or another school would be ideal though, lots of foot traffic whether it be mobile or permanent. I would love to hear your thoughts on both set ups.

Surprisingly self taught with the latte art. I have watched almost every you tube video which definitely helped. I have managed to train a couple of people at work to make a heart! I'd say practicing is key, but it is less foam than I originally thought i would need to make for latte art. I'm only making microfoam from when the dial passes the 40 degree mark and i submerge the wand in further when it just passes 80 degrees. I turn the wand off when it just passes the 120 degree mark. Swirl and tap the milk pitcher until the milk is glossy and smooth. Must be glossy!!
Tilt the cup towards the milk pitcher while it's being poured and eventually you shall end with the cup upright. Start pouring in the middle of the cup, raise the milk pitcher up a couple of inches while pouring at a consistent rate still pouring in the center. Once you get to an inch or two from the top of the cup slowly start tilting your cup into the upright position and at the same time lowering your milk pitcher to the cup and lightly nudge that first "white blob" out of the pitcher with your pouring wrist. From there, its just practice getting the movement down on how to move your wrist to create those waves with the microfoam. Practice "ending" your drink at different sides of the cup. A rosetta is really just the reverse of a heart.
For me, the hardest part was figuring out how to get that initial white blob out of the milk pitcher and how to keep it coming. Keeping the milk pitcher up a little higher at first while pouring kind of helped to not have all that lovely microfoam come out right away. The waves come with a subtle motion. Watch how the milk pours out of the pitcher when you pour normally at a consistent rate. Moving your wrist too much kind of disturbs the flow of the liquid.
I'm sure you've heard this all before, but hopefully my crazy drawn out breakdown of it helps! =)
I shall try to make a video one of these days at work. I added you as a friend, sorry for hijacking your thread, it wouldn't let me send this as a message until you accepted.

Sheli
I love your way of doing it too Sheli, very smart ... especially when you toss a lot to upkeep quality. A discount for bringing your own cup is awesome, we've done that at most places I've worked ... being green before it was cool heehee ;-)

Sheli maciel said:
I work at an allegro coffee bar in a whole foods market. We brew larger amounts of coffee into airpots all day. We don't have as much volume as a traditional coffee shop so we offer free refills on drip coffee as long as the customer or team member keeps the same cup. We end up throwing out so much coffee every 30 mins that it just seems like the 'delightful' thing to do. We offer a 25 cent discount on all beverages when a customer brings their own cup or if they reuse their paper cup. This is the only way to receive a discounted espresso drink. Once they require a new cup, it's a whole new full priced beverage. We also have a pretty large spoilage pool that we almost never use up so this might not be a feasible for a traditional coffee shop.

Hello again Sage ... out of my curious little mind ... what restrictions do they put on your mobile cart with it being on site and near the horses? Are you in locations that the horses might see you so you can't use blinking lights or a helium balloon attached to your cart?

 

I'm not saying you should do those things for marketing, just curious now what the limits are since I started thinking about it :-)


sage said:

thanks, having a good day...kind of in limbo this time of year...our business is in its annual slow season--we are set up at equestrian venues and this is just their slow time of year.  trying to get a 3rd location at another horse park up and running...dealing with health and water/drainage issues at the moment...kind of frustrating, kind of testing our patience, etc.  i think one of my fav allegro single origin was the ethiopian yerga.  and, definitely, i was a huge fan of anything from indonesia.  i have had some absolutely fantastic espresso pulls with the indo stuff...wow!
good luck if you decide to do your own coffee venture sometime!  i have my formed opinions about mobile vs permanent spots, and am open to sharing those experiences/opinions.  you are in the oakland area?

 

oh...latte art?!  self-taught, or taught on location, or from a school?  i would love to learn it...can it be taught via text or email or here on bx messaging?!

 

be well,

 

sage

the coffee hound
Sheli maciel said:

Sage,
It's funny, it seems as if everyone has been a whole foodie at some point or another. =)
I think allegro is great since they have such a large range of roast styles. I don't quite understand how anyone can enjoy the extra dark French, but they are smart for being able to attract a wide customer base. I love their costa rican though, one of my favorites! It's inspring to hear you have your own coffee business going. I'm currently the coffee buyer at my store and am just dying to do my own thing one day. Have a lovely day!
Sheli

Good point, Sheli:

we offer a medium-size price for any drink if someone uses their own cup or re-uses a paper cup.  (BTW: we only serve 3 sizes plus espresso-sized.)

Another point you make: drip waste-age.  We don't brew any drip so we don't dump it when it's old...There's no inherent waste like there can be for quality drip-brewing.

 

I guess I'm trying to say that there isn't a single solution for the dilemma of freebies but a little consciousness of the 'value' of the product and of the industry we have chosen to pay our rent and feed our kids will go a long way to elevating our industry's status overall.
Sheli maciel said:

I work at an allegro coffee bar in a whole foods market. We brew larger amounts of coffee into airpots all day. We don't have as much volume as a traditional coffee shop so we offer free refills on drip coffee as long as the customer or team member keeps the same cup. We end up throwing out so much coffee every 30 mins that it just seems like the 'delightful' thing to do. We offer a 25 cent discount on all beverages when a customer brings their own cup or if they reuse their paper cup. This is the only way to receive a discounted espresso drink. Once they require a new cup, it's a whole new full priced beverage. We also have a pretty large spoilage pool that we almost never use up so this might not be a feasible for a traditional coffee shop.

Every company has a different approach and different economics to consider.  While I don't know the specifics of Allegro's program, I caution everyone on jumping on that bandwagon.  Bear in mind that Allegro is (I believe) owned by Whole Foods and, therefore, is a rather good-sized company with locations across the nation and a large roasting operation (I've toured that facility).  Their economies of scale are vastly different than just about everyone here.

 



Sheli maciel said:

I work at an allegro coffee bar in a whole foods market. We brew larger amounts of coffee into airpots all day. We don't have as much volume as a traditional coffee shop so we offer free refills on drip coffee as long as the customer or team member keeps the same cup. We end up throwing out so much coffee every 30 mins that it just seems like the 'delightful' thing to do. We offer a 25 cent discount on all beverages when a customer brings their own cup or if they reuse their paper cup. This is the only way to receive a discounted espresso drink. Once they require a new cup, it's a whole new full priced beverage. We also have a pretty large spoilage pool that we almost never use up so this might not be a feasible for a traditional coffee shop.

chase, just to clarify...i used to do mobile, but my locations are all fixed/permanent.  no blinking lights, no flapping balloons!  lol!  the horses can and do come right up to my window...either with a rider leading them, or up on horseback.  i'm cautious not to spook any of the horses, as some of them are pretty jumpy (especially saddlebred and lots of ponies that haven't been out to a venue before!).  if a rider comes up to order, they tend to get priority service alot...even people in line will let a rider/horse cut in front of them--many are on a time schedule and trying to fit drinks/food in when they can.  when i did have my mobile unit, i had one horse with rider come up...the horse stuck his head way inside my little unit, then kind of freaked out at the sight of an authentic macchiato...pulled his head out real quick and in the process got it temporarily caught at the top of the window...thought for sure he was going to pull the whole building over!  so, to answer your question--no real limits as far as lights and stuff--but you want to use good judgement and not freak a $50,000 horse and an owner in debt up to the top of his muck-boots!

(i'm sorry to have to report: another (horse) customer of mine comes by regularly...he's not a coffee drinker, but does order the lemon-lime gatorade to quench his thirst!)

 

see ya'!,

 

sage

the coffee hound

Chase Mann said:

Hello again Sage ... out of my curious little mind ... what restrictions do they put on your mobile cart with it being on site and near the horses? Are you in locations that the horses might see you so you can't use blinking lights or a helium balloon attached to your cart?

 

I'm not saying you should do those things for marketing, just curious now what the limits are since I started thinking about it :-)


sage said:

thanks, having a good day...kind of in limbo this time of year...our business is in its annual slow season--we are set up at equestrian venues and this is just their slow time of year.  trying to get a 3rd location at another horse park up and running...dealing with health and water/drainage issues at the moment...kind of frustrating, kind of testing our patience, etc.  i think one of my fav allegro single origin was the ethiopian yerga.  and, definitely, i was a huge fan of anything from indonesia.  i have had some absolutely fantastic espresso pulls with the indo stuff...wow!
good luck if you decide to do your own coffee venture sometime!  i have my formed opinions about mobile vs permanent spots, and am open to sharing those experiences/opinions.  you are in the oakland area?

 

oh...latte art?!  self-taught, or taught on location, or from a school?  i would love to learn it...can it be taught via text or email or here on bx messaging?!

 

be well,

 

sage

the coffee hound
Sheli maciel said:

Sage,
It's funny, it seems as if everyone has been a whole foodie at some point or another. =)
I think allegro is great since they have such a large range of roast styles. I don't quite understand how anyone can enjoy the extra dark French, but they are smart for being able to attract a wide customer base. I love their costa rican though, one of my favorites! It's inspring to hear you have your own coffee business going. I'm currently the coffee buyer at my store and am just dying to do my own thing one day. Have a lovely day!
Sheli

I would love to hear more about what you said here, "3) loyalty cards are a bad idea. SCVNGR or foursquare rewards are a good idea." Thanks!

Jared Rutledge said:

1) we do airpots out of a fetco till 11am, and refills on those are fifty cents. we pick the coffee to brew, and we only brew one. after 11am, it's all hario v60's, and there are no refill discounts. i'm not going to spend four minutes brewing a pourover only to sell it for fifty cents. however, the labor for the airpot happens once and it helps me use it up within a reasonable time frame (we only brew maybe three per day), thus the refill price.

 

2) i think a MUCH better comparison for this is beer. what bar lets you get a refill of the same beer for a discount? use that analogy with your customers.

 

3) loyalty cards are a bad idea. SCVNGR or foursquare rewards are a good idea.

I am not trying to start an argument, but I have heard the principle of raising costs based on the machine or brewing process which takes away from the value of the coffee itself. For example some shops charge more for an espresso (1.5 to 2.5 oz) than a cup of drip coffee (12 oz). It is has been suggested that this may imply to the customer that the machine being used has more value than the coffee itself being brewed and consumed, which in turn takes away from the value of the coffee, the very reason we are all in business to begin with. 

So from that perspective is having such a high cost disparity from a pour over vs drip (not saying that the cost shouldn't be reflected in at least a little increase due to the labor to produce an equal cup of coffee that a drip machine is producing) implying to the customer it is more about our labor than the wonderful coffee we serve? When I see a 12 oz drip that costs $1.99 and a 12 oz pour over of the same coffee for $3.50 or more I just wonder what we are emphasizing more. What if it were $2.50 or $3 at most. Just a question. 


Jay Caragay said:

Have a look at this:

 

http://sprocoffee.com/hampden/hampdenimages/SproHampdenMenu.pdf

 

We currently offer 12 ounce brewed coffees ranging from $2.00 to $9.00 per cup.  Each cup is brewed to order, from open to close. No batch brewing. No airpots.  Ever.

 

The coffees are brewed on an open brew bar where the guest can plainly see their coffee being made in front of them.  They see the process.  They see the care. They see the work that has gone into their cup.  This justifies the price differential between other coffee places and it demonstrates why we do not offer discounted "second" cups or "unlimited refills."

 

We don't use analogies or attempt to explain why because it's plainly obvious.  Those who initially balk at some of the prices are quick to understand once they see the process.

 

Certainly, there are some people who come in looking for a faster and lower priced coffee.  In our immediate neighborhood there are a 7-Eleven, Royal Farm and another coffee shop to satisfy those needs.  We don't offer quality comparable to any of the other places and price our coffees commensurate to their value.

 

Nor do we offer "loyalty" cards, discounts, buy x get one free or similar gimmicks.  We offer quality coffee in a calm, nurturing environment. 

Too often we find that shops are selling their gravity brew coffee at prices copied from their competitors. For that matter they often do the same with products made on their espresso machines.

Interesting.

I remember reading an article in a Kodak journal many years ago where they asked labs how they calculated their E6 pricing. In the vast majority of cases no calculation was done at all. Instead, labs were simply phoning around to find out what other labs were charging. Labs who did the calculations were typically charging much higher prices and catering to serious commercial shooters. 

Some of the benefits of using a batch brewer include high reliability with modest repair costs, time efficient operation, and minimal labour costs. It stands to reason that those factors be included in the price calculation. But, yes, it will mean a vast difference in price between a gravity brew and a long black drawn from the espresso machine. 

When asked my opinion on loyalty cards and half price refills I always ask my clients how draught beer is sold at the local pub. I've yet to see loyalty cards or discount pricing in any of them. 

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