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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Fresh can be interpreted in several ways I guess. I taste all brewed coffee every 30 mins. of so and if it's good to me then it's good for my customers. If it tastes a bit off to me, then I dump it and brew another batch without question. BUT I don't just dump/brew based on time alone. Just like extracting espresso... I NEVER go by time or volume, but rather go strictly by color, flow pattern and ultimately taste to determine the cutoff point. The hell with the Italians and their dose/time/volume thing. They may have invented espresso as far as we know, but they sure as hell didn't perfect it.

 

 I should add that IMO airpot coffee can still be quite drinkable after 2-3 hrs. This can also depend on the insulative properties/cleanliness of the airpot itself. Will also add that with the amount of sweeteners, dairy products, syrups, etc. that is put into most people's drinks that drip coffee could be a day old and most would be none the wiser.

Shadow said:

Will also add that with the amount of sweeteners, dairy products, syrups, etc. that is put into most people's drinks that drip coffee could be a day old and most would be none the wiser.

 

i don't know if i agree with the rest of what you said, but TRUE THAT

Hi Sage,

 

do you do discount for bringing your own cup?

What we do at our cafe is this: 15% on drinks if you bring your own cup (any cup, mug)

If they come in to the cafe, and order a for here cup, we first charge in full, if they come back for a refill than we put on a 15% off the original price.

If they come back and ask for a new drink with no cup, than same original price.

 

See ya. 

 

 

 

 

Caty, I really like your approach. AND there will always be those that find the loopholes in a system and take advantage of it. We recently made some changes to our menu and loyalty cards to put an end to it.

 

Tommy, 15% is quite generous IMO. We keep our discount at .25 across the board which more than covers the price of a cup/lid. I do encourage our customers to bring their own cup though.

 

In our cafe we do what Tommy does -- a discount if you bring your own cup and a discount on a true refill -- into the same cup. Why should you make the customer have to pay for a cup and a lid the second time around? Also, it encourages people to reuse and bring cups, so it reduces our waste. We also do have a loyalty card --11th drink is free. We're kind of sneaky about it though -- we keep them behind the counter and you have to ask for them, so generally it's regulars (the ones who know they exist). It shows them that we appreciate their business. 

 

I also don't believe that its possible to keep coffee "fresh" in an airpot for "hours." We brew through a Fetco into the thermal dispensers, and go through a pot in about 15 minutes (we're a very busy spot). Our baristas are instructed to dump the pot every 30 minutes (usually this only happens with the last couple of pots of the day). I don't think it's better to justify half price refills by saying you're just going to dump it -- when you give things away for free, it reduces the value of your product. The only time this makes sense is if you serve sit-down food -- it encourages customers to linger and generates sales you might not make otherwise.

We offer a 12oz ceramic mug of coffee, with refill, for the same price as the small to-go.  The refill is done specifically to encourage people to get their coffee in ceramic.

 

If they are staying in-house, we want people to drink our coffee in a mug.  It smells better, tastes better, and provides a more enjoyable experience all around.  We're one of the only shops in the area that does ceramic service, and we want to make the most of that.  Sometimes hearing that "it comes with a refill" is what pushes the customer over the edge and away from the larger to-go size.

 

We price all drinks to fall within our target range for COGS.  The COGS for the small for-here with a refill is just within this range.

 

We batch-brew, by the way, so the incremental cost for the refill is not much.  We do dump our coffee when it expires, but it is a relatively small percentage. Still looking at a manual brew bar to help with this (and improve product quality too).  We would not do refills for manual brew - the incremental labor cost are prohibitive.

 

I do understand the logic behind the "no free refill" policy.  Our refill policy makes sense for us in the bigger picture, which does not include intentionally undercutting the "legit" shops by the way... from what we here, we're the most legit shop in our area.

john, thanks for contributing to the discussion. i need a goal like that...of having hundreds of daily customers, on a regular basis! i have experienced that amount of volume, at times. but my setting is different from most permanent locations on "main street", as i am set up at equestrian venues. the traffic varies according to that particular event, number of competitors, number of spectators, whether other equestrian events are being held elsewhere simultaneously, the weather condition, show delays/cancellations, etc., etc. what type of setting is your business located in?

best of luck in '11!,

sage
the coffee hound

John Berkness said:

Our prices are 12 oz 1.5 16oz 1.75 20oz 2

 

We roast almost everyday and have for many many years, Quality is not an issue, as we offer a rotating stock of 8 great microlots and great co-op coffees, along with having some good experience with direct trade coffees ( not at the moment unfortunately). By offering a great fresh product at a great price without being snobbish about it has acrued a cache of hundreds of loyal daily customers, most of whom realize and embrace the great service we are giving them. So when a customer comes in and recieves an amazing cup of Costa Rica Sipres Cidra from the Don Mayo micromill, or the Ethiopia Michelle, immediately love it to death and want another cup plus they get it for a premium price with no skin off our backs, I will sleep well knowing that no one in town is thinking "oh shit I can't get a cup of good coffee today, I'm too strapped for cash"

 

as for a calm place, no way. but we're nurturing as hell.

 


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. 

thanks for adding your thoughts, caty...i particular agree with your last line...some people will never change, right?!

 

sage

the coffee hound

Caty Rent said:

Over the course of one year, my shop has changed dramatically. We used to use urns for drip brewing, and we offered free refills for quite some time. We had a few people kind of take advantage of that, so we switched to fifty cent refills.

Now we do not offer refills because everything is done by the cup. We have several methods, and when you are taking the time to make each cup individually, it really doesn't make sense to offer any sort of refill.

Do I look down at other coffee shops that do drip coffee and offer refills? No, because coffee will always be coffee no matter the brew method. It will always be beans ground in some type of filter (paper, metal... what have you) with water. There will always be customers that come in to order "just a regular dark roast" and not care that it came from a certain farm or that the beans were dried on raised beds or not.

hey, tommy...appreciate your feedback!  yes, i forgot to mention in my original discussion--i do offer a discount if someone brings their own cup or travel mug.  they are usually 16 oz mugs, so i drop down one tier and charge what i would charge for my 12 oz cup; $2.25.

where's your business located?  how long in the biz?

 

best of everything this new year!,

 

sage

the coffee hound

Tommy said:

Hi Sage,

 

do you do discount for bringing your own cup?

What we do at our cafe is this: 15% on drinks if you bring your own cup (any cup, mug)

If they come in to the cafe, and order a for here cup, we first charge in full, if they come back for a refill than we put on a 15% off the original price.

If they come back and ask for a new drink with no cup, than same original price.

 

See ya. 

 

 

 

 

jackie and brady...just wanted to say thanks for offering your comments regarding refills at your shops.  know what i've found interesting about the whole discussion?  simply: that running independant shops really gives us all the opportunity to tailor our businesses to match our interests, goals, and personal choices.  everyone's approach is a bit different, and if that works for you and your customers, great!  its kind of like coffee itself...you can enjoy it about 100 different ways.

appreciate everyone offering their comments along the way here.  oh, i may have used the word 'legit' too loosely...i didn't mean to step on anyone's toes at all.  for sure, some of my methods and approaches to running my business may be far from 'legit' compared to another similar business!

 

best to all in '11...prosperity!

 

sage

the coffee hound

Brady said:

We offer a 12oz ceramic mug of coffee, with refill, for the same price as the small to-go.  The refill is done specifically to encourage people to get their coffee in ceramic.

 

If they are staying in-house, we want people to drink our coffee in a mug.  It smells better, tastes better, and provides a more enjoyable experience all around.  We're one of the only shops in the area that does ceramic service, and we want to make the most of that.  Sometimes hearing that "it comes with a refill" is what pushes the customer over the edge and away from the larger to-go size.

 

We price all drinks to fall within our target range for COGS.  The COGS for the small for-here with a refill is just within this range.

 

We batch-brew, by the way, so the incremental cost for the refill is not much.  We do dump our coffee when it expires, but it is a relatively small percentage. Still looking at a manual brew bar to help with this (and improve product quality too).  We would not do refills for manual brew - the incremental labor cost are prohibitive.

 

I do understand the logic behind the "no free refill" policy.  Our refill policy makes sense for us in the bigger picture, which does not include intentionally undercutting the "legit" shops by the way... from what we here, we're the most legit shop in our area.

lol, angie!

 

sage

the coffee hound

Angie McDaniel said:

amen, brother!

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. 

I like what you have to say about "treating" the customers at your discretion. As an owner of the business it would be simple to keep track of those things, but may get out of hand if other employees just give away coffee freely to friends. A punch card for purchases, offering the 10th one free for example, would be a good way to say thanks you. Something to consider; if every customer, took their FREE next coffee, the business would be giving away half their goods. A definite dis-service.

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