How can we coffee retailers survive this scary recession?It's here and we all know what we have to do: cut costs and add revenue. Let's use this exchange for what it's perfect for! If you have a product or a promotion or something that's working to add new revenue streams, share it here. If you've found creative ways to cut costs, shave expenses or otherwise keep more green stuff in the register, shout it out to the rest of us! And please, let's not hear "Our Great Coffee!" or "My Fantastic Staff." Quality coffee and trained staff are key, but we all feel that way. Let's share things others may not know about. We have a great brain trust here and we need to work together to survive this recession.

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Gift cards...immediate revenue, brings new people to shop, and can create loyalty...
Hey Tim,

We feel your concerns and have spent the last couple months developing a new class directed towards retailers who are feeling the effects of this economic climate. Here is a link to the details. The class will be in a different city each month, and is meant to be an affordable way retailers can optimize their shops on so many different levels.

Dozens of coffee roasters and allied product companies are jumping on board by offering a $200 subsidy off the $495 price tag. Let me know if you are interested.

We also hope to get this info in a format for those who are unable to attend a 2 day class, and I'll keep you all posted.

- Matt
Along the lines of Exspressoyourself - While we don't own a shop, I have customers that are doing well with a few promotions:
1) $25 gift card for $20 option (or variations of that). The thought is that the $5.00 savings is immediate and that $5.00 of gift card money is not a $5.00 loss - it's $5.00 of retail price on product.

2) Buy a gift card and get a drink on your next visit Free (or 1/2 off) - Builds a bounce back in the offering.

3) Bounce back coupons printed at the end of the receipt - Our system allows customers to print a bounce back coupon at the bottom of a ticket.

Finally - Buy a POS system :). Simply put, there is no other equipment that can help you control costs, labor, theft, mistakes etc as well.
Mike, we actually do the $25 pre-paid card and sell if for $20. It's worked well. We also have gift cards in $5.00 denominations, so if the purchase is $4.00, for example, we give the change back with 4 $5.00 gift cards plus $1.00 in cash.
Increase perceived value. Create combos... emphasize the indulgence and the handcrafted aspects.

Make sure your customer is aware of everything that you offer... many like doing business with you and will increase their business if it fits their needs. Make sure they know that you'll push some tables together if they need a place for a meeting. Put together a paper menu if you don't already have one, so that they can see all your offerings in one place.

I don't like the idea of pushing/discounting gift cards quite as much, especially if you pay for the cards and/or see a per-swipe charge. This is good if people are giving them as gifts, but many of them will go to your existing customers. Sure, it makes the register ring, but that sale doesn't really show up on your balance sheet. Take a good look at the details of your gift card program before you go this route and make sure you aren't shooting yourself in the foot over the long haul. Also make sure that your store will eventually see any unclaimed balance. There are some pretty bad gift card programs out there, make sure you know the details of yours.
See also an extensive discussion on this topic - Economic Crunch. Some good ideas there as well.
Great responses so far. Matt, any chance of setting up a webinar or some online access for those of us on the "Right Coast?"
Something we've found that drives more new and repeat business is unique products. We do our own baking and found that the frozen croissant dough we use can be baked in a muffin pan, rolled in sugar and cinnamon and is delicious and, at least around here, unique. We also mess around with muffins, for example, combining cinnamon batter with oat batter for a toasted cinnamon oat muffin that sells well. (On the down side, we tried making a red white and blue muffin (cherry/poundcake/blueberry) for Independence Day that turned out a rather unappetizing pink, yellow and green, which I think are the national colors of Kazakhstan.) Any fun products out there?
Have been running a special starting this past week and running for the month of Dec. - "Buy a pound of your fav whole bean or ground coffee, and receive a small latte of choice for FREE!". So far so good. Have run it before and it was quite successful. I like it because it gets customers in the habit of buying YOUR whole bean, if they are not already, and also lets them 'remember' how good that fav latte of theirs is - seeing as a lot of people have seemed to cut back to drip only.

Tim: Something fantastic that I've played with, but not actually sold, is: your fav muffin batter baked onto a ritz style cracker. Yum!
Traci, great observation. We also serve "small, medium and large" and take it one step further. When anyone orders "a cup of coffee" and doesn't specify a size, we serve our medium (16-oz.) We've done this for 4 years and so far, I can't remember anyone objecting.
That is a good idea on the $5.00 gift cards John. Recently I had a customer share with me that they are selling $25 gift cards and immediately giving the customer a free drink - that seems to be building up the loyalty as well.

Another item to remember is that discounts, specials and coupons are only as good as your tracking. If you try something out and then have no statistical information on it other than "memory", then you are quite possibly wasting your time. Tracking items tells you what works and what doesn't.

John Kijote said:
Mike, we actually do the $25 pre-paid card and sell if for $20. It's worked well. We also have gift cards in $5.00 denominations, so if the purchase is $4.00, for example, we give the change back with 4 $5.00 gift cards plus $1.00 in cash.
Through the 1st of the year we are doing gift cards as $25 for $20, $50 for $40, and $100 for $75.
We've sold 5 of the $100 this past week and several of each of the other, but it's also increased visibility of the card promo has sold smaller denominations that don't have the discount. Today we sold 25 $10 to one of our regulars as well. After the holidays, we will streamline the offer, but it's $$ up front and most are already loyal customers as it is.

We have several customers who load up the gift card every few weeks rather than using credit. It eliminates the fees and I'd rather remind someone to use "caffe d'bolla" rather than "Discover". :)
So what if regulars use them? Do not take your regulars for granted. Selling them discounted cards will encourage them to continue to come in when they might be cutting back. At the end of the day, you are selling them mindshare as much as anything else. Don't give them the chance to wonder off, even if nobody else is doing the quality you are doing. Oftentimes you are competing with the coffeemaker at home. Avoid discounting anything related to your product, or you will commoditize it. OTOH, discounted cards are viewed more like free money. Pitch it that way, or as a reward for loyal customers. Make sure your promotion has a reasonable time frame, and end it appropriately.

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