Now that I’m working with lots of cafe owners and managers, I get a lot of similar questions. Since we’re focused on high-quality ingredients and a strong customer service interaction, Neil & I often hear arguments against the frou-frou fancy-pants coffee. If we have Dunkin’ Donuts, and bodega coffee, and cheap, plentiful coffee anywhere you look, do we really have room for a $4 latte? Who will pay for that? What’s the difference?
Our challenge as consultants and temps is to prove that there is room, plenty of room, for the four dollar (or more) latte. Not only that, there’s also plenty of room for the four, six, or even ten dollar cup of regular coffee. This is a concept that is shocking to most consumers or even most young cafe owners.
The fundamental idea that needs to be understood is that great, local cafes should source great, local coffee. With that coffee there is an inherent improvement over generic, mass produced coffee. Independent cafes should be focusing as much as possible on producing the best possible product they can achieve. In fact, having an outstanding product should be the foundation of their business – from which all other aspects of the business will derive.
Clearly, that means their coffee is not the same thing as Dunkies or Starbucks – giants who have all kinds of cost-cutting strategies, bulk purchasing power, or most simply that they roast their own coffee. Creating the best possible product is not the intention of these companies or any large national or international chain. Their goal is to satisfy the widest possible range of consumers with an acceptable product, and then focus on advertising and marketing the products as far as they will go.
So here is my point, to my fellow specialty coffee professionals: Specialty coffee isn’t about price, it’s about value. People, time and again, are willing to spend more if they know their investment is worth the risk. As baristas and cafe owners, what we need to do is ensure that the entire customer service interaction, from the moment they walk in the door, to when they pick up their custom-made drink, to the moment they leave, has an overall value that is worth the $4, or more, that they paid for the experience.
Usually that trust doesn’t develop overnight, so if you’ve just opened a cafe and your customers are skeptical of the prices, don’t expect them to understand it yet. Offer samples of your products and explain why you charge what you do. Provide the value of that skeptical customer walking in the door (how many times in the last week, month, or even year have you walked into a brand new business to check it out? at 8 o’clock in the morning?). Whole Foods’ success is based largely on its continual offering of samples, and is now a household name to most of the country.
If you’ve been in business for a while and your sales are down, don’t think about cutting your prices or your costs first. That could be the first step down the path of failure. Instead, ask yourself, your customers, and your staff, “What are we missing?”
You might not be missing a menu item or a retail item. It might be that your are missing other intangibles that directly impact your sales – like an inviting atmosphere (anyone care to hang out in an NYC cafe with no A/C in the summer?), a good staff morale (anyone like getting yelled at by a grouchy barista who forgot your order was to stay?), or a great product (how about paying $5 for a soy latte and having to throw it away because it’s terrible?). When those things go missing, your company and your product lose value. You lose customers.
We can’t compete with the advertising and marketing of the green serpent and all her friends scrambling to cash-in on our rapidly growing specialty coffee market. The good thing is, we don’t have to. By using a fantastic product as a base, and then thinking about the value we provide as drug pushers, community advocates, coffee experts, or just a friendly face making someone’s day, we will find those people who see the value.
I would also love to hear of people’s stories of how they see the value in their products and customer service experiences!
further reading:
Nick Cho “Your Local Coffee Shop – Courtesy of Starbucks?”
James Hoffmann on meeting vs. exceeding expectations
The Coffee Boys on sampling.