How do you know which customers want to be an insider?

Coffee Cupping

This past weekend, I checked off two to-do- list items with one visit to @OnyxCoffeeLab.

First, I was looking for a good locally-owned place to sit, sip and write. A coffee shop.

Second, I was meeting with the founder of a @StartupWeekend-born startup to discuss how it would go forward.

It started off nicely enough with a chat with the baristas about the Northwest (one of them was from Pullman, WA), including some agreement that NWA’s current 18% gray winter sky is right out of a classic Northwest winter.

After some solo writing time, my meeting guy arrived. As we finished our discussion, a group of people entered together, filling the table’s remaining 10 seats. Soon after, the shop’s owner came over and started assembling a mass of small coffee cups, bottled water and other gear.

Turns out that a couple of hours earlier, I had settled into a seat at the Onyx Coffee Lab‘s cupping table.

Lean Customer Development

What I witnessed next was a nice session of customer development.

In addition to enjoying some new-to-me coffees, I watched as the owner exposed already-bought-in customers to new products that he’s considering for their product mix. None of the coffees we tasted are available for sale – the owner was still determining which ones he liked and presumably was using the reaction of this group to refine his opinion.

Later, I found out that the shop does cuppings (think “wine tasting” for coffee) almost every Saturday at 10 am. Sometimes they discuss different brew methods or other coffee geekery – always with a dual focus on education (building a better customer/spokesperson) and the coffee itself. This week, the education component included some help understanding how the coffee business grades coffees, ie: specialty vs run of the mill vs “not-so-specialty” coffee and how the various acids and sugars in the bean result in what we taste and feel when we have a cuppa Joe.

I didn’t discuss this with the owner after the cupping, but I suspect this was not only done in the interest of Lean Startup style customer development, but also to gather some feedback from those bought-in customers – presumably some of their biggest, best-engaged fans – as well as to build on their fanbase while pulling existing fans a bit closer.

I wish these sessions were on YouTube. They’d make a nice series for new fans to review as they choose their next “thirdplace“, much less for fans who missed a Saturday.

Oh yeah, the coffee

Coffee nerds, if you’re wondering what we tasted, we had:

  • Brazil Caturra
  • Burundi Bourbon (pronounced burr-bone, which has nothing to do with Jack Daniels)
  • Guatemala Geisha (no, nothing to do with Japanese bathhouses)
  • Ethiopian Heirloom (this one seemed to be the crowd favorite)

I preferred the last two, but I wonder if the order of their presentation provoked that result.

All in all, it was a great combination of StartupWeekend, coffee and the use of Lean Startup principles. Yet there’s one more lesson you can take from it.

In what position do they see you?

How can you can tweak and use this for your business? By understanding that a cuppings aren’t just about coffee, they’re about positioning.

  • The owner shares his coffee insight, education, expertise and knowledge with a group of customers who appear to be insiders. Almost everyone else in the shop is watching and listening intently since they don’t have a seat at the table (it’s first come, first serve). Some of them want a seat at the table.
  • The owner gets to meet with customers who have raised their hand to show they’re interested at a level beyond the customer norm. These folks will talk about the shop, its coffee, the cupping and anything else they felt was important. These people have other friends with common interests – including coffee. You know it’ll be discussed. In fact, you just read what I shared about it.
  • “Raising their hand” says “I care about, enjoy, have enthusiasm about coffee at a higher level than your average customer.” Just being a customer at a “coffee lab” shows a higher than typical interest in coffee. These guys go beyond that norm. Those are the customers for whom your positioning is most important. They are also the customers whose feedback you want.

How you can accomplish these things for your business?

Out of Stock

Quais de Seine, Paris
Creative Commons License photo credit: Zigar

When your store is out of stock on an item…what does your staff do and say?

When I was out of state not long ago, I looked around for a pair of light hikers for everyday wear. I knew exactly what I wanted right down to the model name.

I visited a locally owned store, but they didn’t have my size in stock. A few days later, I visited a box store. They had the shoe on the wall (which is never my size), but they didn’t have any others. They didn’t even have the match to the one on the wall.

As I got into the car in the box store parking lot, I called the locally owned store again just in case they had some new arrivals. Nope.

They offered to order a pair for me, but I told them I was visiting from elsewhere and wouldn’t be around when they arrived.

At this point, they had choices:  Focus on the sale, focus on the customer or try harder.

What’s your focus?

If your sales people are trained to focus on the sale, they might say “Nope, we don’t have any” and be disappointed that they didn’t get a sale. If that’s the end of the conversation, your customer might go elsewhere – losing the sale and the customer.

If your sales people are trained to focus on the customer, they might say “Nope, we don’t have any. Have you looked at (competitor number one) or (competitor number two)? They both carry that brand.

If your sales people are trained to focus on keeping your customers happy, they might say “Nope, we don’t have any. If you come by and let us fit you in a similar shoe in that brand, I can order that model in your size and have it shipped to you. If it doesn’t fit like you want, we’ll take care of you until you’re happy or we’ll give your money back.

What they did was refer me to two of their competitors (one was the store whose parking lot I was in). The second one had my size in stock, so 20 minutes later, I had my shoes and was heading for the in-laws place.

The “try harder” choice might not have been what I wanted, but I wasn’t given a choice. Keep in mind that you can always fall back from the “try harder” position if the customer isn’t interested in or cannot use that kind of help.

The important thing

You might think that the locally owned retailer lost a sale, but that isn’t as important as keeping the customer over the long term.

While I wasn’t able to buy the shoes from the place I wanted, they were able to help me find them.

They could’ve run me off quickly by saying “We don’t have that size.”

They didn’t do that. I suspect their handling of the call was the result of training driven by a management decision.

I wasn’t a familiar voice calling them on the phone. While I’ve bought from their store on and off for 20 years, they don’t know that because they keep paper sales tickets. I’m not there often enough to be a familiar face / voice and had not been in their town for two years.

Yet they treated me like someone they want to come back.

Do you treat your customers that way? Do your online competitors?

Competition from tomorrow?

Sometimes business owners complain about online competition.

Yet online stores can rarely provide instant gratification. It’s difficult for them to help you buy something you need today for a meal, event, dinner, date, meeting or presentation happening later today.

They can rarely deliver the kind of service a local, customer-focused business can offer.

Online often gets a foothold when local service and/or selection are poor and focused on the wrong thing. Even with online pricing, a product isn’t delivered until tomorrow.

When you aren’t competing strongly against tomorrow, you really aren’t even competing against today.

Focus on helping them get what they want and need. Whether they are local or remote, customers just want to be well taken care of and get what they came for.

Indivisible

Coffee
Creative Commons License photo credit: Selma90

Howard Schultz is doing what few large corporate CEOs have done: Following up rhetoric with leadership, action and money.

While I prefer freshly-roasted beans from local roasters and rarely do Starbucks outside of airports, I will stop in this week in order to support this.

The post title? It’s inscribed on a wrist band you get if you donate $5 to the job creation fund the Starbucks Foundation started.

http://www.reuters.com/article/2011/10/03/us-starbucks-idUSTRE7921M320111003

 

A gut or a 6-pack?

against the day
Creative Commons License photo credit: filtran

Jim Rohn’s story about the Girl Scout who came to his door is hard to fathom on one hand (after getting to know him), and heartwrenching on the other, but I’m sure that if I could ask Jim right now, he’d be glad she came to the door.

I had a similar moment recently. I took a “Me Day”, something I almost never do – and should do more often. I slept a little later than normal, had a couple coffees, showered, went to breakfast and started writing in my favorite Kalispell coffee joint.

About 1pm, it felt like time to eat, and with no scheduled appointments, I decided to go to Five Guys.

I’ve been there only once before and shared a meal (supposedly intended for one) with my wife.

Today I didn’t even begin to finish it and sat there reading for a while. They have bottomless drinks, so I can sit there and swill Diet Coke all day, or for as long as I can stand the atmosphere – which is ok for a place like that but not much for getting the creative juices flowing.

“Well, duh” says the crowd

I looked up from my book and glanced around the room.

There wasn’t a skinny person in the building. Some folks were bigger than others, but every single person there was “large and in charge”.

But it hit me right then that environment was a big factor. Bigger than I ever considered. We choose our environments and from what I could see, this place was a choice that skinny people weren’t making. Duh, you’re saying.

Closed my book, got up, refilled my Diet Coke and left. Never again.

Crunches for your biz

Business habits are the same way. What change can you make today (not tomorrow, not a month from now) to start to turn your business around?

What habits and environments keep your business from being fit and in shape?

Good habits include reading, education, seeking out training, following up, taking in the right kind of speakers (either in person or via podcasts etc), constantly working to improve and being incessant about a focus on the customer.

Does your business have a gut or a 6 pack?

What change in environment and habits could start to turn that around?

Doing some coffee math

Saw this a few days ago from @dontheideaguy.

I’m trying to figure out why every other place that sells beans or ground coffee doesn’t make a point of being happy to take ANY Starbucks bag (not just the “specially marked bags”), year-round.

Toss that old bag or make an example of it.

Staple it to the wall like a number on a scoreboard and sell that Starbucks bag totin’ person a bag of *your* coffee.

Lessee, give away a $2 (retail) cup of coffee while selling a $10-$15 bag of fresh roasted beans? OK, if I have to.

It isn’t just reading that’s fundamental. Math is too.

What’s Scary? Ordinary coffee, Michael Jackson and a dancing tiger named Mike

So…what did you do to have a little fun?

Here are a couple of examples:

One of the many coffee shops that I prod now and then came up with this (among other things) for Halloween.

Note the R.I.P. sign, then check out the 2nd image.
Having a little Halloween fun at Starbucks' expense

Below in the hand of the chalk outline, a familiar green logo. Who could it be?

Note the familiar green logo on the cup. Refer to the display board in the prior photo.

Wonder how many people commented about that when they got back to their office?

But it wasn’t just retail and restaurants getting into the act. Major colleges did too, like LSU who remade the Michael Jackson Thriller music video:

Good stuff and just a few of the creative examples I’ve come across this week.

PS: For those wondering about the highest adult spending holiday, it’s Valentine’s Day. Get a head start.

What local coffee shops can learn from SEC football

Makes no sense, I know. Bear with me, it’ll clear up shortly.

I want you to read this story about ESPN’s new network for Southeast Conference (SEC) football. Don’t wonder why (too much), just trust that there’s an applicable lesson here and go read it.

Wordsmithing

Now it’s time to do a little wordsmithing while re-reading the story.

As you read the Sports Illustrated story, do this for me:

  • when you read “football”, replace it with *whatever you do*
  • when you read “SEC”, replace it with your community’s name
  • when you read “NCAA” or “college football”, replace it with your national market.
  • when you read “Florida”, “LSU” or any other team name, replace it with your business’ name OR if you really want to turn things on their head – with your biggest competitor’s name.

…and continue along those lines so that it becomes a story about your market, your business and your competition.

All done?

Just in case, a sample

Let me give you a sample since I suspect some of you might have thought one read of a seemingly irrelevant story was enough.

To make things a tad more clear, let’s take that coffee shop I occasionally talk about and use it as an example:

“At the core of our agreement is the fact that every SEC-controlled football game mom and pop coffee shop will be have Starbucks coffee available to SEC Starbucks fans throughout the conference territory state, and indeed the country, via an ESPN our distribution platform or through our partners,” said John Wildhack, ESPN’s Some Executive, Starbucks’ executive vice president for programming coffee shop acquisition and strategy.

At a time when most coffee shops and cafes are slashing budgets due to the poor economy, programs Starbucks stores suddenly have more resources at their disposal. Defending national champion Florida Starbucks stores is are adding $5.9 million to its athletic marketing budget next year and still had enough left over to kick in $6 million to cover overhead the university’s general fund.

Scary? Only if you’re the Big 12 or PAC-10 and you’re still reading the original article.

Snatch the pebble

If you truly are in the same business, your competitor’s strength is the target. Take it away and use it against them.

In Starbucks’ case, their strengths are their consistency (coffee is roasted in centralized warehouse roasting centers under highly-mechanized, controlled conditions), their retail/wholesale distribution systems and their buying power (ok, and their people, mostly).

Notice I didn’t say jack about insanely great, freshly-brewed coffee that was roasted by the owner just before the shop opened this morning.

Starbucks can no longer compete with that, or at least, they’re no longer willing to. Putting roasters in 4000 shops costs huge money (sorry, shareholders!) and takes up valuable retail space in those expensive locations they choose, plus they’d have to hire (or train) someone to do the roasting.

Suddenly, their strength is now their weakness, and you wield the Quality Kryptonite.

Update: Odd how these things travel in groups. What Harvard Business has to say about it, sorta.

Coffee: The new “Do you want fries with that?”

Mystical station
Creative Commons License photo credit: Jsome1

Anyone who has studied business or marketing for any period of time has looked at the impact that one sentence has had on McDonald’s.

It gets used in sales training every single day because almost everyone is familiar with that upsell. In some cases, it has become a punch line. The increment on each sales transaction was minor, but it adds up store-wide in a big hurry.

The “new black” in MickeyD upsells is moving people to a McCafe coffee drink. Bet on it to be HUGE financially for McDonald’s, even if it is primarily a get-it-and-go sale.

I suspect Ronald McDonald knows better than to think his stores are going to be the next “thirdplace”. Still, with a new upsell of $2.50 to $3.50 to their average transaction, there’s a big payoff.

Thirdplaces can relax, just a tiny little bit

I don’t expect it to hurt Starbucks and independent coffee shops all that much because they tend to be a thirdplace: a meeting place, an escape from the office, a hangout with friends, a place to meet clients and the like.

However, the new McCafe habit could easily impact the drive-up coffee kiosks that saturate street corners and unused parking lot areas nationwide – particularly if they don’t stand out with outstanding service and great coffee.

Having a good reason to drive past McDonald’s wouldn’t hurt their case.

For example, one of the coffee shops here stands out by having a cowgirl theme. The ladies in the kiosk dress like cowgirls (modern day, but still), their branding is Western cowgirl oriented and it flows nicely across their entire business – including their catering trailer. I know people who drive miles across town past 3 or 4 other kiosks just to get coffee from the cowgirl drive-ups.

That’s what standing out will do for you.

I was kidding about the relax thing. Relax? Are you nuts? 🙂

Starbucks just sells coffee.

Look closely at your business. Is there a complementary upsell that you can add to your line of products / services?

Maybe it won’t add 50% to an average transaction like a McCafe drink can, but you should still be looking for things that your customers SHOULD be buying when they buy what they came to the store to get.

Do you let them walk out the door with plywood or 2x4s without asking about nails, screws, liquid nails and other necessities?

Do you sell them a website without asking about other business services that complement their site?

I hear it coming: “Oh, but we just do websites.” Sure. And Starbucks just sells coffee.

If their website looks like it was built with Microsoft Front Page in 1995, it’s reasonable that other aspects of their business could use a refresh as well.

Chances are there will be all sorts of inconsistencies with their stationery, business cards, and in fact their entire marketing message. They may need other help as well. Once all this new stuff rolls out, will their sales staff need training? Will their delivery people or service staff need a reboot on how they do things? Probably.

The tough question: Are you selling them a pile of HTML and graphics or are you giving them the tools they need to take their business to the next level? No one wants to buy HTML. Everyone wants to buy the magic pill that transforms their business, even if that means buying HTML along with a few other things.

Even if you don’t want to, can’t or are not interested in doing those other things, you can always find someone you trust who *can* do them.

Save them from themselves

Remember, an upsell doesn’t have to be an extra. It might be what saves that customer an extra trip back to the store (or worse, to a competitor’s store). It might be what they REALLY TRULY NEED.

Save them money. Save them time. Make sure they have everything they need before they hit the road. I guarantee they’ll remember it if you start saving them return trips to the store, regardless of how much extra they spend during that first trip.