Winning against the chain store

Yesterday, I sat down in a store that’s part of a Montana-based coffee shop chain. I wanted a quick cup and I had about an hour to write before a young man’s Eagle Board that was down the street, so this location was a perfect fit.

I drove past Starbucks to reach this place. I try to visit locally owned places whenever possible, and like many, I’m a creature of habit. This place has spent a lot of time as my writing venue over the years. The visit reminded me of some reasons why the chain store wins your neighborhood.

Habitual habitat

I admit that when it comes to coffee, I’m not most people. Maybe I’m a coffee nerd. Even so, let me shine a light on some reasons why people go to their place instead of your place – and most of them have nothing to do with coffee – unless they’re coffee nerds too.

When I visit a coffee shop, I tend to seek out a place that roasts its own beans every week rather than using what was trucked to them after being roasted and packaged months ago.

I sit at the same table in this particular shop, if possible. It’s out of the sun and elevated so I can sit or stand and work, and it has its own power outlet. From that perch, I can see the entire store and observe customer service and other things that I write about.

What changed?

I hadn’t been in this shop for a while, so the absence made it easier to notice what was different.

The outlet next to “my” table had been fixed. It had been loose for years, so being rid of that looseness was nice.

When I ordered a mug, I got a paper cup. They still have mugs. I rarely take coffee to go. I prefer ceramic. Hey, I warned you.

The coffee was lawsuit hot. In other words – way too hot, even to sip. 10 minutes later, it was drinkable. Do you have any idea how long that wait is for someone who is enjoying the aroma of a new-to-them coffee that they can’t wait to taste? Reminder: I said I wasn’t a normal coffee drinker.

I ordered a pastry. In the old days, I was always asked if I wanted it warmed up (whatever “it” might be). Regardless of my answer, they’d deliver it on a plate with a fork rather than ask me to stand at the counter and wait on it. This time, it was handed to me across the counter, still in cellophane. No wait, but no plate and no “Would you like it warmed up?”

You might think these details are silly, but these are the kinds of details that transform an average experience at a nearby shop into “the only place they’ll go for recreational gathering place coffee”, much less “Simply can’t work at home today coffee”.

I’d guess that the real change since my last visit relates to who trains the staff and how. They were cordial, friendly and all that – but the experience had changed.

What didn’t change?

I was greeted when I entered.

Once it cooled, the coffee (a new one this time) was excellent.

Once I unwrapped it, the pastry was excellent despite not being warmed up.

The wifi worked.

I had a quiet place to write for an hour.

What about Starbucks?

What are you doing to stand out from the “sterile” parts of a national chain? What are you doing to make me drive past the chain store to go to your place – other than being locally owned?

Not all of you own a coffee shop, but most have a national chain or regional player in your market. Seek parallels. Take the stuff they do well (like consistency) and use it to improve your place. Ignore the stuff they do poorly, other than to eliminate it from your place. Stand out by making yours the only place they’ll go – and make sure everyone knows why.

Don’t think that a national chain can’t appear in your market. In less than a year, my favorite little town of 4000 people has gained two national auto parts chain stores.

Stand out before you have no choice. Many of the things you might do are things that the chains aren’t allowed to do.

tl:dr – Training. Metrics. Detail.

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

 

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.

Someone keyed my Karma

Month before last during a coaching session, I had a pretty frank conversation with a client about freedom.

Not the Constitutional kind of freedom, but freedom from the ball and chain that a business can become. I don’t mean that in a bad way, just that it can become a restriction to your freedom.

Not only that, but it’s common for small family-owned businesses to almost not be a business if the family isn’t there. If you aren’t there. Needless to say, this isn’t an ideal situation when unexpected events occur.

During that conversation, we talked about configuring the business so that it could stand an unexpected, required trip out of town for a month (or 3).

A month went by.

In last month’s session, we were talking about their retail business and once again, we talked (among other things) about how I felt they needed to spend some serious effort on figuring out how to grow and insulate the business from unexpected turns in life.

I gave them a few examples of things to work on, knowing that we’d need to revisit it and fine tune the strategy as we move forward.

And here comes Al.

Then I mentioned that I was getting to take my own advice, as I had just discovered that an immediate family member has been diagnosed with the early stages of Alzheimer’s.

Result: Recent efforts to move a portion of my client base a little closer to home were going to have to be reversed.

My business is going to be changing because – as I advised my client – I don’t know when I will need to disappear for a few months. Not completely disappear or be disconnected from the net, but just not be home for an unknown period of time.

A few weeks went by, and I was hoping that the owner’s thought and effort was going into that project. I’m sure it is, but it’s not an immediate change to do this to your business – particularly if you are in retail, restaurant or hospitality (ie: hotel, motel, b&b).

Another month goes by.

Last week, we talked again to schedule our next call and it turned out that the very thing I had advised preparing for was happening.

Family responsibilities requiring out of town travel on little notice for an unknown period of time. Really sad.

Meanwhile, I look in the mirror and remind myself that my business is changing for the same reasons and that I need to accelerate the pace.

Are you prepared for that sort of thing? Depending on your age and your parents age, it might be more apparent to you – but it can happen to you even if you are a 26 year old entrepreneur.

If you don’t ask for help, you aren’t likely to get it.

In 70% of small business failures, a key factor was the owner not recognizing or ignoring weaknesses, and then not seeking help.” – SCORE / US Bank survey of failed small businesses

Do you have someone in your corner who will ask you the tough questions?

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.

Starbucks strikes back against “theft”

http://www.theswom.org/profiles/blogs/starbucks-is-ready-to-tell

It’s a nicely done video with just a small rough spot here and there. I like how Howard thanks his staff.

It’s certainly a good example of communicating your company’s values in ways other than organically.

It’s not theft when you give it away

Most interesting is the claim that that indie coffee shops (perhaps more accurately: McDonald’s) are stealing Starbucks’ story. You know, the story about the indie, perhaps even quirky, coffee shop that does it all while you watch.

The story Starbucks gave away in exchange for stock certificates, warehouses and cookie cutter stores.

Back in prehistoric times before there were 4 bazillion Starbucks stores, before conference calls with Wall Street, they did the things that indies have always done.

Now, they compete with McDonald’s for the McCoffee market and they buy, roast and ship prefab coffee around like McDonald’s ships prefab burgers. To their credit, it got a little better when they went to Pike Place Roast, but it still isn’t like fresh roasted indie coffee.

Coffee should be roasted in your shop for consumption that day (OK, I’ll give you a week or so), not in a warehouse in (among other places) New Jersey.

What’s that smell?

To reclaim the indie story, you have to do the things an indie coffee shop lives for (and their clientele depends on):

  • roast your beans in the store, in small quantities.
  • serve ground-that-moment coffee, not ground-last-month-in-New-Jersey coffee.
  • roast coffee till it’s just right (rather than burn it)

The air in a community coffee shop should smell like fine coffee, rather than carry the aroma of stale french fry grease.

Congruence. Do you have it?

What makes you shine like a Ferrari?

Imagine getting laid off at 63 years of age simply because you’re old.

Now they won’t tell you that because you could sue them for that. Instead, they lay you off because another (ie: younger) employee doesn’t have to make as much.

Like a kick in the gut, you’d think.

But not for this guy. Despite health issues, a divorce, a failed consulting firm and getting fired simply because he (wink, wink) made too much, Michael Gates Gill proudly says he can make a toilet shine like a Ferrari.

He says “Starbucks saved my life“, but I think he’s wrong. 

More on that in a minute. 

More than ever, service matters

Some businesses offer great service. Some do not.

More often than not, the difference is in the attitude of the person behind the counter. They do what no one else will do (much less try) – just like the dog in the photo. 

In Mr. Gill’s case, the right attitude is really what saved his life – the attitude of both his and those of the people he works with. 

I’ll bet it comes across the counter at his shop. In fact, I’ll bet it impacts the attitude of many of his clientele and causes people to want him to wait on them rather than someone else.

Do you have anyone like that?

The Intersection of Policy and Customer Service

Joel Spolsky is a household name to most people in the software business.

He’s been blogging for years about Microsoft, customer service, the software business and even how to build out an office in New York City. Not long ago, he started blogging for Inc. Magazine.

Today, he’s our guest poster and talks about something we spoke of yesterday: The intersection between policies and customer service.

Enjoy. I’m over in Fort Benton Montana covering the State swim meet.