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?

The Amazon Prime Directive

Moving away from the light....and into the darkness of night
Creative Commons License photo credit: mendhak

What did you learn from – and change in your business – after Amazon launched Amazon Prime?

If you aren’t aware, Amazon Prime is a membership-based service that provides access to Amazon video-on-demand and free Kindle books from the Kindle lending library – but more importantly, it upgrades all purchases to from regular ground shipping to free two-day shipping.

The question remains – what did you take away for your business from the launch and subsequent success of Prime? Did it provoke you to change anything about your business and how you work with customers?

Even if you don’t do retail, there are lessons to be learned from what Amazon is doing.

The Fresh Prime of Bel-Air

Plenty has been written about the success of Prime and what it’s done for customer loyalty.

One quote from the Small Business Trends piece (linked above) that might get your attention – a comment from a Morningstar analyst who researched Prime:

What we found is that, generally speaking, last year Prime members spent about twice as much as non Prime members. (emphasis mine) They spent about $1,200 dollars compared to $600 for non Prime members. What’s also interesting is that the average person shopping online last year spent approximately $1,000. What that says to us it that Prime members generate more incremental revenue per than non Prime shoppers. They are doing most of their online shopping on Amazon as opposed to going to other sites. Prime members generate more income.

Recently, Amazon took the service a step further with the introduction in Los Angeles of Amazon PrimeFresh, which expands upon their Seattle-based test program.

What can you take away from this and implement at your business? Do it for them. Deliver it for them. Automate it for them, as appropriate. All with more personal touch than Amazon can afford to do *in your community* and *in your market* with *your customers*. Yes, automation *can* result in more personal touch.

The key is the emphasis on your community, your market, your customers. I’m not suggesting that you try to clone Amazon.

Behavioral shifts

There’s much more to this than automation allowing you to buy produce via your web browser. Customer behavior is central to what Amazon does.

When Amazon saw that Prime members behaved differently, then they could work differently with them. Simply by buying a membership in Prime, a buyer is telling Amazon “I am going to buy more, more often.”

If your customers could send you a signal in advance like that, how would you use it to improve what you do for them? How do you care for your best customers? How do you encourage new customers to take advantage of what you offer like your best customers do? How do you make buying friction-free and easy?

Now reverse that. If you look at customers who buy more and more often from your business, what are you doing to take care of them? What if you did those things for more of your customers – would it turn some of them into Prime-like customers?

Amazon, WalMart, You

We’ve talked repeatedly about “When Wal-Mart comes to town“. Amazon’s taken WalMart’s game and made it more convenient and logistically efficient.

Take from them what makes sense for your business and implement it a step at a time, even if your implementation looks completely different. The lesson is doing what matters for your customers, rather than blindly cloning what Amazon or WalMart do.

For example, let’s say you sell high quality, organic meats that your area’s chain grocer doesn’t carry.

Do your customers forget to stop by your place? When they’re at the grocery, do they grab something there because it’s in front of them? That convenience can cost you a $25 sale. How many can you afford to lose each week?

While you probably can’t afford to provide same-day delivery like Amazon does in Los Angeles, you can serve your neighborhood or small town in a similarly convenient way. Maybe you deliver on Thursday evenings so people have their weekend meat supply for campouts and family gatherings in advance of their weekend grocery shopping. A part-time employee could deliver their pre-paid orders.

You don’t have to cover the whole state 24 hours a day, just your market area (or part of it) as convenient.

Make quality, local buying easy. That’s the local Prime Directive.

I know this sounds awful

Franjipani Maldives
Creative Commons License photo credit: Badruddeen

On a late afternoon errand run, I stopped into a local hardware store for a bag of potting soil.

I asked the woman at the counter if they had any left. She stared back at me as if I had asked her for a date (she was at least 25+ years younger), responding “Anything we have is on aisle 5”.

A few minutes later, I’m approaching the register.

As I take my place at the back of the line (now 2 people long), a car pulls into the parking lot as the guy in front of me asks about another possibly out-of-stock item. After answering him, she sighs and comments about another customer coming in 10 minutes before closing time.

Another employee approaches the front of the store and while ringing me up, she suggests to her peer, “Can you flip the signs to closed so they’ll stop coming in?”

Then she says “I know that sounds awful, but I have another job to go to.”

Yes, it does sound awful.

While I will think twice before burdening your employer with my business again,  I do appreciate your moxie at doing whatever it takes to make ends meet.

Sometimes that voice in your head should stay there.

Loose lips raise communities

community obligation

It’s Saturday morning, so the ritual of before-anyone-else-rises reading, writing and coffee is, as no one ever really says to anyone else, “on like Donkey Kong”.

After closing out a couple of chapters and heading to the laptop to write, I happen to see a piece in the news about a local who is heading off to the Montana State timeout facility in Deer Lodge.

I make a comment on Facebook about the story, the essence of which is “Good riddance, don’t come back”, and then move on to writing. So of course the first response to my “don’t come back” comment is politically charged (because that’s the only way some people see the world these days) and a little snarky.

Public comments of a political nature are rare from me because political conversation usually degrades into one of two things: political arguments or political rants. I have absolutely no use for either one because I find them a waste of time.

So why did I say anything about this story? Why this time?

It isn’t just news

Because this isn’t just news, and it’s only political to those who see the world only through their party’s political lens, regardless of their politics.

What struck me about this story is that the criminal in question is a convicted felon on parole who owned a business and is married – yet no one noticed a thing. Yes, despite the comings and going of employees, customers and a spouse, no one saw or did anything and when asked – the convicted criminal’s spouse said “Oh, I just thought those people were coming over to use (the convicted criminal’s) computer.”

Really?

Is that your contribution to the community? I’ll bet you can tell us what happened on the last two episodes of Real Housewives (or similar), but all that stuff in the basement (nothing out of the ordinary, just the guns, drugs and other stuff) somehow escaped your attention.

Again, why did I say anything about this story? Why this time?

Beyond the headline

Let’s go beyond the headline and it’ll become clear.

We have a business owner with employees. Now that the business owner is going to Deer Lodge, the business is likely to go under, because the owner is probably the “technician” (read The E-Myth). But there are other reasons that the business is likely to lose.

The community now knows that the owner is a convicted felon – in this case, a repeat felon with meth and weapons charges. That isn’t likely to attract more business.

What does the community lose if this business fails?

  • Employees lose jobs.
  • Employee families experience decreased financial stability, if not serious trouble. It’s not uncommon for these things to roll downhill to what might be called “social issues” such as domestic violence or changes in the behavior of kids. It just depends.
  • Whatever benefits the community might gain from the tax revenues collected from that business.
  • The rollover of money use from those employees’ pay in their community.
  • Some level of stability of the community, which drops when the stability of the communities’ employee families drops.

Those are just the obvious ones.

Had someone said something sooner, maybe this could have been averted. In the case of a repeat situation like this, maybe not. We’ll never know. The choice made to say or do nothing reminds me of a conversation I had recently with a group about their obligation to sell harder.

Why sell harder?

Selling harder benefits your community in ways that are similar to those mentioned in the above business failure discussion.

I have to repeat this because people tend to take it out of context thanks to an experience with a less-than-reputable salesperson in their past: Selling harder does not mean “hard sell” or unethical sales. It means selling better and testing the “fringes” of your market for new opportunities.

Selling better should result in a stronger business, thus more stable (perhaps increased) employment, thus more stable families, thus a more stable community.

It’s your obligation to sell more and better, just like it is to be observant and open mouth when something’s wrong.

Both reflect your leadership as well as your stake in your local community.

Is the lack of Wal-Mart actually a tax?

K_Day-09.09.2005_163136
Creative Commons License photo credit: Lordcolus

A lot of thoughts come to mind both ways about Wal-Mart‘s effect on local businesses and consumers.

No shortage of them are provoked by this Forbes op/ed saying that the lack of access to Wal-Mart in NYC is actually a tax, and continues by stating that building a WalMart in NYC is economic stimulus.

For example, the author ignores the local sourcing that WalMart used to do during its “Buy American” phase. He also fails to discuss that when left enough time in a competitive market devoid of Wal-Mart, poorly run local businesses tend to fail anyway.

What do you think?

Losing Supermarkets

Two years ago, the San Francisco Chronicle wrote about the closure of San Francisco’s neighborhood supermarkets, a trend that continues today.

The stores weren’t closing because of a lack of profits.

They’re closing because developers were offering a ton of cash for the big, wide-open spaces they held (parking lots, box store sized buildings, central locations). Certainly it’s within the rights of the developers and the owners to make a deal, but the neighborhood is often the one that feels the long term impact of deals like that.

Fortunately, an original owner of the chains started buying the stores back because he didn’t want them to disappear.

Think about what happens when your small town (or your big city neighborhood) loses a locally owned grocery store or other locally owned vendor of stuff you could get at Big-Box-O-Rama.

What about the money?

I know, money is tight in a lot of households. And I know that those box stores are usually cheaper.

Ray Negron at Cimarron Cafe & Catering said something about this a couple weeks ago: “My clients work hard for their money. I work hard to make sure they get good value and a nice meal when they spend it at my place.”

Think about taking $50 a month that you’re already spending… and spend it locally in hometown-owned businesses.

Make it clear to them *WHY* you’re doing it.