Web Stuff and Whatnot

When visiting one of my favorite local coffee shops recently, I encountered some shocking news- their preferred customer card program was going to be canceled! Imagine my sorrow as I looked at my current preferred customer card, still in need of about seven more cups of coffee to get one free. I could never complete it by the looming deadline, so I was forced to dispose of the card later that day.

So who cares, you ask? At first I didn’t care very much either, but I wanted to know more. The owner said that costs have been rising (apparently milk and coffee beans are precious commodities these days), and stopping the preferred customer program was one way to reduce costs in order to prevent price increases on cups of coffee. Fair enough, I thought, although I immediately wondered if they could really save that much money. In my case, we’re talking about one free latte or breve (roughly $4) after purchasing ten of those very same drinks. So I’m essentially getting my drinks at a 10% discount, but I also actually have an incentive to go back for more (filling up those cards was sort of fun). Throw in a muffin or danish, and I bet their doing pretty well on my business. The card may not seem like much, but this coffee shop is also fairly convenient, and I especially like the iced breve they serve, so stopping by frequently was easy.

So what’s the point? I’m getting there. About a week after the end of this preferred customer program, I found myself stopping nearly every morning at a different coffee shop.

Why? Well, I especially like their hot latte, the location is slightly more convenient, and they happen to offer a preferred customer card. Could the card really be that important? I didn’t think so at first, but the more time I took to ponder these events (with hot latte in hand) I began to perceive that the cancellation of the card by the first coffee shop left me feeling like maybe my business was never that important to them. I mean, I was a preferred customer after all. Now what am I? Just a regular customer? That’s not so bad I guess; Starbucks doesn’t have a special customer card, but they do a better job of talking to their customers and making them feel welcomed. I don’t know why, but the local coffee shops around here don’t seem quite as adept in that area.

Final analysis- I think the biggest key here is what the owner of coffee shop #1 did not do. Did he talk to the preferred customers before making this move? Maybe so, but he didn’t ask me, and if he had, I would have told him that I would not even notice a price increase. I couldn’t tell you now what I pay for a cup of coffee. I know that it’s typically a bit under $4, but I never would have noticed a 5% or even 10% price increase. And even if I noticed it, that wouldn’t prevent me from buying the same amount of coffee that I do now. I already know these drinks are over-priced, but as Starbucks has proven, the experience and the brand are what we pay for.

Lessons to learn-

• Don’t alienate your best customers! Seems obvious, doesn’t it? You would think so, but in my opinion that’s exactly what our coffee shop owner has done.
• Talk to your customers. I think if this owner had asked, he would have found my opinion to be common among the majority of customers- prices of fancy coffee drinks just aren’t that critical. Go ahead and raise them.

I’m a business owner, as are most of my clients, so I thought this little scenario would be worth sharing. Perhaps it is these seemingly small, yet fundamental areas of business that are the most easily overlooked.