Build Your Customer Base!
Technology Tools To Help

CoffeeFest 2014
www.coffeeshopmanager.com
How To Increase Business:
Get Existing Customers to Buy More Often
Increase Ticket Averages
Attract New Customers > Regula...
Who are your customers?

Starbucks:
•8.3% More Female
•35 – 44 age
•>$60,000 per year
•“Urban Commuter Family”
•College-Ed...
Who are your customers?
Suburban Moms
Commuters
Office workers on breaks
Company meetings
Young friends
Independently Empl...
Getting Customers to Buy More Often
Eliminate Barriers
• Convenience
• Cost
• Health / Calories

Inspire / Motivate
• Feel...
Convenience

50%

of consumers surveyed had
turned away from a restaurant
due to long lines in the past
year.

CoffeeFest ...
Convenience
Coffee Shops are using technology to
give customers options:
•Online Ordering
•Mobile Ordering
•Self-Serve In ...
Does Online/Mobile Ordering Make
Sense for Coffee?
Customers ordering on-the-go
Convenience is important
Ordering Part of ...
Picture This:

Suburban commuter
places order on smart
phone after she drops
kids off at school. She
swings by the coffee
...
Picture This:

Office Assistant plans
ahead for today’s
executive meeting. She
goes online to place the
exact drink orders...
Picture This:

Colleagues leave the office
for a 10 minute break.
They have just enough time
to walk 3 blocks to your
shop...
Picture This:

A group of friends
enters your busy shop
and sees a long line.
Instead of waiting to
order, they grab a sea...
Picture This:

Long lines during a busy
time turn off a would-be
new customer. They turn
to your self-serve ipad
Kiosk whe...
Picture This:

Thousands pass thru your
building’s lobby every day, but
may not stop in your shop
around the corner. A fre...
Mobile Fact:
Worldwide, more people own
mobile phones (4.2 billion) than
toothbrushes! (3.5 billion)
YIKES!

CoffeeFest 20...
Mobile Demographics
VS.

Who Owns SmartPhones? Who Drinks Coffee?
•45% American adults
•68% of those making > $75k
•61% of...
Consumer Use of Restaurant Apps

69%

Consumers surveyed have used
mobile internet to place a food
order
Have downloaded a...
Why Use A Coffee Shop App?

78%
54%
26%

Order Discounts
Loyalty Points
An Easy Way To Enter An Order
An Easy Way To Find ...
What Type Of App
VS.

General App
• Such as Snapfish, GrubHub,
SquareUp
• Lists you along with competitors
• Can help new ...
Proven Results of Online/Mobile
Increased Ticket Averages
• Customers can browse the full menu
• Easily promote upcharge i...
Removing Barriers
Online – Mobile – Self Serve
• Improves convenience & speed
• Attracts potential new customers
• Expands...
Potential ROI for Online & Mobile
Mobile App:
• 100 regular customers order one more time per week
because of the convenie...
How To Increase Business:
Get Existing Customers to Buy More Often
• Mobile & Self-serve ordering removes barriers
• Mobil...
Gift / Pre-Paid Cards
 1 in 4 transactions use the Starbucks Card in 2012
 Schultz: “The Starbucks card may be the natio...
Gift / Pre-Paid Accounts
Customer Benefits:
•
•
•
•
•

Convenience: Purchase without wallet
Budget: Pre-load card to track...
Gift / Pre-Paid Accounts
Shop Benefits:
•
•
•
•
•
•
•

Brings in new customers
Reduces credit card fees if more transactio...
Promotion Ideas
• Hand out “Free Drink On Us” at community events, local businesses,
people on the street. Give employees ...
Card Giveaway ROI
500 Free $5 Cards to attract new customers
Your Cost:
•$5 = (typical gross margin of 85%) = $.75 x 500 =...
But What If . . .
500 Cards Issued / $550 in Cost
• 5% (25 customers) become 1x-a-month regulars: $1350 per yr.
• 3% (15 c...
Potential ROI for Pre-Paid Cards
• Customers buy your Pre-paid card special “Free Latte”
with $40 card fill.
• 100 cards s...
Loyalty: Power Up Your Program!

35%

Consumers estimate their visits
increase once they join a restaurant
loyalty program...
Customer Loyalty
Make them happy
Create a community
“The number one thing that influences our feelings of
happiness, pleas...
Turning 1st Time Visits
Into Loyal Customers

30%

Chance that a 1st time customer has
of becoming a long-term profitable
...
Loyalty Basics
Basic Buy 10 get 1 Free punch card
program
• Card punch programs replaced by
electronic systems
• More soph...
Loyalty : The Next Level
• Systems work across multiple stores
• Allow for cards or based on
customer e-mail or phone #
• ...
Loyalty : Communications

69%

Wish to receive emails as part of
the rewards program with offers for
items they have order...
Loyalty : “Hidden Menus”
Hidden Menus:
• Make loyal customers feel “in the know”
• Help customers bond with staff
• Makes ...
Text Message Marketing

50%

Consumers age 18-30 are “happy”
to receive offers via SMS (text)

Of text messages are opened...
Loyalty Program Best Practices
•
•
•
•
•
•
•
•
•
•
•

Invite every customer to join
Give a clear, immediate incentive to j...
Potential ROI for Loyalty
You implement a loyalty program and start communicating
with and rewarding your best customers.
...
How To Increase Business:
Get Existing Customers to Buy More Often
• Mobile & Self-serve ordering removes barriers
• Mobil...
View slides at:
http://www.coffeeshopmanager/buildcustomers

Thank You!
About Us:
Coffee Shop Manager is a leading
technol...
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Build your customer base coffee fest 2014

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The latest technology for coffee shops looking to build business and increase customers. Exploration of mobile and online ordering apps, pre-paid and gift cards, and customer loyalty. Presented by Coffee Shop Manager (www.coffeeshopmanager.com) at CoffeeFest

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  • Everyone wants to increase their business.Well, it’s no secret --- we’ve got 3 main ways to do it.First, get your existing customers to come back more often.Second, get them to spend more money on each visitAnd finally, find some new customers – and turn them into regulars.In this presentation, we’re going to explore some strategies to help you accomplish all three of these goals.
  • So .. Before you can decide the best way to get more business out of your existing customers, or to attract new customers that might enjoy your coffee shop, it helps to recognize who your current customers are. Marketers spend a lot of time talking about demographics – those factors such as gender, age, and income which help define who your customers are. For example, Starbucks and McDonalds compete in the coffee business – but they don’t tend to share the same customer base. Starbucks tends to attract older, richer customers …
  • In addition to demographic factors, marketers look at what we call “psychographics” – or personality types of their customers. For example, you may have several different types of customers that come to your shop – with different needs. Suburban moms may be looking to socialize and entertain their young kids … while commuters are looking for a quick stop on their way to work. The office assistant who is coordinating a big meeting has different needs than the young college students who are studying after class. So as you try to increase your business – consider what you are doing to target different types of customers – and how your business can appeal to them. You may not be suited for ALL types of customers, but you can try to make your shop more attractive to them.
  • Lets focus in now on our first objective – getting existing customers to buy more often. There’s 2 approaches we can take. First, we can try to eliminate any barriers that may prevent customers from visiting your shop. For example, we can try to make it as convenient as possible to choose you over someone else, or over coffee brewed at home. Of course, budget is always a constraint for customers – but we can create promotions that help to make our shop a better value than other alternatives. Health / calorie concerns may be another barrier – and many shops address this with menu options.Once the barriers are out of the way – its our job to inspire and motivate our customers to come in more often, to choose us over the competition, and to think of our shop for more possible occasions. Again we see shops approaching this with menu options – adding food … iced coffee .. Even beer and wine. We can also help with this by keeping connected to customers, communicating opportunities for ordering – like our catering or business order services - - and keeping in touch with customers through loyalty programs.
  • How can we make the purchasing experience more convenient for the customer? Factors such as location, traffic, parking – these are fairly well out of your control at this point. But some factors you do control. Speed of service, the ability to pop in and out of the shop on your way elsewhere – these are important for some – not all – of your customers.
  • So – one way restaurants in general – and coffee shops too – are improving the “convenience” factor for customers is through technology. Adding online, mobile and self serve ordering systems gives customers choices about how to order - -and helps speed up the process.
  • Why would a coffee shop adopt online or a mobile ordering app? Well - -a number of factors make these solutions right for coffee. More than just about any other restaurant experience, you have a large number of customers ordering in a hurry – on their way to work or somewhere else. So convenient, speedy ordering – even shaving a minute or too off the process- makes a big difference in the customers’ minds. Also, your customers are incredibly loyal. I’m sure you have some customers who visit just about every day. This routine makes it easy for customers to adopt the technology – if they order every day from you, it’s worth a spot on their phone for your mobile app to make ordering a bit more convenient. Another factor that drives online ordering is the complexity and customization of orders. This is why we see huge adoption of online ordering in the pizza industry – and we’re seeing a lot of cross over into coffee because customers like to be able to have their coffee JUST the way they like it, no questions asked, no mistakes. Multiply this times a meeting of 10 executives and you can see why offering online ordering makes sense especially for catering or meeting orders.
  • So lets imagine some scenarios where these technologies may come into play. Here’s one – the busy commuter who has her morning routine timed by the minute. She would like to have time to stop by and grab a latte, but if its going to take more than a couple of minutes she’ll have to skip it and get coffee at the office instead. She can place her order on her mobile app as she drops the kids off at school – and know it will be ready for her to run in and pick up without waiting in line.
  • Here’s another scenario to imagine. When a busy office is having an important meeting, online ordering makes it super easy for them to order specialty drinks customized for each person and scheduled to be ready at just the right time.
  • When customers are in a hurry - sneaking away from the office for a few minutes- mobile ordering makes it fast and easy.
  • Mobile ordering apps can also be used inside the shop – so customers can come in, grab a seat, and place their order using their own phone or tablet. They don’t have to stand in line – just wait for their name to be called.
  • For customers who don’t bring their own phone or tablet – or don’t have your app – a few tablet kiosks around the store can also help shorten the lines and reduce labor costs.
  • If you are located in an office complex, school, hospital, hotel or other busy public area – you might want to add an ordering kiosk in a public location. This brings visibility to your shop and lets customers save time by ordering – then walking over to pick up their drink.
  • If you wonder – but do my customers really want a mobile app? Here’s some more statistics for you.
  • A recent survey by the Interactive Advertising Bureau shows that consumers are jumping onto restaurant mobile ordering apps as fast as restaurants can roll them out.
  • Further results of this survey showed some reasons why consumers like these apps – of course, discounts are a big motivator. But so are loyalty points- - which we will talk more about in a minute – and the convenience of easily ordering.
  • If you wonder – but do my customers really want a mobile app? Here’s some more statistics for you.
  • The research center at the Cornell Hospitality school did a comprehensive study in 2010 of restaurants using online ordering – and found definite positive ROI results. They were able to show increased ticket averages – because customers can browse the full menu at their own pace, and not feel rushed. In the case of a coffee shop – this allows customers to choose extra shots, flavors, and other upcharge items at their leisure. More than increased ticket averages – the surprising results were that customers began ordering more frequently from restaurants that offered the online ordering. Also, customers reported greater satisfaction and loyalty to that restaurant – primarily because of the feeling of “control” it gave them. They like to be able to review their order and receive confirmation – especially with larger orders. Finally, restaurant owners reported that they found increased order accuracy – and less arguments over who made the mistake. If the customer accidently ordered something wrong, it was obvious.
  • So –earlier we were talking about one way to remove barriers & increase customer frequency. Online / mobile and self serve can do that. Any way you can improve the convenience factor . . Make customers feel part of your commmunity – and make the ordering process easier – these will all help to encourage customers to order more often. Plus, they have the added benefit of letting you increase your business without increasing labor costs.
  • So lets look back at our 3 goals. We’ve talked about how mobile and self serve technologies can increase ticket averages and get customers back more often. Now we’ll explore some more technologies to help to accomplish these goals as well as to attract new customers.
  • Lets talk about gift cards – now even more popular reinvented as pre-paid cards for your loyal customers to use. I’m going pick on the Starbucks example – because they have really set the standard for these cards especially in the coffee industry. Amazingly, 1 in 4 transactions at Starbucks in 2012 – according to their investor earnings reports – was paid for using the Starbucks card. Speculating that a Starbucks card may be one of the nation’s most frequently given holiday gifts – 1 in 10 Americans received a Starbucks card over the 2012 holiday season. The press was buzzing about the crazy idea of issuing a $450 stainless steel card – but Starbucks sold over $2 million worth in 6 minutes on luxury goods website gilt.com. Why would anyone pay $450 for a card? It was a no brainer really – loaded with $400 credit – with a $4 a day Starbucks habit that would only last you a few months – plus instant membership in their “gold” rewards level, which gets you enough free drink benefits to make up for the additional $50 pretty quickly. So, how can your shop compete with this – and offer consumers a similar value?
  • Offering pre-paid / gift cars is a great way to offer benefits to your customer – and it benefits the shop as well. For the customer, using a prepaid card is convenient. It’s budget friendly. Of course, it makes a great, easy gift for just about anyone … and it helps customers feel like they are part of the connected community that is your shop. Most of all – purchasing cards often gives customers extra value –with promotions that encourage card purchase.Keep in mind, when we are speaking of gift cards, we usually think of the plastic cards that you carry in your wallet or on your keychain. But nowadays we can also issue “virtual” cards which are tied to a customer’s phone or email, so you don’t necessarily have to issue cards.
  • For your shop, gift cards or pre-paid accounts offer a number of benefits. They bring in new customers- especially when given as a gift or promotion. If you can encourage more customers to use cards - - you can dramatically reduce your credit card fees. They are great for promotions and they also help with your marketing, because you can now track your customers and find out who is buying – and how often.Because customers pay up front for cards, you enjoy a cash flow benefit – and some cards will never be fully redeemed. Cards offer you improved customer loyalty, because customers who have your card are not likely to stray to the competition – and they are a great branding reminder for your customer to carry around.While you do have the cost of the physical card – which can very from $.25 to $.50 per based on the quantity you order – you should look for a no-fee card program tied to your POS system so that you don’t have to pay any processing charges on your gift cards.
  • Gift cards are great to use for promotions and marketing. Here are just a few ideas of how to use your gift cards.
  • Lets walk thru an example of the Return on Investment for a card giveaway program. If you were to go to a local business or community event and give away 500 free $5 gift cards to attract new customers.Your cost on the card redemptions would not be $500 x 5 - $2500. Instead, at what the small business administration says is the typical coffee shop gross margin of 85% -- your actual cost would only be $375.Then, add the cost of the cards – lets guess 35 cents per – at $175So your total cost is $550 if all the cards are redeemed at full value.Now lets look at the value of just 1 regular customer.If you have a customer that spends $4.50 three time a week . . 50 weeks a year – that’s $657 in sales. With your gross margin, that works out to $573 in additional contribution to the bottom line.So ..with a 500 card giveaway, it takes just 1 new customer to break even. Any other new trials that become regulars are even more profitable.
  • So, once a customer tries your shop once – how can we get them to become regular customers? Loyalty programs are the single fastest growing technology adoption in the restaurant industry as a whole – and for good reason. They work! Consumers increase their visits by 35% once they join a loyalty program. So if you had a customer who visits once a week – 52 times a year, a loyalty program would theoretically at 17 visits a year to your bottom line – or around $65 per customer. Customers also say that they WANT to receive emails and other communications as part of the loyalty program. They are asking for you to keep in touch, and to offer them incentives to keep coming back. With the high gross margins in the coffee business, it make sense to offer the occasional “Bring a friend for a free latte” offer (buy one get one free) to your loyal customers.Speaking of friends, 65% of your customers will recommend you more often if you have a rewards program. When you add referral bonuses, community affiliates, social media integration and other techniques for boosting referrals – a loyalty program can be a huge contributor to attaining new customers.
  • This author – Sarah Robinson – is an expert in building loyalty for brands. She boils it down to 2 simple principles to increase loyalty among your customers.First – make them happy.Second – create a community.Sounds simple enough, right? She says - “The number one thing that influences our feelings of happiness, pleasure or money – is the experience of meaningful engagement and connection.”She also shares some practical tips.First – you need to make the experience personal. You already try to do that with friendly, in store service. A loyalty program helps make things even more personal, because once you’ve identified your customers, you can communicate with them, you know what they like – and how often they buy. Treat your loyal customers differently. All are not equal in this world. Loyal customers do deserve extra perks. You can give them special treatment – maybe they get a free flavor or upsize once in a while – or they get invited to special events, or free samples of your newest beans – things that make them feel like they belong to your exclusive club.Make it formal – a formal loyalty program puts structure around how this all works and helps you to define how you will treat your best customers.Give customers a reason to join NOW. Your new customer may not be sure if they are coming back – so they may not want to join. But now is your only chance to capture them and give them a reason to come back.
  • Research shows that you have a 30% chance of turning a first time visitor into a long term customer.BUT, that chance increases to 67% if you can get them to purchase 3 times relatively quickly. Habits are formed.So . . When forming a loyalty program that means you want to get people signed up immediately and then use the power of the program to get them back in right away. For example, you may want to offer an incentive to join now – “Get a free upsize if you join our loyalty program today” and then an incentive to return --- “we’ll email you a free latte with purchase” . Right away they have motivation to join and a good reason to come back again.
  • So – how do you start a loyalty program?We are all familiar with the most basic & common program – the buy 10 get 1 free punch card. The disadvantage of these programs is that they don’t offer you any customer intelligence – you don’t know who your customers are or how to reach them.These punch cards are being replaced by electronic systems which are integrated to your POS system … and your gift cards, so purchases are automatically tracked. This lets you offer more sophisticated reward options based on different products purchased.
  • Beyond this basic loyalty program – you have a bit more sophisticated options. If you have multiple locations, it is important to consider how they program will work across all your stores. Do you want to issue plastic cards or punch cards – or go with an entirely mobile-based program? Most importantly, do you want to take the important step of adding outbound communication to the customer – so you can keep in touch with them and remind them to return! You might do this via e-mail or text message …
  • Remember this statistic - -69% of customers wish to receive emails from your loyalty program. Once they’ve joined – they feel that they want to stay in touch. Having the power to email your customers gives you a lot more options to build your sense of community. You can remind customers about their point balances and rewards .. But also you can share details about your products, new items, your philosophy, how you went on vacation to check out the places your coffee comes from - -all the unique stores that make your shop truly special. You can also surprise customers with extra treats now and then to make them feel special. Let them know about “off menu” items that are only available in a limited quantity. Of course, this also lets you bring customers back immediately after sign up – with a special welcome offer … and you can also revive customers who haven’t visited in a while
  • We mentioned text messages as a way to communicate to your loyal customers. While some people may shudder at the thought of “commercial messages” via text, studies show that younger people especially are happy to receive offers via text. Marketers are eager to adopt text messaging into their loyalty programs because of the incredible reach power – 95% of text messages are opened (so much higher than email!) and 83% of those within 1 hour of sending! There is no more immediate and powerful communication tool to reach your customers!So – some ideas for incorporating SMS into your loyalty program. First, of course, is offering a text to join option. Customers just text the word JOIN to your # and they are signed up – super easy and no work for you.Then, you can send communications via text – including any reward offers once a customer has earned a reward. Customers love the fact that they don’t have to carry a coupon around – they just have the reward loaded right on their phone.Bottom line – if you give your customers a choice of signing up via text OR email to join the loyalty program – you’ll be catering to their preference.
  • Ok to summarize, here is a list of 11 best practices for loyalty programsMake sure that you invite every customer to join. This can be done thru in-store signage, multiple ways to sign up, and by training your staff to ask.Give an immediate incentive to join – something the customer gets right now – as well as a future incentive – a welcome gift.Tie your loyalty program into your pre-paid card program – so customers can get benefits from using their card. Make sure that you capture a way to communicate with your customers.Customers prefer a clear point formula that lets them know how to obtain rewards – so make the rewards program clear.Customers also love “surprise & delight” programs – so supplement your fixed rewards so that they can get surprises once in a whileYou don’t always have to give your customers drink or food rewards. Think about making them part of the community. Maybe a shirt, a coffee mug – an exclusive product or an invitation to an event is a good way to spice up your program. Keep in touch with your customers – you can communicate via email or textUse your loyalty program as a way to gain referrals – build in social sharing through facebook and twitter and ask your loyal members to refer their friends.Use survey features to gain feedback from your customers Expand your loyalty program to serve the community with an affiliates type program – this would allow members to affiliate with a community organization and have their spending help that organization with a donation or contribution.
  • Wrap up time -- In this seminar we tried to address 3 ways to build your business – and some of the latest technology tools to do that.First – get existing customers to buy more often. We talked about removing barriers to convenience through mobile & online ordering . . . And using loyalty programs to turn 1st time customers into regular customers – and make regulars come back more often.2nd – Increase ticket averages. We know that online & mobile ordering options are proven to increase ticket averages - - offer increased business orders. We also know that pre-paid cards can increase spending.3rd – Attract new customers. Here gift cards / pre-paid cards are a great promotional tool. Loyalty programs help turn these customers into regulars – and also help build your referral business.I hope these tips will help you explore the new technologies that are available to build your business.
  • Thank you! If you are interested in learning more about any of these topics, please visit us at booth # 304 and be sure to enter our free POS Giveaway.
  • Build your customer base coffee fest 2014

    1. 1. Build Your Customer Base! Technology Tools To Help CoffeeFest 2014 www.coffeeshopmanager.com
    2. 2. How To Increase Business: Get Existing Customers to Buy More Often Increase Ticket Averages Attract New Customers > Regulars CoffeeFest 2014 www.coffeeshopmanager.com
    3. 3. Who are your customers? Starbucks: •8.3% More Female •35 – 44 age •>$60,000 per year •“Urban Commuter Family” •College-Educated •Dual-income household McDonalds: •18-34 age •<$60,000 per year •“Struggling City Centers” Source: http://www.time.com/time/business/article/0,8599,1702 277,00.html#ixzz2LMl8cIVl CoffeeFest 2014 www.coffeeshopmanager.com
    4. 4. Who are your customers? Suburban Moms Commuters Office workers on breaks Company meetings Young friends Independently Employed Can you attract more of any of these groups? CoffeeFest 2014 www.coffeeshopmanager.com
    5. 5. Getting Customers to Buy More Often Eliminate Barriers • Convenience • Cost • Health / Calories Inspire / Motivate • Feel connected • Communicate opportunities • Reminders & Rewards CoffeeFest 2014 www.coffeeshopmanager.com
    6. 6. Convenience 50% of consumers surveyed had turned away from a restaurant due to long lines in the past year. CoffeeFest 2014 www.coffeeshopmanager.com
    7. 7. Convenience Coffee Shops are using technology to give customers options: •Online Ordering •Mobile Ordering •Self-Serve In Store 37.5% of Fast Casual restaurants now offer online ordering CoffeeFest 2014 www.coffeeshopmanager.com
    8. 8. Does Online/Mobile Ordering Make Sense for Coffee? Customers ordering on-the-go Convenience is important Ordering Part of Daily Routine Long Lines can occur during busy times Strong Customer Loyalty Highly customized orders Complex orders for groups / offices CoffeeFest 2014 www.coffeeshopmanager.com
    9. 9. Picture This: Suburban commuter places order on smart phone after she drops kids off at school. She swings by the coffee shop next. Skips the line, grabs her waiting latte and is on her way to work with no delays. CoffeeFest 2014 www.coffeeshopmanager.com
    10. 10. Picture This: Office Assistant plans ahead for today’s executive meeting. She goes online to place the exact drink orders that each manager likes, timed to be ready to pick up at 10:00. When the time comes, she runs downstairs to grab her waiting order. CoffeeFest 2014 www.coffeeshopmanager.com
    11. 11. Picture This: Colleagues leave the office for a 10 minute break. They have just enough time to walk 3 blocks to your shop – so they place their order on their phones as they walk & pick it up when they arrive – no waiting. CoffeeFest 2014 www.coffeeshopmanager.com
    12. 12. Picture This: A group of friends enters your busy shop and sees a long line. Instead of waiting to order, they grab a seat on the couch and pull out their tablet. Here they can comfortably place their order without delay. CoffeeFest 2014 www.coffeeshopmanager.com
    13. 13. Picture This: Long lines during a busy time turn off a would-be new customer. They turn to your self-serve ipad Kiosk where they can place an order without waiting. You can spend less on cashier labor and sell more coffees. CoffeeFest 2014 www.coffeeshopmanager.com
    14. 14. Picture This: Thousands pass thru your building’s lobby every day, but may not stop in your shop around the corner. A freestanding order kiosk grabs their attention. Customers place their order, then stop in to pick it up on their way in or out. CoffeeFest 2014 www.coffeeshopmanager.com
    15. 15. Mobile Fact: Worldwide, more people own mobile phones (4.2 billion) than toothbrushes! (3.5 billion) YIKES! CoffeeFest 2014 www.coffeeshopmanager.com
    16. 16. Mobile Demographics VS. Who Owns SmartPhones? Who Drinks Coffee? •45% American adults •68% of those making > $75k •61% of those college educated •66% of those age 18-29 •49% suburbanites •75% American adults •62% of those making > $50k •40% of those age 18-24 •54% of those age 25-30 Source: http://www.experian.com/blogs/marketing-forward/wpcontent/uploads/2010/08/american-coffee-drinkers-05.jpg; http://www.ncausa.org/files/Market%20Research/NCDT2012_free_d ownload.pdf; http://pewinternet.org/Reports/2012/SmartphoneUpdate-Sept-2012/Findings.aspx CoffeeFest 2014 www.coffeeshopmanager.com
    17. 17. Consumer Use of Restaurant Apps 69% Consumers surveyed have used mobile internet to place a food order Have downloaded at least one branded, individual restaurant app 50% Source: http://www.iab.net/mobilemeals CoffeeFest 2014 www.coffeeshopmanager.com
    18. 18. Why Use A Coffee Shop App? 78% 54% 26% Order Discounts Loyalty Points An Easy Way To Enter An Order An Easy Way To Find A Shop 64% 37% Easy Recall of Past Orders Source: http://www.iab.net/mobilemeals CoffeeFest 2014 www.coffeeshopmanager.com
    19. 19. What Type Of App VS. General App • Such as Snapfish, GrubHub, SquareUp • Lists you along with competitors • Can help new customers find you. • Competitive promotions may lure your customers away • Often paying for every order • If you use it, don’t promote it to your customers. Branded App • Promotes loyalty to your shop • Increases customer frequency • Less about new customers • Less likely to charge per order • Occupies real estate in the “virtual landscape” of the phone – with your branding CoffeeFest 2014 www.coffeeshopmanager.com
    20. 20. Proven Results of Online/Mobile Increased Ticket Averages • Customers can browse the full menu • Easily promote upcharge items like extra flavors or shots • Customers are not rushed to place their order Increased Order Frequency • Customers appreciate convenience Increased Customer Satisfaction • Customer enjoy “control” • Easy / separate pick up of orders • Double check and verify large orders Increased Order Accuracy • Customers order correctly; accountable for mistakes Source: http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstr act-15779.html CoffeeFest 2014 www.coffeeshopmanager.com
    21. 21. Removing Barriers Online – Mobile – Self Serve • Improves convenience & speed • Attracts potential new customers • Expands ability to serve businesses • Allows for complex / plan ahead orders • Increases loyalty / branding on the phone • Makes customers feel “connected” • Puts power in the customer’s hands • Reduces labor costs at the shop Source: http://www.iab.net/mobilemeals CoffeeFest 2014 www.coffeeshopmanager.com
    22. 22. Potential ROI for Online & Mobile Mobile App: • 100 regular customers order one more time per week because of the convenience • Weekly revenue boost: $450 Yearly: $23,400 Online Ordering: • 5 local businesses start ordering weekly for their manager’s meetings. • Weekly revenue boost: $180 Yearly: $9360 CoffeeFest 2014 www.coffeeshopmanager.com
    23. 23. How To Increase Business: Get Existing Customers to Buy More Often • Mobile & Self-serve ordering removes barriers • Mobile ordering increases frequency Increase Ticket Averages • Online & mobile ordering proven to increase • Increase business orders Attract New Customers CoffeeFest 2014 www.coffeeshopmanager.com
    24. 24. Gift / Pre-Paid Cards  1 in 4 transactions use the Starbucks Card in 2012  Schultz: “The Starbucks card may be the nation’s most frequently given holiday gift”  1 in 10 Americans received a Starbucks card holiday 2012  $2 million worth of $450 stainless steel cards sold out in 6 minutes on gilt.com Why are they so popular? How can your shop benefit? Source: http://blog.unibulmerchantservices.com/why-is-starbucksthe-u-s-leader-in-mobile-payments-and-prepaid-cards/ CoffeeFest 2014 www.coffeeshopmanager.com
    25. 25. Gift / Pre-Paid Accounts Customer Benefits: • • • • • Convenience: Purchase without wallet Budget: Pre-load card to track spending Gifts: Easy gift for co-workers, family, friends Connection: Feel part of the club, personalized service Value: Often cards give extra benefits / loyalty perks Accounts can typically be connected to a plastic card, keychain card or just to a phone # / e-mail CoffeeFest 2014 www.coffeeshopmanager.com
    26. 26. Gift / Pre-Paid Accounts Shop Benefits: • • • • • • • Brings in new customers Reduces credit card fees if more transactions done on cards Great opportunities for promotions Track customer spending & behavior for marketing Cash flow benefits Improve customer loyalty Great branding opportunities Look for a no-fee program connected to your POS system. CoffeeFest 2014 www.coffeeshopmanager.com
    27. 27. Promotion Ideas • Hand out “Free Drink On Us” at community events, local businesses, people on the street. Give employees cards to hand out too. • Give a free treat with card purchase. $25 for $20 or a Free Drink with $20 load are popular. • Gift a friend – Buy a $20 gift card, get another $5 one free • Use on social media – thank posters for nice comments, or sponsor a contest • Give cardholders a bonus – free flavor shot, free wi fi, etc. • Community Outreach – give to school auctions & new neighbors • Gift your VIP customers – load a little extra on their account Download our free guide @ www.coffeeshopmanager.com! CoffeeFest 2014 www.coffeeshopmanager.com
    28. 28. Card Giveaway ROI 500 Free $5 Cards to attract new customers Your Cost: •$5 = (typical gross margin of 85%) = $.75 x 500 = $375 • Cards @ $.35 each = $175 •Total Cost = $550 if all are redeemed at full value. Value of 1 regular customer • Average $4.50 sale x 3 per week x 50 wks per year = $675 in sales • Net Gross Margin = $573 It just takes 1 new customer to break even! Source: http://www.sbdcnet.org/small-business-researchreports/coffee-shop-2012 CoffeeFest 2014 www.coffeeshopmanager.com
    29. 29. But What If . . . 500 Cards Issued / $550 in Cost • 5% (25 customers) become 1x-a-month regulars: $1350 per yr. • 3% (15 customers) become once-a-week regulars: $3510 per yr. • 1% (5 customers) become 3x a week regulars: $3510 per yr. • Total new business value (after promo costs): $7,820 per year CoffeeFest 2014 www.coffeeshopmanager.com
    30. 30. Potential ROI for Pre-Paid Cards • Customers buy your Pre-paid card special “Free Latte” with $40 card fill. • 100 cards sold: Your $35 card cost plus $75 cost for the lattes • $100 in processing fees saved when customers use cards instead of credit • 5% of card value are never redeemed ($200). Your Net: $190. Repeat weekly for $9880 per year savings CoffeeFest 2014 www.coffeeshopmanager.com
    31. 31. Loyalty: Power Up Your Program! 35% Consumers estimate their visits increase once they join a restaurant loyalty program Wish to receive emails as part of the rewards program with offers for items they order 65% 69% Say they recommend to friends more often if restaurant has a rewards program Source: http://loyalogy.com/2014/02/the-tasty-littlerestaurant-loyalty-fact-book/ CoffeeFest 2014 www.coffeeshopmanager.com
    32. 32. Customer Loyalty Make them happy Create a community “The number one thing that influences our feelings of happiness, pleasure or money – is the experience of meaningful engagement and connection.” 1.Make it personal 2.Treat your loyal customers differently 3.Make it formal: Start offering a loyalty program 4.Give your one-time customers a reason to join NOW CoffeeFest 2014 www.coffeeshopmanager.com
    33. 33. Turning 1st Time Visits Into Loyal Customers 30% Chance that a 1st time customer has of becoming a long-term profitable customer Chance of becoming a long-term profitable customer IF they purchase 3 times quickly 67% Get a free drink upsize if you join our loyalty program today, and we’ll e-mail you a coupon for a free latte with purchase on your next visit Source: Loyalty Magic CoffeeFest 2014 www.coffeeshopmanager.com
    34. 34. Loyalty Basics Basic Buy 10 get 1 Free punch card program • Card punch programs replaced by electronic systems • More sophisticated reward options for different products purchased • CoffeeFest 2014 www.coffeeshopmanager.com
    35. 35. Loyalty : The Next Level • Systems work across multiple stores • Allow for cards or based on customer e-mail or phone # • Incorporates outbound communications to the customer • Includes e-mail &/or text messaging CoffeeFest 2014 www.coffeeshopmanager.com
    36. 36. Loyalty : Communications 69% Wish to receive emails as part of the rewards program with offers for items they have ordered Communication opens the door to: • Make customers feel like part of your community • Remind customers of details of the rewards program • Share details about your products / shop / philosophy • Surprise customers with extra incentives • Bring new customers back with a welcome offer • Revive lost customers CoffeeFest 2014 www.coffeeshopmanager.com
    37. 37. Loyalty : “Hidden Menus” Hidden Menus: • Make loyal customers feel “in the know” • Help customers bond with staff • Makes brand / shop seem “cool” • Especially resonates with Millennials • Promote thru social media & loyalty programs • Use QR code in store to access CoffeeFest 2014 www.coffeeshopmanager.com
    38. 38. Text Message Marketing 50% Consumers age 18-30 are “happy” to receive offers via SMS (text) Of text messages are opened; 83% within 1 hour 95% Incorporating SMS into Your Loyalty Program: • Text to Join • Send reward messages via Text • Consumers don’t have to carry a coupon – reward is loaded on their phone Give consumers a choice of e-mail or text as their preferred communications Source: http://contentmarketinginstitute.com/2012/01/whysms-is-a-must-for-a-younger-audience/ CoffeeFest 2014 www.coffeeshopmanager.com
    39. 39. Loyalty Program Best Practices • • • • • • • • • • • Invite every customer to join Give a clear, immediate incentive to join Tie to pre-paid account / card option Capture customer email and/or mobile # Make points formula clear Supplement with “surprise & delight” Add recognition and VIP Perks – events / swag / etc. Keep communicating with customers via email or text Encourage social sharing & referrals Gain feedback from your customers Community involvement through affiliates CoffeeFest 2014 www.coffeeshopmanager.com
    40. 40. Potential ROI for Loyalty You implement a loyalty program and start communicating with and rewarding your best customers. • 500 customers join and increase average frequency from 3 visits a month to 4. • 500 Additional Visits = $2250 per month = $27,000 per year CoffeeFest 2014 www.coffeeshopmanager.com
    41. 41. How To Increase Business: Get Existing Customers to Buy More Often • Mobile & Self-serve ordering removes barriers • Mobile ordering increases frequency • Loyalty encourages frequency Increase Ticket Averages • Online & mobile ordering proven to increase • Increase business orders • Pre-paid cards increase spending Attract New Customers •Pre-paid / gift cards bring new customers • Loyalty programs help turn them into regulars CoffeeFest 2014 www.coffeeshopmanager.com
    42. 42. View slides at: http://www.coffeeshopmanager/buildcustomers Thank You! About Us: Coffee Shop Manager is a leading technology provider to the coffee industry. We offer point-of-sale with integrated online, mobile and self serve ordering, as well as a robust loyalty marketing solution. Please visit us in Booth #327 to see Coffee Shop Manager in action! CoffeeFest 2014 www.coffeeshopmanager.com

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