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Friday, February 24, 2006
Tuesday, February 21, 2006
Getting the Word Out
Okay, everybody. You've inspired me. Let's talk advertising.
As I mentioned in these pages before, I'm not exactly the business type. I've never studied marketing or budgeting. I am not a PR person. And I hate worrying about money. Still, as one of the owners of this small business, at some point I have to start thinking about how we can increase our business, especially during our lightest hours.
Up to now we've relied almost exclusively on word of mouth and foot traffic. During the first week we were open we handed out fliers and hung notices on door knobs, but that's about it. In many ways, this approach has worked well for us because it has provided a chance to grow with our customer base. If we had been inundated with customers during our first few months in business, I don't think we would have been able to provide the same level of service. We needed that time to work out the kinks in the system.
Now that we are ready to grow, however, it's time to start doing some "real" advertising. But where? How much? And at what price?
Taking a look back at our business plan, we originally identified four target audiences for CTTP: people who live in the neighborhood, tourists, students, and people who work from home (i.e. the laptop brigade).
So far, I think we are doing a fairly good job of recruiting customers from the neighborhood. Just by virtue of location and signage people are apt to try us out eventually and, if they like us, come back. However, there are still a lot of people who don't know that we now serve breakfast, soups, and sandwiches, so we need to work on advertising our food offerings. Our current plan for reaching this group is to place an ad in the Haight-Ashbury Beat.
We don't intend to put a lot of effort into advertising to tourists. For the most part, this group finds us when they are walking down Haight Street soaking up the local atmosphere. If we get lucky, maybe somebody will write something about us in a tour guide one day, but that's about all we can hope for.
One of our primary target audiences is students, but we have yet to do much to attract their attention. This point was (painfully) brought home to me a couple of weeks ago when I looked in my own school paper, UCSF's Synapse, and discovered that one of my classmates had written an article about places in SF where one can find fair trade coffee, but didn't include CTTP. Apparently, she didn't even know that we existed. Our current plan for reaching this group is to advertise in the campus papers at UCSF, USF, and SFSU.
Our final target audience consists of people who work from home and, again, this is a group we have yet to actively pursue. We have received a certain amount of free advertising from the websites that list free wifi hotspots so anyone who is actively looking for a place will find us, but I'm not sure that is adequate. I would like us to do more to reach this group, but I don't know how at a price we can afford. Some people have suggested advertising one or more of the city's weeklies, but those are expensive and not the least bit targetted.
What do you think? Does anybody have any brilliant low-cost marketing ideas that would help us get the word out to our target audiences? Are there groups out there that we should be marketing to that we haven't considered yet? Should we bite the bullet and advertise in the weeklies?
Any and all input greatly appreciated.
Wednesday, February 15, 2006
Coffeeshop Campers & the Honor System
One of the first decisions any coffeeshop owner has to make is what to do about the people who hang out all day studying, using the free wireless, and lounging on the couches, but don't actually spend any money. Sure, they spend $1.50 on a small coffee from time to time, but they nurse it for hours and take up room that might be used for other, paying customers.
If you're not a coffeeshop owner you might think that this is no big deal. After all, it's not like the person is using up costly products. They aren't eating free food or drinking free beverages. It doesn't cost any more to provide ten people with wireless than it does to provide one. And, they aren't using up a bunch of dishes that then have to be washed.
But, from the perspective of a coffeeshop owner, this is a huge problem. Here at CTTP, we need to bring in on average $100 PER HOUR simply to cover our costs. That means, if all of our customers were people who stayed for three hours and spent $1.50 for coffee, we would require 200 people in our shop every hour we were open, 7 days a week, just to stay in business.
Fortunately, not all of our patrons are quite so thrifty. We have lots of customers who buy more than a small coffee and many of them just drink (or eat) and run. We even have a large contingent of people who get their coffee and food to go. Nonetheless, at this juncture, our paying customers are not making up for the money our other customers don't spend, and this is a concern for us.
We have looked around a lot at how other coffeeshops deal with this problem and, for the most part, we aren't impressed. One strategy frequently employed is to disconnect the free wireless. Another strategy is to require a minimum purchase for every hour spent in the store. Some places even cover their electrical outlets, so people can't plug in their computers.
We can't imagine using any of these strategies at CTTP because they are fundamentally at odds with the spirit of our shop. When we opened our doors we wanted to be a warm, inviting, and inspirational space where people could come to get their work done, hang out with friends, and drink great coffee. Putting restrictions on what people can do while they are here would undermine that mission.
Beyond that, CTTP is well aware that the people who come to our shop represent a wide range of socioeconomic strata. Some are students living off of loans. Some are professionals. Some are homeless. Some are middle class American tourists visiting from out of town. Some are parents. And some are seniors living off of fixed incomes. As a result, there is a great diversity in what our patrons are reasonably able to pay for our services.
Since the last thing we want to do at CTTP is restrict who can and cannot come to our shop on the basis of income, we are determined not to introduce a mandatory minimum. However, that doesn't mean we can't expect our better-off customers to contribute their fair share of our revenues. For now, we are working off the honor system, trusting our patrons to do the right thing.
Which brings us to the question, what is a reasonable amount for us to expect a person to spend at our shop? After some thought, it seems to me that if every student or senior spent $3/hr, every working person spent $4/hr, and every professional spent $5/hr, we would be a lot closer to meeting our monthly costs without placing an undue burden on our customers.
What do you think? Do you have any ideas for addressing the freeloader problem that are in keeping with the spirit of CTTP? How much do you think is reasonable for a person in your situation to spend per hour spent at the shop?
Postscript: Right after I posted this blog entry, I stumbled across a post by one of our regulars, Kevin Burton, on the subject of free-wifi in coffeeshops. He makes some terrific points about how businesses should stop trying to discourage laptop users and start offering them other useful paid services to defray overhead costs. I think this is a great idea, but I would like to hear some suggestions about how to do this at CTTP while still remaining accessible to our lower income clients. What kinds of services could CTTP conceivably offer that would be of value to the laptop brigades?
Friday, February 10, 2006
Maintaining a regular blog can be difficult (especially when you are also trying to run a coffeeshop, go to medical school, practice law, and raise three kids). Still, we know we haven't been doing a great blogging job in recent months and we want that to change.
Ideally, we want this page to not simply chronicle events at Coffee to the People, but also provide a space where we can conduct a running dialogue with you, our customers, about how best to run our shop. Starting next week, we plan to post weekly commentaries on topics relevant to management of our coffeehouse. We hope that you will read these brief essays and respond with questions, thoughts, and advice of your own.
So, why might you want to take time out of your busy life to contribute to these discussions? Three reasons:
1. You want to improve the Coffee to the People experience for your own enjoyment. This is your coffeeshop and no one knows more than you about how to make it better.
2. You want to make sure Coffee to the People stays in business. People are always surprised to hear this, but despite the popularity of our shop, we still are not quite covering our costs from month to month. Your input will help us make the changes we need to make to keep our business afloat.
3. You want to open a coffeeshop of your own one day. Since we opened CTTP a surprising number of people have confessed to us a secret desire to open an independent shop of their own one day. We think that is great. The world needs more community coffeehouses. If you are one of those people, reading and contributing to this blog is a great way to begin cultivating your coffeeshop ownership and management skills.
Before we opened CTTP we did a lot of research about the coffee business. Nonetheless, with every day that passes we encounter a new problem or challenge that we didn't forsee. Often these problems are peculiar to life in the Haight, such as handling mentally ill, homeless, and drug intoxicated patrons. Other times, however, they are problems that are just a part of doing business, such as coping with unreliable suppliers, absentee employees, and freeloading patrons. We look forward to hearing your suggestions for dealing with these and other challenges over the coming months.
Monday, February 06, 2006
Soup and Sandwich Beta
It's finally here! After many hard months of taste testing, we have introduced our fresh sandwich and soup menu. Our sandwiches are big and tasty, with selections guaranteed to please omnivores, vegetarians, and vegans alike. They include:
Breakfast croissant with egg and cheese
Breakfast bagel with egg and cheese
Roast beef with horseradish
Black forest ham with cheddar cheese
Turkey pesto on a sweet roll
Vegetarian bruschetta, cheese, tomato, and avocado
Vegan hummus, red pepper, and cucumber
The soups change from day to day, but recent offerings have included:
Tomato tahini tofu
Mushroom and barley
As with our coffee, we are committed to providing the best possible soups and sandwiches. To help make this happen, we are holding a "soup and sandwich beta" throughout the month of February. To participate, come in and try one of our soups or sandwiches and then email us about your experience. As a thank you, we will send you a coupon for a free beverage of your choice. Our hope is that your honest feedback will help us to make our sandwiches even better.