Selling Coffee Next To Starbucks: Get Your Marketing For Free And Reap Record Profits
July 18, 2008 · Print This Article
We don’t know about most of you, but we grew up in a small town. There wasn’t even a stoplight, just a flasher, and even that was big news. As you might imagine, this has led us to fear most things corporate and big box—our general store (this was in the 90s, we swear) closed down for good when the new Super Wal-Mart rolled in to town 7 miles away.
But, dear small business owner, not every time you see the well-financed competition coming in to town, does it mean that you’re doomed to either sell out or shut down. With a little marketing ninjitsu, you can use their presence to reap record profits and cut costs like never before. How? Learn From Starbucks
Why Starbucks Is Good For Mom And Pop
Starbucks has, despite the announcement that they’re cutting 7% of their workforce, turned into the McDonald’s of coffee. They completely revolutionized a business that hadn’t seen a corporate competitor, and built their brand out into every corner of America, to the point that you can walk in a mom-and-pop coffeeshop and hear “Well, this is what I get at Starbucks…” from customers who have had their tastes driven by the chain. That’s bad, right?
Not so much. As it turns out, in practice what Starbucks has done is get everybody used to paying north of $1.50 per cup of coffee. That’s good because it raises your profit margins. They also succeed in driving business to their location because of their fantastic brand recognition. That’s good because it brings new business to your area: yes, they can poach your customers, but they also substantially grow the base. And here’s the key: that base comes to a location wanting coffee. Starbucks got them there, but once they’re in a place and wanting coffee, any will do—so in addition your local holdouts, expect the overflow from Starbucks (or your appropriate evil giant) to come your way during peak hours, or if that rarest of American creatures, an adventurous consumer, rears its head.
We know, it sounds counter-intuitive. But the numbers don’t lie: from 2000 to 2005, the number of mom and pop coffeeshops grew by 40% . Find a competitor’s strength, and turn it into a weakness.
Comments
Got something to say?
You must be logged in to post a comment.