Have you ever wondered how Starbucks is so successful? Is it the atmosphere? Perhaps the quality drinks? Or is it just a habit? No matter what the answer is – if you own a coffee shop or small restaurant you need to keep Starbucks business model in mind if you want to succeed!
Obviously at this point Starbucks has been around long enough that customers continue to purchase their coffee and breakfast there out of sheer habit. Your job is to break that habit. So … how can you do this and bring in all of the customers that you have been missing?
First of all make sure that you are offering a high quality product and an atmosphere that people will find aesthetically pleasing. If your place of business is not at least clean and comfortable then you will not entice any customers to return. Now that you know your customers will be comfortable shopping with you – lets find some new clients ….
The most difficult part of owning a small business is to bring in new customers. Instead of wasting your time advertising in the yellow pages or on the radio use a gift card program and a tragted mailing list to bring people in the door! Set up a plastic gift card program. (You do know that Starbucks has one ….) Put together a targeted mailing list of potential clients based on the demographics that would fit into your business. Then send each one of these clients a gift card with a pre-set value to bring them in the door.
For example: The typical Starbucks drinker has an income over $ 50,000. So, use a list broker (you can find one on the internet fairly cheap) to generate a list of all households within a 10 mile radius of your business with a certain income level. Load $ 5 onto 250 gift cards as a test run and mail them to these potential clients. I can guarantee that you will receive at least 40% of these cards back in your shop! (Very few people can resist getting something for nothing!) So – you just bought 100 new customers in the door.
How much does this cost you so far? $ 102.50 in postage, The price of the plastic cards – about $ 100 worth of plastic, plus $ 5 loaded onto the card for a total cost $ 7.03 per client. Now ask yourself: how much would it have cost me to bring in 100 new clients through yellow pages or a radio commercial? Ten times this amount? Maybe twenty.
So now that these clients are in your store, how do you keep them coming back? The simplest way is to offer a discount on leads of the gift card. Think about it – Starbucks sells gift cards and people pay full price, then they keep coming back every day to spend some of the money on their cards. If you offer a 10% discount on gift card rests of at least $ 50 – then you are guaranteeing that these people will continue to come back in to your business. Even if they do not you will make an extra profit on the money that they have not spent!
Want to take this program a step further? Implement a rewards program on your gift cards. Every time the client spends any money in your store they get a reward. For example: for every dollar spend they earn 5% back on their card, when they hit $ 50 in sales they now have a $ 2.50 credit on the gift card! You are giving them more incentive to continue to see you every morning!
There are certainly more ways to use a plastic card program to help you compete with other businesses: Give away gift cards to charities, send a card to your best customers every quarter, and dozens more. Your gift and loyalty card provider will help you brainstorm some ideas that may work for your business!