The Ten Guerilla Marketing Ideas About Running a Coffee Shop

I find it is valuable to analyze some basic marketing advices using the retail value proposition formula. For example, let's try to understand the key success factors for the small coffee shop, The Roasterie, in Kansas City in order to create customer loyalty and generating excitement inside the store.

The following ten ideas are coffee store specific, many can be applied to teashops and coffee and tea departments as well.

Experience

1. Have a contest among your customers to create a coffee (or tea) blend for your store. To create continued interest, make it monthly or quarterly and let the customer name the blend.
2. Hold a contest to name your house drink.
3. To encourage whole bean (or loose-leaf tea) sales, help your customers create their own blend and keep the recipe on file for them.
4. Feature an origin once a month and incorporate it into drinks, special desserts and so on. Provide pamphlets for customers explaining it.
5. Offer free coffee grounds for your customers' gardens.
6. Train your staff to remember customers' names. Give inexpensive or fun prizes for those who can remember the most in a row.

Convenience

7. Store "frequent buyer cards" at your store as a convenience for customers.
8. Create an "order hotline" so your customers' drinks are ready when they walk in the door.

Selection

9. Hold coffee (or tea) rituals from different countries within your store or department.

Price

10. Offer your product to area TV and radio stations as a giveaway for a contest they are running.

Beyond these advices, Danny O'Neill, president and owner of The Roasterie in Kansas City believes that "Marketing is one of those things most of us know about, but we don't do. It seems too corporate." "Guerilla marketing," he added, "is those things you do to get your name out there without spending any or a lot of money."

Thus, these advices mostly focus on creating unique customer experience and less on price competition. Applying them every day, The Roasterie successfully differentiates itself from rivals, better targets specific customers, and is profitable!

Wal-Mart to Wal-bank?

Wal-Mart’s recent interest in providing financial services to its customers at its 3000 plus retail stores has been blocked by the House of Representatives, which passed the banking regulatory relief bill H.R. 1375. The company’s previous attempts to buy some small US banks like Franklin Bank of California were also blocked. Now the company is asking permission to establish an industrial loan company (ILC), which is not a traditional bank as ILCs are not allowed to take deposits, grant loans and setup branches for 3 years. But once the 3 year period has expired, there is a loophole through which Wal-Mart could provide financial services to its customers. The ILC can however handle debit card, credit card electronic transactions, and therefore save millions of dollars that Wal-Mart has to pay 3^rd party providers of these services.

This is causing much worry to the hundreds of community banks in the US, which cannot compete on price with a giant like Wal-Mart, just like small retailers cannot compete with Wal-Mart on price. Traditionally, financial institutions have not competed fiercely on price, and could have a distinct disadvantage against Wal-Mart in terms of cost of providing banking services. Wal-Mart already has the prime real estate and convenient

locations across the US, and could easily house its bank’s branches inside the Big Box format stores. Some analysts estimate that 20% of Wal-Mats customers do not have a bank account, which provides a great opportunity. A recent study by CBC showed that amongst married couples, men take the long-term financial decisions while women handle the short term financial transactions. The convenience of having able to do your financial transactions while visiting the grocery store would interest a large group of the female population. As Wal-Mart stores are open on the weekend, basic banking services could be provided on the weekend. This would be particularly attractive to a larger section of the population who has to leave for the bank during their normal work hours. Two of the four elements, price and convenience, of the retail value proposition strongly support Wal-Mart’s venture in the financial services market.

As Wal-Mart’s customers have lower salaries than the national US average, they would be interested in using an ‘Always low prices’ bank. These customers are usually not treated well by the major financial institutions and usually charged higher rates and fees. Most visit the Wal-Mart stores at least once or twice a month, and so can be exposed to in-store marketing and promotion for banking services. In Canada, Loblaw provides financial services under the President Choice Financial services brand, but is not a full-service bank. Wal-Mart has started to experiment with third party financial service providers, and in a partnership with SunTrust, is beta testing almost 45 bank branches in Wal-Mart stores.

If Wal-Mart is able to enter the banking industry with its low-cost/high volume approach, it would give sleepless nights to retail bankers across North America.

Altruism in Marketing

I feel that Retail marketing for financial products is a bit of an anomaly even though it is quite common place these days. I mean, what do we sell when we are marketing those products? Nothing, really. Well, actually nothing. In fact financial products are probably some of the few products that can actually fail to do everything that they said they would do and people will still buy more. So what are we selling in this industry?

I can only suggest that we are selling some kind of expertise. The people that you are so generously giving your money to must have some kind of skill in managing money. I hope. And speaking of hope, perhaps that is how we market to the retail investor. Many mutual fund ads promote the idea of what you can achieve in the future. Since we are unable to promise a specific return, we promise the idea of what you might be able to get with x% return in however many years.

We market a future we can’t promise. We market the possibility of a better lifestyle. A lifestyle that may never be achieved. BUT!!! I believe that what the financial industry does for profit and personal gains also positively benefits society. I encourage the style of marketing and I am off after graduation to do it myself. I encourage it for the simple reason that it motivates people to save. The savings rate in North America is now negative . . . and Canada is not far behind. People on the whole are spending more than they save. In my mind, even if the fund manager loses money on the investment, I believe the investor is better off than spending their money on all the other useless crap that is out there.

What is our positioning? It’s benevolent. Don’t save for us. Save for yourself. Save for your children . . . and we’ll take a little bit off the top.

Anyway, if anyone is interested, there is an article on my future employer below.

Thanks,

Brodie

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?IdPub=128&Id=32681&cat=27&IdSection=27&PageMem=&nbNews=

(if the link doesn’t work, cut and paste)

B&Q’s Four Tactics in China

1. Product: sold starting from the minimum units
B&Q sells the majority of its products by the minimum units (pieces, grams, etc). Customers can buy wallpaper by square meters rather than a whole roll. They can buy flooring by pieces rather than square meters. They can buy metal materials by grams. It is convenient and economic for customers to purchase stuff in B&Q.

2. Price: the lowest in the construction material industry
B&Q makes the commitment to customers that it sells the lowest price of the same product in the industry among all the supermarkets and warehouses. If not, customers can return the product to the store and B&Q refunds 200% of the original price.
How can B&Q achieve this goal? First, B&Q purchases its 80% of paint not from wholesalers but directly from manufacturers. Second, B&Q builds global procurement network and has global standardized management. The efficient supply chain management reduces the material loss and product cost. By negotiating lowest price of large quantities of products (tens or hundreds times of amount of its competitors) with its global suppliers, B&Q returns the cost benefits to its customers. Customers get high quality construction products with lowest price.

3. Targeting different segments: each category has low, medium and premium products
Each category has different brands in different price levels in B&Q. For instance, the price of 5L paint ranges from RMB99 (a local economic brand) to 242 (a famous US brand). The price of tile ranges from RMB9.87 to RMB462 (a famous Spanish brand) per square meter. The price of flooring is between RMB 160 and RMB1080 per square meter. The price of cabinet is from RMB12,000 to RMB130,000. The price of bathtub is from RMB399 (a JV Kohler) to RMB180,000 (a US brand with SPA massage). The price of lamp is between RMB119 and RMB8699 (a crystal pendant lamp)…
The low, medium and premium products in each category target different customers segments. Customers recognize that they can surely find one product that fits their needs in B&Q.

4. Caring in details
B&Q offers good client services to its customers. In additional to quality assurance and return policies, B&Q has various other services. First, it provides daily household products including brushes and sponges as well as other products like flowerpot, seeds, and fertilizer in the store. Customers are convenient to buy all the related products within one store. Second, B&Q takes care of customers needs of household DIY in details. B&Q rents tools, provides professional trainings in decorations and promote DIY concepts. Third, B&Q offers additional services such as material cutting, paint mixing and decoration design. Some are free of charge.

B&Q achieves huge success in the highly competitive market in China by implementing the above actionable practices.