Question: How can we brand ourselves as a responsible, community-based business?

Our family owns a state-wide chain of coffee shops. To compete effectively with global brands like Starbucks & Coffee Bean opening in our neighborhoods, we were advised (based on consumer surveys) to align our brand to local and ethical issues.

As a pilot, we moved to using only organic milk in one of our upmarket locations, with a small increase in price. We did not do an extensive marketing campaign, but we did put up new signs and educate the customers who inquired about the increase.

Our sales dipped and did not recover in last few weeks, so we have paused to reconsider whether or not go ahead with other recommendations (some of which will drive cost upwards.)

In your experience, is there a disconnect in the consumer survey results and consumer spending on such issues? Or is this a marketing problem?

5 Expert Insights

This is an interesting challenge in that you are receiving competition from brands that are known actually world-wide.  The advice to align your brand to local and ethical issues makes sense and yet ... at what cost to the consumer.  I understand that your initial step was the organic milk and the associated price increase did the opposite of what you aimed to achieve.

Of course I don't know what the other recommendations were that you would be considering however, if there's learning from your initial experience I would suggest that you bring your team back to the drawing board to approach your question related to being a responsible and community-based business once again.  This time you can come up with creative ideas that distinguish you from the competition ... something the reinforces the concept of "big enough to serve you ... small enough to care.  I expect you will find some answers in the way you serve your customers ... a way that lets them realize they only can get this type of service from a 'neighbor'.  I believe there are solutions for you that will not require raising prices at the same time accomplish your goal.  it's worth a serious shot.  What you have going for you is that your loyal customers really want to remain just that.  Just give them the reasons and I believe you'll find it won't take that much.

There is a HUGE gap between what people tell you on surveys, and what they do.

Often, they don't realize it themselves.

Sony asked groups of consumers what color Walkman they thought Sony should make. People said "red" and "pink" and lots of bright colors.

At the end of the session, Sony offered the agreed cash payment, plus a surprise bonus -- a free Walkman in any color they wanted. 90% or more selected black.

So, Sony made mostly black Walkmen.

You absolutely cannot trust what consumers SAY they'll do. Only ever trust what they ACTUALLY DO.

Here are some ways to get customers to BEHAVE in ways that will support your chain -- several are drawn from the excellent book "Influence" by Cialdini:

1. Tell them that other people are doing it.  "More of your neighbors prefer a local shop, like ___."  This is consistently persuasive, even when people claim it doesn't affect them.

2. Use the survey results as fodder.  "82% of Oregonians (or pick your city or town or state) say they prefer a local store over an impersonal chain."

3. Focus relentlessly on the customer experience.  Family owned firms are notorious (sorry!) for having pockets of complacency, often around cost control or customer service.  If an employee cannot smile consistently, get them out of any customer facing role.  The owners need to go clean toilets (seriously).

4. Make sure every customer loyalty card (punch card) is handed out with the first 2-3 spots punched out by the server.  People prefer a 10-spot card with 3 holes pre-punched over an 8-spot card with 1 hole punched. It's not rational. It's just true.

5. Find a good, inexpensive way to get feedback from customers directly to HQ. There are several smart-phone based, text-based systems that offer this service cheaply. The data you get will be priceless -- IF you act on it.

6. Offer a bonus of 25 cents each time a server remembers a customer's name.  Once they get good at it, you may need to drop that to 10 cents.  Customers LOVE this.

Almost every small business makes the same mistake...they try to be a smaller version of a bigger company in this case Starbucks. A big company will out market, out sell, out finance you so what do you do? Change the game.

You need to think about starting your own movement...your own community. The question is what can you do to change the game? What will attract customers to your shop versus Starbucks? Is it because you are organic or are they looking for an experience. Think Apple store a very different experience than Best Buy.

Could you offer a live cooking class with the art of deserts maybe even healthy ones as an example. Are you asking your customers to like your Facebook page before they leave? Facebook ads work great for local shops like yours. Think of what is not there then create a solution.

Do not go through with the other recommendations if they are backed by the same type of data that you currently have.  

I am a big believer in the power of analytics. Although surveys can be a form of data, if the survey instruments are designed correctly and given to a large enough random group to make statistical inferences, it is much more effective for small businesses such as coffee shops to use the internal data tools of large business to leverage their competitive advantage.

Large businesses, such as food/ drink chains, employ analytics to drastically lower the cost of changes and the risks associated with them. Put simply, they create databases that cross correlate information about consumers to everything from zip codes to commuting times to create a much more accurate picture of what is really happening in the local market - and to predict how changes in service delivery will impact the future of the business.

This allows the business to begin addressing change from a knowledge-enriched perspective, where the objective is not to make branding or marketing changes, but to meet understood needs of customers in new ways.

Do what you do well.  Focus on the customer and the experience.  Delight your customers with your product and service.  Changing to organic milk was likely done in a vacuum.  Did your customer ask for it?  That said, the customer is what counts.  Be involved in your local community but do it in an authentic way.  The rest will take care of itself.