Cross-Selling: You Can Do Better than Most Coffee Shops
by Scott Kubie in Marketing, 30 August 2010
A lot of the web services industry (our company, BitMethod, builds mobile and web apps and services, in case you didn’t know) is built around Free-with-a-capital-F and cross-selling. Give away X to sell Y, offer Premium Z to Enterprise level customers, etc.
As BitMethod’s Creative Strategist a lot of what I do involves product strategy. I’ve learned that giving something away to sell something else—or up-selling current customers—doesn’t work very well if the other stuff for sale sucks or doesn’t address a customer need.
I was hanging out working at Smokey Row last weekend and two things happened: 1) I really needed a highlighter, and 2) I noticed what comprised nearly an entire wall teapots and t-shirts for sale. I started running the coffee shop cross-selling experience through the same mental wringer I put a lot of our ideas.
Extra things normally sold at coffee shops:
- T-Shirts
- Mugs
- Teapots
- Magnetic Poetry
- Audio CD’s
- Local Art
- Brew-at-home Coffees and Teas
- Mini French Presses
Notice a trend? Except for the mug, none of those items are things you would actually use or need while you’re at the coffee shop. They’re “gift” items. I’m uncertain of the reason for the ubiquity of these items at coffee shops—except, perhaps, that “everybody else does it”. Not good business logic.
Successful coffee shops are known for more than just their coffee. They have a great atmosphere, great service and great marketing. They make it comfortable for folks to hang out, get to know each other and even get some work done. When I see signs at little hippie coffeeshops admonishing customers against staying too long or an epic poem about why they don’t offer Wi-Fi, I really feel like they just don’t get it. If you can’t figure out how to capitalize on an environment where people feel like hanging out all day and consuming things, you might want to hang up that Small Business Owner hat.
Below are some of my ideas for things to sell at a coffee shop. I’m sure that enterprising shop owners the world around have sold some or all of these things—a Twitter follower working at Caribou informed me they used to sell pencils and chapstick. What intrigues me is why this type of cross-selling is not very commonplace. I believe these items would go over much better than a Gildan shirt emblazoned with an amateur-designed coffee shop logo:
- Pencils, Pens, and Highlighters
- Bus passes or other public transit related items or services
- Memo Pads, Legal Pads, Journals, and Drawing Pads (bonus points for uber-hipster Moleskins)
- Art, Culture and Design Magazines (tailored to taste and your marketing). Many coffee shops have a free-to-read pile of outdated and boring magazines. Why not have a killer selection funded by people actually buying those magazines?
- Decks of playing cards, UNO and easy-to-learn indie card games (check the Indie games section at Mayhem in Des Moines for an idea of just how much cool stuff is out there).
- Paperbacks—maybe a periodic staff pick, or something connected to a monthly book club hosted at the shop.
- Crossword, word search, and Sudoku books
- USB Keys
- Recordable CD’s and DVD’s
- Earbuds/Headphones
- iPhone/iPad stands
Notice a trend? They sell a lot of this stuff at Barnes and Noble and Borders. Those stores present more competition for time and money otherwise spent at a neighborhood coffee shop than people probably realize. Both of them have business models encouraging you to come in, hang out, and enjoy the experience without having to buy anything. Lots of people buy something. In fact, I would estimate at least 80% of the time that I’ve spent money at Barnes and Noble, it hasn’t been on a book. It’s been a muffin, or a journal, or a game, or a magazine.
I remember hearing once that laundromats and coffee shops are the easiest business to get loans for, implying that they are very “safe” bets for the bank. The trouble with a safe bet and a safe business is that, unlike the software industry, the pressure to innovate is extremely low. Whatever industry you’re in, no product is ever safe. What might be your main focus will be given away as an afterthought by someone else or cross-sold to a bigger audience than you could ever hope to capture. Start thinking now about how to expand your offerings quickly and easily by analyzing your environment, your community and your users to identify their needs.
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About the author: Scott is BitMethod’s “Chief Nerd Translator”, filling project management and copywriting roles on most projects. He is passionate about media and has worked in radio, film and event planning. When he grows up he wants to be a Ghostbuster.
Reach out to Scott Kubie at scott@bitmethod.com
This requires a business owner to make the mental leap of viewing the store not from the owner’s perspective but from the customer’s perspective. Harder than it sounds.
Peter Tubbs, 31 August, 11:31 AM
Hi Scott, this is a very common-sense idea and also very meritous.. have you personally thought about designing a wall display or shelf display of some of those items and marketing them yourself to these neighborhood coffee spots?
If you could come up with something efficient and attractive, seems like you could have a lucrative business on your hands with unlimited potential and continuing income after the initial sale.
Sharon Bright, 31 August, 02:00 PM
I’m in. Let’s open a coffee shop. We could also offer a level of service which is apparently unattainable in Des Moines.
Josh Dreyer, 1 September, 08:42 AM
Josh – Most def, I will have to lean on you later for a “how to kill every restaurant in Des Moines with great service” post.
Sharon – Great idea, run with it! I’ve got too many projects on my plate already.
Peter – You summed my idea up much more succinctly than I did, thanks for reading.
Scott Rocketship, 1 September, 09:34 AM
It makes so much sense. Journals and writing utensils should sell like hotcakes.
You’re very good at finding inspiration around you. Well done, Scott.
Scott Taylor, 2 September, 08:13 PM
You’ve got it all wrong.
I don’t visit places that have no focus.
For example, the chain bookstores you mention are now so crowded with non-reading materials that I have no idea what business they are in these days. It seems their investors feel the same way.
Coffee shops succeed when they create a sense of community with their space and services. And that has nothing to do with the ancillary products they sell.
The Mars Cafe does a great job with this because it knows its customers and what type of community space and services they need — power for laptops, free wifi, smoothies, beer and wine.
But so does Zanzibar’s. It has a deep focus on coffee but lacks the distractions that make The Mars a wonderful place — no wifi, limited food selection, no ‘other’ drinks. But it’s those missing pieces that make Zanzibar’s great too.
Both places know what their target customer wants and needs. And both places excel at delivering it. And that has nothing to do with all the non-coffee related stuff they sell.
Mike, 7 September, 01:03 PM
I think that places like Zanzibar’s could excel at both atmosphere AND cross-selling. Mars sells a lot stuff that I don’t see people buying. It’s not really part of the atmosphere, they just do it without thinking much about it.
Scott Rocketship, 8 September, 12:33 PM
I adore your comments. I have a small bookstore that is moving next month. I will be doubling the floor space. Guess what I am adding – a coffee bar. I am planning on expanding my merchandise and found this article to be very helpful. Some of the items you mentioned I did think about, but I love reading about the things I didn’t think about! Great job.
Cindy, 11 November, 03:20 PM