How to Run a Successful Coffee Shop
Curious what steps can your shop take to stay competitive and stand out? It’s a question many independent coffee shops think about. Check out the tips we compiled to help you.
Lead with great coffee
This step is straightforward. Ultimately, it’s your coffee that will bring people in the door and lead to repeat customers. Without newsworthy coffee that is consistently great, your coffee shop will face an uphill battle to attract regulars. Consider these three things to ensure you’re brewing your best cup of coffee:
- Source high-quality beans
- Brew with the best equipment available
- Employ experienced baristas
For existing businesses, you’ve likely already completed this step. However, there is still more work to be done.
Maximize every customer
In step one, we covered the importance of understanding your core product, but it’s also critical to focus on customer preferences to help improve your bottom line. Because every coffee sale comes at a relatively low price point, each customer becomes increasingly important to your business. Take a look at the tactics below to help drive revenue with every customer you serve.
It’s all about the upsell
A cup of coffee is inexpensive, but the overhead for rent and brewing technology can be pricey. Therefore, maximizing every sale is critical, and one way to do this is through upselling with items like pastries, sandwiches, and other snacks. Starbucks, for example, is a leader in the upsell – with a full menu of food and snack options, as well as a rotating menu of seasonal snacks. Without realizing it, customers come in expecting to purchase both a drink and a snack.
Loyalty program for success
Another way to maximize success is by encouraging repeat customers. A mutually beneficial loyalty program rewards both your customers and your business. Common practice in the loyalty space is to reward customers at a rate of 10 to 1. For every 10 coffees purchased, reward loyal drinkers with a free coffee.
Diversify your establishment
Although coffee sales tend to lessen in the evening, your brick and mortar location can still be a destination and revenue driver. By considering the option to keep your lights on through the evening, you open up your business to an entirely different audience. Here are a few ideas for additional streams of evening revenue:
- Host private events. A modern space may attract individuals or businesses for a variety of purposes. Sites like Peerspace make it easy to list your space and make it available for events. Think of it as Airbnb for your coffee shop.
- Host your own events. Coffee tastings, brewings, or pairings are just a few of the ways your team can share wisdom with eager coffee lovers.
- Transition into a lounge. Many coffee shops offer wine and beer in the evening. Dim the lights, and offer your customers the chance to head back to your shop for a post-work drink.
- Partner to offer a dinner menu. Allow a local chef and try a test run of a limited dinner menu. See how dinner is received, and make adjustments!
Diversifying your business opens you up to supplemental streams of revenue – and while every tactic may not be a fit, it may be worth it to experiment and see what works.
Invest in the right technology
Today, the technology you implement can play a big role in delighting customers, improving operational efficiencies, and ultimately improving your bottom line. Empower your entire business with technology, and make today’s manual tasks automated and seamless.
Point of sale (POS) platform
A good point of sale platform enables coffee shops to ring up sales, but a great one enables businesses to cultivate customer loyalty, manage inventory levels, access detailed business analytics, and more. Adding a next-generation POS platform, like Revel, helps coffee shops do more.
Managing your team doesn’t have to be a full-time job. Employee management integration partners — like 7shifts, HotSchedules, and Deputy — provide a more efficient way for you to schedule, track, and manage employee shifts. Revel integrates directly with partners like these, eliminating extra work for your busy store operators.
Online ordering and mobile ordering
Though coffee is a quick order-and-go offering, many of today’s consumers expect to have their coffee ready and waiting when they walk into a café. Adding mobile or online ordering capabilities can make this a possibility. Revel integration partners like Mobi2Go and Olo make a customer-friendly, branded app easy to create.
Marketing for success
Marketing your business to today’s consumers requires constant evolution, and it’s helpful to consider more traditional marketing efforts, while also considering modern channels that are attracting consumers. The following concepts may help accelerate the growth of your café, and can help you reach an entirely new, and loyal audience.
Use a CRM
Building a loyal community of coffee lovers is likely any coffee shop’s goal, and a customer relationship management system (CRM) is a helpful tool to help cultivate that community. A CRM is essential for shops to gain insights into customers, and helps tailor digital experiences to forge better connections. A CRM enables your coffee shop to:
- Segment groups to target with customized marketing campaigns. Knowing more about your customer base is an essential step in the process of creating more personalized messaging approaches, whether it’s through SMS, email, or push notifications.
- Treat every customer like a regular. With stored order history and the ability to add notes about things like birthdays or allergies, every member of your team can quickly pull up a customer profile and provide personalized service.
Improve your online and social presence
Amplify the voices of your loyal followers and help people connect with your brand anytime, from anywhere. Use social media to give your brand a look and feel, and build a consistent experience for your customers from your brick-and-mortar locations to the ever-active Internet.
By adding quality photos to your social accounts highlighting new menu items, décor, and customer experiences, you have the chance to grow a digital community of loyal brand followers. Community is increasingly visually led today, and a social media presence is often what sets one coffee chain apart from another.
Does your coffee shop speak to your brand’s identity and the customers you’re looking to attract? If the answer is no, it may be time to think about updating your interior look and feel. Cafés with selective, modern decor have gained popularity, and some consumers may make a purchase decision based on café ambiance over coffee selection. Create a space that invites return visitors, even if it’s for a grab-n-go coffee.
Use your data to grow
From daily coffee sales to employee timecard reports, an important step in growth is analyzing your business as it currently operates. To get a full picture of the healthy areas, and those that need improvement, leverage data to complete a deep analysis. We’ve included ideas for how to leverage that data to make key decisions for your business.
Turn sales data into insights
As a business, you’re likely constantly considering what is driving revenue, and what your business can be doing better to operate more efficiently. Revel’s operational features and reporting capabilities give coffee shops the tools to draw out business-impacting insights, and gives you a real-time glimpse into your operations, as well as longer term reporting.
Having access to daily and monthly sales reports, employee profit reports, and overall historical performance lets operators lean on data to guide critical business decisions.
For example, identify your top-selling blends, and determine which drinks are not performing. Analyze all menu item sales, empowering you to swap items in and out of your menu based on historical performance and seasonality.
Understand your inventory
Do you know what your weekly waste is? Do you run out of milk or vanilla syrup frequently? The way to combat the unknown is to actively manage inventory levels. Keeping up with your inventory has many benefits including:
- Tracking expected use of ingredients
- Decreasing food waste and prevent over-ordering
- Preventing theft
- Checking your financial health
By using an inventory management tool, you are able to take the guesswork out of the equation and replace it with data. With Revel, for example, you have the ability to track the sales of your every drink, down to the ingredient level. With every latte sold, you know exactly how much milk and coffee beans are left– in real time. Advances in inventory management technology give operators the confidence to know that your coffee shop will always be stocked at the optimal inventory levels.
Case study – Grind
When mapping out a plan for success, look to GRIND for inspiration. The UK-based coffee shop and bar combines excellent coffee with design, technology, music, and start-up culture to create a truly unique customer experience.
Perfecting coffee culture
Relaxed, modern, and hip are all descriptors that come to mind when thinking about Grind’s brick and mortar appeal. These decisions were all intentional, designed to invite in customers day and night. The innovators behind Grind set out to create a welcoming atmosphere that encourages customers to keep coming back. Lighting, picture-worthy neon signs, and their unmistakable soft pink branding make for a memorable experience, and one worth sharing on social media.
Insightful data for smart decisions
With eight locations across London, real-time, multi-site reporting is absolutely essential to Grind’s operations. Easy to interpret but also impressively expansive, Revel’s intelligent reporting gives Grind’s management the ability to make key business decisions in a flash.
“If a thunderstorm comes over and all of a sudden you’re about to have the worst lunchtime hour of your entire life, Revel will literally tell you to send someone home,” says Ted Robinson, creative director at Grind. “It will tell you what the current sales are, and where they should be at that time so you can react very quickly and be completely data-driven.“
Finding a solution that could provide this level of insight was a critical piece of Grind’s growth.
The right technology to reduce human error
Never shy of embracing technology to improve processes, Grind was an early adopter of using an integrated Kitchen Display System (KDS). With KDS screens installed behind the espresso bar and within the kitchen at each location, handwritten order tickets and possible errors are now worries of the past.
“We’ve been using the KDS for about four or five years now and we love it. Whenever new staff start, they’re always really impressed by how it helps to speed up processes and reduce mistakes,” Robinson says.
A willingness to explore new technology enabled Grind to improve daily processes and eliminate errors, ultimately saving money and time. For Grind, the combination of operational, design, and technology decisions has proven to be a winning equation.
Final coffee thoughts
If you’re looking to grow your café or coffee shop, there are numerous ways to go about achieving that growth. From marketing tactics to improving operational processes – engage in the activities that make sense to your business.
To learn more about how Revel Systems helps coffee shops achieve their goals, visit our coffee shop POS page.