You don’t get buzz by being Santa Claus with your profits.
The way you get buzz, buzz that is sustainable and leads to higher profits, is to be a business worthy of buzz.
That means you have to earn it.
When I am asked by consultants what it takes to create a successful practice, I always tell them they need to “hit it out of the park” because that is what happened to me when I worked with one of my first clients, Polly’s Gourmet Coffee.
This is their case study.
In the late 90’s it was commonplace to read about the big-boxes putting many small businesses out of business. From the arrival of the Home Depots that threatened the small hardware stores, to the Staples that were putting office supply businesses under, the business media was salivating for the “going out of business” stories. (Well, they still do but…)
It was easy to paint a picture where our choices would become limited and where there was no room for the individual customer or business person.
In short, it was hopeless to try…
That’s why, with a stagnant economy, the story about a possible second Starbucks going in about 100 feet from Polly’s Gourmet Coffee, who had been in Long Beach, California, for twenty years, got ink.
Lots of it.
Editorials were written decrying the death of the independent; worried letters to the editor were published about losing the smaller retailers, but the lease for the second Starbucks was signed and their opening date announced.
I had to see what all the buzz was about.
I visited Polly’s on a chilly, January night and found the place a mess. The trash hadn’t been emptied, the patio was dirty, the creamers were empty, the merchandise was dusty, half the overhead light bulbs were burnt out. You get the shoddy picture.
While I was waiting for my cappuccino, one of the employees told his co-worker, standing right in front of me, that he had written on an employment application for another employer that he was the Polly’s store manager because, “…like who would check?” The other said that when the second Starbucks opened, “Polly’s is going to be gone.” That’s why he had his resume out too.
When I met owner, Mike Sheldrake, the next week, I asked him, “What are you going to do when that second Starbucks opens up?” He answered, “I’m going to send them back to Seattle.” I replied, “And how, exactly are you going to do that?” Mike took off his glasses, looked back to the coffee roaster and said, “I haven’t got a clue. Where do I sign?”
Getting To Work
Mike was one of the founding members of the Specialty Coffee Association (SCAA.) People from around the country came to Mike to learn how to roast coffee in their own coffee houses. Customers from around the country came to swap tales with Mike and share a cup of coffee while gleaning some of his tasting secrets. Mike was the rock star of the coffee world!
In spite of that, I learned that Polly’s was hemorrhaging cash. We needed to turn the negative buzz about his viability around if he was to stay in business.
And quick. Polly's had been losing about 10% each month from the previous month since the first Starbucks opened 10 blocks away.
Mike’s sleepy coffeehouse was ready for a reboot to become the preeminent choice of coffee connoisseurs and we’d make those customers our evangelists who would market Polly’s to their friends.
Lesson: You may already have buzz others have created for you - as a loser or place to avoid. With social media like Facebook, Yelp and Google Reviews you can get a bead on this fairly easily.
Polly’s had gotten ink before the second Starbucks opened, but it was a story of the little guy losing against the big powers. It spread organically through word of mouth and the papers.
We were going to drive the story we wanted to tell - a tale of success, not a tale of woe.
We had to get the buzz right with the customers first, then amplify it with limited marketing like paid ads, brochures, direct mail and bumper stickers.
You don’t invite people to a party or a show you know is no good.
I sat in front of the counter one day and acted like I was working on my laptop. I clearly saw and heard people ordering drinks and baker items. The coffee order was called out but as the cashier placed a bagel or other bakery item in a bag, only the coffee was rung up. Happy customers were putting large tips in the tip jar. By the end of the shift the tip jar was filled with lots of $5 bills. These employees were raking it in, and all at Mike’s expense because most of what they were collecting should have been his.
A meeting was held at a local restaurant. I put up a picture of the Titanic. When everyone was seated, I subtly announced, “Ladies and gentlemen, we’re on the deck here and it’s not going down on my watch. I know you’re stealing from Mike and that stops right now.” Two girls got up and said I couldn’t talk to them that way – and stormed out the door. Sensing that I was usurping Mike’s familiar relationships with them, another got up, started to cry and said, “You can’t do this Mike! We’re family!” Mike acknowledged her feeling but said he brought me in and this is what he was going to do, right or wrong.
The next week we saw sales rise 11%.
Lesson: Look to your own crew, facility and customer experience first before you ever try to get buzz in your marketing.
We had to give customers something to talk about because being “in the know” made them more interesting to their friends. When those “in the know” customers brag about an establishment, those friends and family naturally believe. It is the heart of word-of-mouth marketing.
Mike’s ads in the local community paper were small, but because he had purchased them weekly from the outset twenty years prior, he enjoyed premium page-three placement. We tripled his ad size but discontinued the discount coupons that blended into the other clutter. Those discounts had only added to his debts.
We were going to raise prices and make everyone pay their fair share.
Lesson: When you feel discounts are the only way to bring people in, you are often blinded to why you are not attracting people to pay full price for your products.
Picking the Fight With the Giant
We had to stand out. To pick a fight. To define Starbucks on our terms, not theirs. While Starbucks had brought specialty coffee to the masses, they were not the same as a shop that roasted coffee every morning; who carried more exotic blends and sourced coffees among the best; who had beans so fresh they were still warm when you purchased them.
The tag line was created, “Down the street from Ordinary.” Unless we changed buzz from “Oh, poor Mike” to “Winner,” we couldn’t drive trial of Mike’s products.
Instead of pitching everyone to try our fresh roasted coffees, which really didn’t translate on the page, we’d take advantage of his relationship with the local paper. We would run a different ad each week. We’d have “fresh content” that mirrored Polly’s fresh roasting their coffee daily.
We used direct mail extensively five miles around the shop. And it always was based on emotion and having fun, never discounts. The first example was a shot of Mike in front of the coffeehouse with the quote, "Rumors of my death were greatly exaggerated. - Mark Twain 1888, Mike Sheldrake 1999."
Lesson: Crafting your business as the angel to a competitor’s devil can galvanize response from loyal customers and give you a wealth of possibilities to explore. In those days it was Starbucks; today for many businesses, it is Amazon.
Upgrading the business
We purchased new patio furniture to place on the newly enlarged city sidewalks providing more places for our customers. Nothing attracts people like seeing a busy shop.
To build buzz in the neighborhood, we created a contest for an entirely new brand of coffee cups that had the coffee jacket in between the liner and the cup. This meant you didn’t have to double cup hot coffee and provided a backdrop to custom print our own design.
We wanted local artists to create iconic paper cups that would immediately show the bearer as “in the know” and spread our message. We wanted our customers to become our sales people via the unique coffee cups as they walked around the neighborhood. We wanted the employees to talk up working at Polly’s as a warrior – not a survivor – or worse. They loved working at “that coffeehouse.”
To build more community, we formed a panel of judges made up of the Dean of the Art School from the local university, a variety of business leaders, as well as our own customers. This was an early example of crowd-sourcing back in 1997.
Since our customers contributed to the success of our outcome, our iconic artwork was going to be chosen by them. If we succeeded, so did they. One of the final designs came from Lomonoco Design which was a coffee colored collage of photos of Mike, the crew and the coffee roaster. We liked it so much, it was also made into t-shirts fans could purchase.
Lesson: Involving customers and your community in your business builds the web of community in a very real way. Nowadays Facebook can help, but it is still the feeling the customers have when they are in your business that will determine whether they even want to get involved with you.
Merchandising the store to sell
Dull 25 watt light bulbs in the vintage stained glass lamps were refitted to 150 watt lights to shine brightly. Additional lights were added to shine from inside the store out onto the sidewalks to make the store stand out at night.
The counter areas were moved and display areas were added with various heights. Jamaican Blue Mountain coffee, a $50 a pound coffee, was packaged into blue foil single-pot servings and featured at the register along with new custom red logo’d mugs.
The most expensive coffee machines from Capresso were displayed complete with beans and signage easily explaining why the $300 model was the best and what to be wary of in cheaper models. (Hint: since the water never gets hot enough to release the best oils on the bean, bitterness is leached into the cup.)
Sales were climbing…
Lesson: Organizing your products and increasing the light levels in your store are what promotes discovery of your products and spotlights your unique features, and your most expensive items.
But having positive buzz where your customers own your success also can be fraught with dangers.
What if people came in and didn’t get a wow experience?
Upgrading the Crew
I personally interviewed every one of the applicants. Since all but one employee had quit or was let go, we were able to start fresh and create an exceptional coffee culture.
A comprehensive sales training program was developed that took Mike’s passion and comprehensive knowledge about our coffee and culminated with a 100-point test to certify all employees knew what they were talking about.
We hired a mystery shopping company to independently judge how well we were delivering an exceptional experience. Our last questions were the heavily weighted, “Would you drive past a competitor to come back to Polly’s?” and “Would you go out of your way to tell friends and family about Polly’s?”
We started free Coffee 101 events where Mike shared his knowledge about coffee, from how to grind it to how to brew the perfect cup. The store was packed with novices who wanted to learn from the expert. We added Coffee 102 which covered espresso drinks.
Clearly something was going on at Polly’s.
Lesson: Until you get the crew up to speed so that customers will figuratively crawl over broken glass naked to come back for that experience, your marketing means nothing.
Proof Of Marketing
People had stopped noticing Mike’s ads each week because the coupon rarely changed. Each week I came out with a new ad. Between weeks 40 and 41, we deliberately skipped a week to see if anyone noticed. That’s when customers called to ask what happened. They were reading and noticing.
If no one had called, I’d have been surprised.
By the second year, I’d gone from being referred to as “El Diablo” by customers to the “Category-killer Killer” in stories about the little guy fighting back. We’d had stories written about us; I was featured in the New York Times and was doing business makeovers for the Los Angeles Times.
A business professor at California State University in Long Beach asked if his MBA students could do a marketing project to see if all the rumors and stories about how Polly’s now thriving business were true.
After a student from the group perused our sales figures, she asked me point blank, “How do you know how well your advertising is working without a coupon?” I replied, “Are they still teaching that crap to you?” She answered, “Yes.” I shook my head. Our sales are up 50% over last year, that’s how I know. But don’t believe me, do your own study.”
So they did.
From a sample of over 1000, they found that 80% of respondents knew our tag line and where we were located.
Because we all love a good underdog story. In fact, that’s how I originally pitched the New York Times reporter, “Would you be interested in an independent coffeehouse going up against two Starbucks yet they still grew their sales?” We were a poster child for their David v. Goliath story.
The press loved the idea of the spunky independent winning against the mass marketer. Controversy sells!
Lesson: Positive buzz is something you have to work at. You can buy it but it won’t stick. It takes hearing back from other people who had not been your customers and who are now happy brand ambassadors to know your buzz is working.
A 52% increase in sales the first complete year of the program with an additional 40% increase in sales on top of that the following year.
Now that we had our buzz, Mike wanted to grow his wholesale business. What better place than the SCAA Expo in Long Beach that April? Thousands of local coffeehouses and restaurants would be there looking for new suppliers.
But how would we bring our battle cry of “Ordinary Coffee” to a trade show?
Upping the Ante
We purchased a bag of Starbucks Espresso roast and poured some into a coffee tray. I filled another with a sample of Polly’s Espresso roast. You could see the tips of the beans were burned in the Starbucks beans, but not in ours. Many of their beans were chipped and broken; not ours. So I made up signs showcasing the differences and clipped them to the trays.
That day, we took off for the convention center. It was just Mike and I at our less-than-stellar location. We set up our samples, rolled out our banner, put out our coffees and brochures, and waited. Mike was indeed the rock star, and many people stopped to see him.
A couple Starbucks executives with their minions came over. One of them said, “You can’t display our coffee that way.” We told them we purchased the bag of coffee at the grocery store and could do whatever we wanted with them. The minions took notes and slowly moved on. They didn’t like us.
What would a publicly-traded, world-class business care about one little coffee house in Long Beach? A lot, I guess, for I was told much later that a regional Starbucks guy had gone to the local paper and asked to see every one of our ads.
We had good buzz, they didn’t.
I have to acknowledge that an awful lot of things happened to make this success beginning with the fact that Mike had a great product and he himself was a great character to market.
Without that basis, all the buzz we were after might have backfired.
"I wouldn't be in business if it weren't for Bob." - Mike Sheldrake
Final lessons for you:
- The media will pick up a sob story if you let them. Are you listening bookstores, toy stores, electronics stores?
- Word of mouth, your positive buzz, has to be created on your terms
- Pick a fight. Your employees, customers and the media love a good underdog story.
- Get the basics right first. Clean out, close out and keep out the junk.
- Make shopping an exceptional experience, with exceptional products that stand out and deserve full price.
- Ask yourself, how high is up?
- You can do this.
Find out more about this case study here: R.I.P. Starbucks - A Retail Consultant Says Thank You
About Bob Phibbs, the Retail Doctor
Companies from some of the very largest, to some of the smallest, from luxury brands to startups, from franchises to regional chains contact me as a retail consultant because they are looking for results. Their successes are all theirs. You can find more case studies here.
While every client and project is different, the ability to enlist me as a retail consultant who has a fresh set of eyes to look at the challenges you are facing has been proven to result in a focused, effective and creative path to profitable sales.
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