Updated: Aug 9, 2020
There’s one thing every coffee shop owner constantly asks: How do I build repeat business?
Why Build Repeat Business for Your Coffee Shop
The basic coffee shop business model is built on repeat business. Considering that most coffee shop transactions are between $5-7, acquiring a single customer for a one-time transaction seems almost pointless.
However, if you earn that customer’s trust so that they continue coming back, they can be worth hundreds, or even thousands of dollars. It’s nearly impossible to justify any advertising or marketing costs when the Life Time Value (LTV) of a one-time customer might only be a couple of dollars. But, if you have the mindset that you are trying to earn customers that return every month, week, or even day, you can justify spending more time, energy, and money on them.
Coffee shops have an advantage in this arena for several reasons. First, people that drink coffee typically drink it every day. This means you have the opportunity to inject your coffee into their routines. Second, the price of coffee is not very high, making it a purchase that most people don’t need to deliberate much about.
Earning and maintaining repeat business will help support your coffee business so that you can do things that really excite you, instead of constantly looking for more customers. Your repeat customers are not only the ones that bring in the most revenues, they also tend to bring in the most people. If your coffee is part of their routine, chances are they’ll tell other people and even bring them in.
Of course, I don’t have to make a compelling argument for why repeat business is necessary. I’m sure you already know that. What’s important is how to build repeat business.
How to Build Repeat Business for Your Coffee Shop
1. Focus on Your 5-Mile Radius
That’s right, 5 miles. In fact, this might be even smaller, perhaps only two miles around your coffee shop. Studies have shown that the majority of a coffee shop’s sales come from customers that live within two miles of the store.
Check out what other institutions are within this radius and partner with or sponsor them.
Offer free coffee for teachers on Teacher Appreciation Day at schools within the radius. Stop into corporate offices and drop off some coffee or a couple of gift cards. Let local businesses in the same retail center know that you offer a “neighbor” discount.
What other types of clubs or organizations fall within this radius? Find out and come up with a plan of how you can serve them. This will help get your name out to the people who live, work, or frequent your vicinity.
2. Keep Your Menu Fresh and Fun
Okay, hear me out. Offer a seasonal menu. Whether or not people order from it doesn’t actually matter all that much. Customers really just want to see your creativity and to know that their favorite coffee shop is staying fresh. Customers will feel appreciated that you are putting in the effort to offer them variety - whether they choose it or not.
For example, in August around the start of the new school year, I created a menu that included “cereal milk” lattes. Yes, we actually bought cereal, soaked it in milk, then strained it out. The milk kept the flavors and sugar of the cereal. We used Reese’s Puffs and Fruity Pebbles.
People went crazy over them. But, to be honest, not many people ordered them. They were really intrigued but ended up buying off the regular menu. At least it got their attention and sparked their interest.
A seasonal coffee menu helps maintain your repeat business more than establish it, though. And that’s okay. But be aware that repeat business will most likely not be built through seasonal menu items.
Highly viral novelty items don’t help establish repeat customers. I’m sure we’ve all seen a coffee shop that has tried a “cutesy” new thing and received some earned attention on social media. We might be quick to jump to conclusions and think we need to do something similar. Then, people will hear about us and come in, right??
A novelty item doesn’t work its way into someone’s routine. And attention on social media doesn’t earn repeat business. As exciting as it may be to have a viral item, it may earn you a few one-time transactions, but not lasting business.
Remember that your seasonal menu helps show your creativity and nurtures your audience. Try not to make it a primary driver of new business. You’ll run yourself ragged.
3. Provide Amazing Customer Service
When I had a partner at the coffee shop, she wanted the tagline to be “coffee served with a smile.” It sounds nice and warm. But it doesn’t compel people to come in and smiles are actually kind of cheap.
You and your staff should be smiling, but customer service shouldn’t stop there.
Go over and above what customers are expecting. (Check out this post for a more in-depth article on incredible customer service)
People will keep coming in if your customer service is amazing, even if your coffee isn’t that great. But it doesn’t work the other way around.
4. Be Quick to Solve Problems (Over-Correct)
I would tell my staff this all the time: don’t just correct mistakes, OVER-correct them.
If their ticket got lost and drink didn’t get made, don’t stop at making it right away for them. Don’t stop at comping their ticket even (because most people will be too polite to actually let you do this).
Use this mess-up as an opportunity to say “I know we messed up. I’m sorry. Please, give us another shot to make it up.”
Give them a pastry on the house. Or a gift card. I used to keep “Free Drink” tickets in the cash register. They were just business cars that a staff member would sign and hand out whenever this opportunity came up. Every staff member had the authority to do this. If the mistake cost less than $25 to correct, they didn’t need any approval from management.
Bonus: Free drink tickets and gift cards will get them to come in and give you another chance to give them an amazing experience. Simply comping their ticket for that day won’t erase their poor experience and won’t compel them to come back in.
5. Marketing (nurture through email, social media, etc.)
I don’t necessarily mean advertising. Of course, you see big corporations advertising in places like the Super Bowl. But none of those companies are new. They’re all companies we’ve heard of before. They just make sure to stay in front of you so you don’t forget them and they can flex how much they can spend on an advertisement.
TV, radio, billboards (which aren’t a bad idea for coffee shops, but often too expensive), are what’s called “interruption” marketing. They “interrupt” the audience from what they were doing.
No, what I’m talking about is “permission” marketing. A conversation you have with people who give you permission. People who opt-in to receive messages, updates, and content about your coffee shop.
I started this with a simple sign-up sheet on a clipboard that I set out on the counter where people waited for their drink to be ready.
The people that sign up for this list are the ones saying “I love your business. Please, tell me more about it so I can support it by buying more.”
Nurture these customers by sending (not SPAMming) them emails, posting relevant content (not just coffee memes) to social media, and host special events for them.
I know you’re thinking “that sounds like a lot of work.” Well, it can be.
But it doesn’t have to be. If you have someone on your staff who is already good at and interested in social media, outsource it to them. Pay them for it, but outsource it.
Emails should come less often and be more intentional though. Create an email about your new seasonal menu. If the only place you post it is in your shop, customers have to wait to come in to see it. They might not come in every day, but they probably check their email every day.
Other ideas for email content are:
Talk about the history of the shop.
Highlight a particular drink or coffee and talk about why it’s special.
Send out a survey of what people like and dislike. (Free market research)
Send out any special promotions or discounts for holidays coming up (don’t do this too often, of it’ll start smacking of SPAM)
Highlight a staff member
Discuss a Behind-The-Scenes aspect of the coffee shop. People love this. Create instructions on how to brew great coffee.
And so on…
One of the most popular emails I sent out was a deep dive into how to “Order Coffee Like A Pro.” I explained all the different coffee drinks my shop offered, as well as some that were popular that we didn’t offer. I then explained what are house-special drinks were, too. This helped create insight into what made our drinks, and by proxy, our shop, special.
Ask the Customer How They Heard About Your Coffee Shop
This isn’t necessarily how to build repeat business, but it can be how you find out where your business is coming from. Then, you can execute the previous tactics at those customers to turn them into repeat business.
Ask this customer what they like and dislike. Double down on things they like. If they say “I love that you make your latte flavors in-house,” then let even more people know you do this. If it’s important to one person, there’s a good chance it’s important to more.
Then, try to eliminate the thing they dislike.
They don’t like the music you play? Find something more appealing.
They dislike the pastries offered? Try out some new ones.
BUT, take customer feedback with a grain of salt. Some things won’t change because of cost or logistics. And that’s okay. You can’t make everyone happy, but you can at least hear what they have to say.
Want to learn more about building repeat business for your coffee shop? The lessons you learn from having a coffee shop coach can have a significant impact on your business. Learn how to keep building that foundation of repeat business so that you can earn some of your time back and spend it how you choose.
Email email@example.com to set up a call and get started.