metrics

Within coffee we talk a lot about the way we might measure the quality of our coffee product but rarely how we measure the effectiveness of our businesses and our service – in a previous life I enjoyed jobs in retail and training, one of the things that I found really interesting were the metrics that stores I worked in used to measure growth, success and effective service and particularly how they were inextricably linked both to each other and also the business’s mission of stronger sales

To have an useful system of measurements you have to begin with how they will get you closer to the end goal – what are you trying to achieve?

If your end goal is the perfect cup of coffee I suggest you don’t open a shop – i f you already have, close the shop, get rid of all those distracting and inconvenient customers and focus just on perfecting coffee – when you nail it, give me a shout and I’ll come round and pay lots for a cup, provided it delivers

if your goal is to share the most perfect coffee you can prepare then your focus needs to be on getting the people* to share it with and raising money to allow you to afford the technology, training and ingredient to prepare the product they deserve

Let’s simplify business growth

  • Get more customers
  • Get customers to spend more (happily)
  • Get customers to come back more often

This takes lots of important things out of the equation, especially cost management – bit that will never make your sales higher, and is ultimately limited – sales growth isn’t limited, except by our choices

Get more customers

Hundreds of ways to do this, all with costs and benefits, some slow some fast, but measuring the effectiveness is limited to a couple things – measuring transaction numbers and measuring footfall

In most retail environments you would then measure conversion rate (transaction/footfall) how many visitors your service/layout/design/product converted into buyers – you could argue that in a cafe almost everyone who enters, enters for a reason and buys something – I wonder?

Are more people buying a drink for them and for their friends? Which is more desirable – ambassadors introducing new people (some right/some wrong) to you or new opportunities willing to stump up the entry fee? I don’t know but I’d like to know more about who I was serving, and how many of them were buying

Get customers to spend more (happily)

Measuring average spend is easy, tills do the hard work for you, lots of cafes I know measure it- harder is what you compare it to?

Your average transaction value is dependant on products sold (a cafe that doesn’t sell food will have lower ATV – that’s ok) so telling me your average sale is £6.66 tells me nothing – what’s useful is your ability to grow your ATV through good pricing, more desirable product and good service, including up-selling

Up-selling is often thought to be evil – a symptom of the disease of corporate greed, it’s not – skilled up selling is the ability to recognise and pre-empt a customers needs, fulfil more of them and make them happier – every customer doesn’t need or want a sandwich or a tasting flight- recognising those that do and helping them find it with you as opposed to elsewhere is a skill worth noticing, measuring, improving and rewarding

Happily is the important part as it leads to the last goal

Get customers to come back more often

A quotidian customer (love you DNF) is more valuable to you than a geek from out of town, no matter how much you enjoy the conversation, even a seasonal customer who returns once every three months is more valuable than every accidental visitor on that busiest day of the year when the international congress of women’s sword jugglers happened to be across the road

Daily customers, regular customers, love you, they live you, you are a part of them and their story about themselves and they are willing to pay for you and would miss if you we’re no longer there- they are also much cheaper than buying new visitors who may not ‘get your concept’ or more honestly may not like your concept enough to finance it

How do we, measure repeat custom in a cafe? Four square? Keep cups? I don’t know – loyalty cards are not it- they are not effective, they communicate a questionable message about the cost of your goods, and no one values them (in fact many people expect them – I adore playing with expectation!) disloyalty cards aren’t any better, at least not for encouraging this (actually they are all about new faces – turning new faces into part of the furniture is the real deal)

Improving customer return frequency and loyalty is at the core of what we spend most of our time talking about – improving product, improving service- daily sales total don’t give you effective feedback on your success at driving this

Measure these three things, regardless of what results you have, measure your improvement of them, get better at making money and use the money you make to serve better coffee and help your staff buy houses – that’d be cool
*as well as on product (in fact arguably product is a part of the equation of building your customer base, and also the results of sales based metrics should tell you more about the success of product quality initiatives than anything else)

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