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Why Some Succeed and some dont

Guest post by: James Yuille

Article Overview: I had a call from a friend of mine who is an advertising agent and copywriter. He gave me a referral to the owner of a franchised coffee shop that had called him seeking help with advertising and marketing.

Why Some Succeed and some dont

I had a call from a friend of mine who is an advertising agent and copywriter. He gave me a referral to the owner of a franchised coffee shop that had called him seeking help with advertising and marketing.

My friend said that he thought that the caller’s problem wasn’t one that his services could fix but thought instead that he needed some sales / customer service training.

**Sidebar - isn’t it nice when someone says “I can’t help you but I know someone who might be able to. Let me get him to call you”**

Anyway, I called the coffee shop owner and said I’d drop by for a chat over a coffee. Getting to the shopping centre late on Friday afternoon, I sensed immediately what the problem was. Jack (not his real name) was working in the back office and came out to talk when his young male counter assistant went to get him. Jack’s face was long and dour. He looked totally miserable. I wondered why his business wasn’t working for him …

Anyway, we got to chatting and I guessed Jack wasn’t one for small talk so I got straight to the point and started asking him some direct, searching questions. He told me that he’d invested over $300,000 in the franchised store and that in almost six months, hadn’t broken even once; let alone looked like making a profit.

**Sidebar - two further side issues come up here - let me share them with you.

The first refers to what is called “Buyer’s Remorse” which is that voice in your head asking you why you did what you did. Jack’s little voice was asking him why he put that kind of money into the business in the first place.

The second is deeper and relates to an issue of capital. I wondered just how much working capital jack had started with; how long he had expected it to be before he made a profit and how much he had allocated to his initial marketing campaign to get the store off the ground.**

Jack went on to tell me that he hated the store and hated dealing with customers. I asked him why he got involved with such a customer-focused business in the first place. His response was that he didn’t really think about it.

Let me repeat that - he didn’t really think about it.

**Sidebar - what was the Franchisor thinking about? He’s sold a franchise for over $300,000 to a guy who has no prior customer service experience and who plainly is an introverted kind of character. There’s another issue here but I’m not going to touch it here!

We discussed the parameters he could influence in generating profit. He could either increase sales or decrease costs. We examined the costs issue first but quickly identified that he had very little room to move. So we moved on to increasing revenue. We looked at the number of people coming into the shop every day, and their average spend.

He was generating about 200 sales per day at $5 per sale. I told him that if he were to increase the number of customers per day by 10% and increase their average purchase by 20% to $6, he would increase sales by a staggering 30% every week.

“How can I do that?” He asked. Here’s what I told him to do …

The scenario is one you see very day. Two people come in and order a coffee each. They become engrossed in a detailed conversation and soon their cups are empty. Instead of just clearing the empty cups (or worse still, leaving them there until they go), you walk up and say something like this “You look like you’re deeply engrossed here - let me get you more coffee”

You may get a No, but you’d never get the Yes if you hadn’t asked.

When you take their fresh cups back, take a little tray with a small selection of cakes and ask if they’d like to make a selection. One buys, the other doesn’t.

You’ve now converted a sale for two coffees into four coffees and a slice of cake. You’ve turned $6.00 into $18.00 or more. How many times in a day do you need to do that to double your turnover? One table in three. One in six will increase your turnover by a staggering 50%.

Imagine now that it’s getting towards lunchtime. Take a menu and ask if they’re staying. If even one says Yes, you’ve added another $15 to their table account. The initial $6.00 is now over $30.00 - unbelievably you’ve increased the value of their custom by a whopping 500%. Just by asking three simple questions.

This really works. A client of mine, David, was the manager of a café here in Brisbane. He tried this one quiet; wet Sunday morning and the average spend per customer that day was the highest it had ever been on any Sunday in the café’s history. Note too that due to the weather, fewer people came into the café than on any previous Sunday that year. Needless to say, it was very quickly adopted as standard practice. It’s still being used there to great effect.

Anyway, despite all of this, Jack was unconvinced. He doubted he could do it. I had to go - I was on a promise to pick my kids up. It was about 5.30 and there were still lots of people in the shopping centre and yet, behind us, Jack’s staff were putting down the shutters and mopping the floor. I asked him when the shops closed and he said most were open until 8. Why wasn’t he staying open until then I asked, especially when his two competitors, a donut shop and another café were showing no signs of closing. “I always close by 6, he replied”.

I walked away shaking my head.
I guess there are some people you just can’t help.

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