Whether you currently run a coffee shop or are researching opening one, you’ve probably discovered that the profit margin on cups of coffee isn’t huge.
Even if your coffee shop charges premium prices, it is tough to make a big profit selling java.
That is why it might be wise to diversify. In fact, Peter Baskerville, who has started several restaurants, told Forbes in 2012 that to keep your coffee shop afloat, coffee should account for no more than 40% of weekly sales.
This means looking for fresh ways to encourage customers to add a few more items to each transaction. Increasing average spend per customer can be as simple as an extra shot of espresso or a custom flavor.
Or, you can boost your income by offering food and merchandise. Get those upsell ideas brewing with these strategies you can put to the test with just a few weeks of preparation.
Offer Add-Ons At The Checkout Counter
Successfully marketing add-on items is all about product placement. Make sure you put promotional signage and products as close to the checkout counter as you can to have the biggest impact.
For example, many successful coffee shops have a pastry display right next to their point-of-sale system. Gift cards and small snacks also make for items that are easy for customers to grab as an impulse buy.
Make Your Specials Truly Special
Specials and discounts are a no-brainer when you’re trying to sell products. The trick is to limit these offers, so they become scarce and extra special. Whether it’s a seasonal latte or a one-of-a-kind branded T-shirt, only offer it in your shop for a few weeks at most. Customers like to treat themselves, especially to an item they won’t be able to get later.
Offering short-term specials also gives you a chance to test out new concepts and products. If they boost profits, you can put them on the menu permanently. Consider adding these “limited time only” items to your product line:
- A barista’s special recipe latte only available for one week or one month
- Seasonal apparel with your shop’s logo — when you sell out, it’s gone
- Custom curated coffee-lover gifts for major holidays
- Weekly food specials like a muffin with seasonal ingredients — only available for two weeks
- Gift cards with unique limited-edition designs
Mix Up Your Menu
There is value to not overwhelming your customers with too many choices. But you can also increase sales by offering some non-coffee items that appeal to people at different times of the day, or to people who aren’t in the mood for a caffeine rush.
If you’re open late, think about adding a limited offering of wine and beer to your menu for folks who want to wind down. You can also include evening snacks like a cheese plate or decadent desserts for more add-on potential.
For the coffee shop in a family neighborhood, sell a few juices and kid-friendly treats like string cheese and fruit. Health-conscious customers will love those, too.
There’s no magic formula for what food and drink additions will boost sales, so test out a few ideas. Think carefully about your audience demographic and what they’re most likely to buy. You can even ask your customers to take a quick survey of what they would like to see added to the menu.
Don’t forget to check current sales to see what’s selling best. That can give you insights into different or complementary versions of products that might be a hit.
Promote Loyalty With Branded Merchandise
Do you dream of a world where everyone is carrying a coffee cup with your name on it? Make it happen! Selling branded merchandise is a great way to help your best customers be your best marketers while showing off their good taste. Plus, branded merchandise makes them feel like part of a special club for coffee shop regulars.
At first, only order small quantities of branded products, so you can see what’s most popular. And remember, limited-time offers are more appealing. Once you see what your regulars are into, add a wider array of products to your branded line. Some of the most popular coffee shop branded items include:
- Custom coffee mugs for home and travel
- Hot-and-cold-insulated beverage containers
- Baseball caps, T-shirts and hoodies
- DIY coffee-scented air fresheners
Go Slow, And Track Your Efforts
Remember that slow and steady wins the race. Don’t go wild and implement all of your ideas at once. Try one at a time as a test to see if it’s effective.
Use your POS system to help you track sales, so you’ll know if your new add-ons really add up on your balance sheet. If you need help managing new inventory and monitoring sales, talk to Talus Pay about how our systems can help increase average spend easy for you and your customers.