Coffee Dynamos Entrance
In Cape Town, I learn that in the multitude of cafés, the brands of coffee most prevalent are Illy and Lavazza. One group of young friends, headed by an Italian devotee, sought to gain a foothold for Bristot beans. They position themselves as a young, dynamic new entrant.
Their first task was to get a foot in the door. So they adopted the good old Puppy-Dog Close. They put in product on Evaluation.
The rep would sit in a coffee shop for a fair while over three successive days, engage with the manager and then offer to put in a bag of beans gratis.
The market leader apparently has an established entry-level offering, Lavazza Espresso. The Bristot equivalent can be a mere half of that price. A bag makes 140 cups, so a freebie adds up to a lot of extra profit. The rep asked that feedback must be gleaned from punters, and that if it went down a treat, then he’d smilingly insist on a double-order each month.
He reckons an impressive 9 of 10 cafés take the free bag upfront. Of these, an amazing 7 out of 10 re-order for cash. That’s an incredible 63% penetration.
Not everyone takes first time though, as if he gets feedback that the coffee is too bitter or too weak, then he offers his fallback second product. And he’s had to offer a third premium blend in places too.
He’s been doing this for eight months now, and loves to tell the story of one of his first customers, that re-order three bags a time ever since from him.
It’s a great tale of taking market share with a new product where a couple of key conditions apply.
- They feel their product is of at least similar (they actually believe better) quality to that of the competition.
- They hold significant price advantage.
- Promotional Marketing costs are easy to work out in advance (all prospect cafés times one free bag each)
- Not forgetting after-sales service works wonders. (A real Italian Barista doing a training session goes down amazingly well.)
- Perhaps most crucially, their competitors are sleeping. The newbies only have one product to focus on, whereas it appears competition have a basket of wares to peddle. This makes their attrition less noticeable and a breakthrough can go undetected for longer.