Messing with the customer perception of your brand is the quickest way to destroy a business. This case study shows how easily, and innocently it can happen.
I love a good coffee. Better still, I love a good coffee in a cafe that oozes that authentic European ambiance. As it turns out, I was lucky enough to discover a great little cafe not far from where I Iive. Located right in the heart of a large Italian community, this was a place that had earned its reputation amongst the most discerning of coffee drinkers.
Many locals not only relished the fine coffee, they enjoyed an informal chat with the constantly morphing wave of friends and acquaintances; some staying longer than others, but all happy to share an informative snippet or two about family and friends, or chat nonchalantly about life in general. It had a great vibe and was a lovely place to be.
Eventually, the owners put the cafe on the market, selling to a young couple who were enthusiastic, friendly and tried hard to get to know the regular customers. During the handover period, the original owners stayed on for a few weeks and nothing changed. The customers kept turning up, and the new owners even asked the regulars if they thought the coffee was as good as the previous owners. I thought that was a great move. It showed that they understood what their customers valued, and why they kept coming back, which is why I was left completely dumbfounded by their next move.
Perception is everything; don’t ever mess with customer perception
I hadn’t been to the cafe for a few weeks, and walked in one day for a coffee and noticed they had reduced the price of all hot drinks on their menu board. This surprised me considering customers were clearly happy with the price point that had already been set by the previous owner, and there was nothing to indicate that a new strategy had been implemented to warrant the change. But there was an even bigger surprise to come.
I ordered my coffee – a flat white – and in no time my order appeared on the table. The moment I gazed at the cups contents, I could tell something was amiss. For starters, there was no creme! The texture was thin and sloppy, with just a thin layer of oversized bubbles deflating rapidly on top. The color was pale and extremely milky, and the taste was even worse than it looked.
By now you are probably thinking I sound like some sort of a coffee snob. I’m not at all. I just order a flat white with no special instructions, but I do know when I am served rubbish. My guess is that the owners had either changed to a cheaper blend or reduced the amount of coffee in each shot.
The cause of the error is irrelevant in the context of this article, what does matter is that they reduced the cost by around 10% but delivered a product that didn’t even begin to represent the value of what they were still selling coffee for. It also explained why I was the only person drinking coffee that night – at least during the time I was there. There wasn’t a regular in sight, and the friendly casual girl was nowhere to be seen either. She had been sacked due to declining sales. All this in just a few weeks.
As new owners, this may be an irreparable mistake. For their sake, hopefully not. The food menu had always been pitiful at this cafe, but that wasn’t why people came. Selling good coffee and lots of it was what this business was always about. Those in the know tell me that this cafe has always punched well above its weight in the volume of beans they went through each week. But their core product had now lost its kudos, and the valuable brand equity that had been nurtured over so many years may now well be worthless, and all for what?
Now, I have no idea what really happened. I am simply writing as a customer who formed a perception about a business based on my own customer experience. Regardless, there are some valuable lessons to learn from this hapless couple, and they are lessons that are just as relevant to a long established business, a startup or buying into an existing business.
Giving with one hand and taking with another almost never works in business. Look at the backlash manufacturers face when they reduce the size of products, such as food and beverages in lieu of price increases. They are exposed to the wrath of current affairs programs, and even risk consumers boycotting their products. An honest up-front price increase, on the other hand, may result in a few disgruntled customers, but at least consumers still trust the brand.
People buy from businesses they like and trust
The real lesson is this – never forget that people buy from businesses they like and trust. Give your customers any reason at all not to like or trust your business, even for a moment, can quickly become commercial suicide. The moment you drop your guard, there will always be a competitor waiting with a smile and an enticing value proposition to entice your customers away before you even know what’s happened.
The other lesson to learn from our naive new cafe owners is how important maintaining the integrity of brand positioning is in the market. If a business positions their brand as a premium brand, then that business needs to deliver a premium product – every time. If the product offering is a discount product, that’s fine, but position it that way. A customer’s perception of a brand is only as good as their last experience. This is why consistent operational processes are so important.
The footnote to this story is that the old coffee blend is back, and tastes as good as ever. Maybe the old customers will come back and give them a second chance. Then again, maybe they won’t. Why should they?