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The Golden Triangle of Coffee (a parable for the small business owner)

August 14, 2009

Locally-based businesses (as opposed to multi-national corporations) are the life blood of any community.  And people are beginning to understand the importance of nurturing local economies. But there are still a few hold outs.

While it is clearly to our collective benefit to support local businesses, many people still patronize national chains.  And the reasons don’t all have to do with pricing.

If you are a small, locally-owned business trying to compete with the big guys, you might want to consider the following parable.

The Golden Triangle of Coffee Joints

Once upon a time in a small coastal downtown village, there were three very cool coffee joints.  One was a neighborhood favorite and had been there forever.  The second was fairly new, but belonged to a multi-national corporation.  And the third was a brand new, locally-owned establishment that tried and failed to compete with the first two.

What happened?  Let’s take a look:

The original, long-standing local coffee joint (let’s call this one “P”) was situated just at the edge of the main drag and featured an outdoor area with tables and chairs, plus comfy couches inside.  It’s location wasn’t the best, and parking was hard to get, but it still had many, many loyal customers.

The newer, locally-owned guy (let’s call this one “J”) was situated in the middle of downtown and had plenty of convenient parking plus easy access to the freeway.  It also had great indoor and outdoor seating, and offered healthy and organic, fair trade alternatives that the other two did not.

The newer, national chain (we’ll call them “S”) was just across the street from “J” and offered minimal indoor and outdoor seating, but had great parking and easy freeway access.

But all things were not equal between these three, and eventually “J” couldn’t compete with “S” or “P” and had to close its doors.  Why?

Theories abound, but many folks who wanted to support this new alternative to “S” just plain didn’t.  And owners of nearby businesses complained that the community didn’t care about supporting the local economy.  But those who were paying attention saw a few possible reasons for “J’s” closure:

1. Long wait times and slow service. In comparison to getting coffee at “S” or “P” – it usually took “J” twice as long to fill an order.  If there was a line, well…you’d have to pull up a chair.

2. Spotty inventory. “J” offered its customers a menu of specialty juice drinks.  But many times, inventory on ingredients was so low that orders couldn’t be filled.  Even persistent customers would tire of going in, only to be told, “Sorry, we’re out of that.”  “S” and “P” never had that problem.

3. Nearly Non-existent Marketing Efforts. Even though “J” did attempt to occasionally market itself, it didn’t take advantage of several opportunities to partner, network or otherwise participate in a larger way with the greater community.  The owner was “too busy” and people weren’t encouraged to go out of their way to try something new.  “S” on the other hand was part of a huge marketing machine that included things like gift cards, a website, and sponsorship of local events.  “P” didn’t do much marketing, but relied instead on its long-standing reputation for great products and service, unique ambiance, and free wireless internet.

There might certainly be other reasons why “J” closed its doors, but these were the ones visible to those paying attention.  And the good intentions of “J”  (to offer organic, fair trade and healthy alternatives to “S” and “P”) failed simply because people weren’t feeling the love.

Moral of the Story: The over-riding reason people continue to buy from anyone is because they feel loved and taken care of.  They may come to you initially because of your unique offerings or expertise, but in the end, it’s all about the love.

If you have other tips for the small, locally-based business owner, please share them with us!

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One Comment leave one →
  1. Diane Amaral permalink
    August 14, 2009 7:37 pm

    What a great story about the coffee houses. Point well made. Great Job!
    Hope all is well with you. How are things going? and the plans to travel, is that still in the works?
    Miss you!
    As always,
    Diane

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