Many small businesses rely on word-of-mouth tactics and other marketing strategies to keep themselves financially afloat.
In today’s rough economy it’s important for small businesses, particularly restaurants and coffee shops, to think of ways to market their business with no extra cost while boosting their revenue.
On a national scale, websites like Groupon, Living Social and The Capitol Deal have been a popular way of accomplishing this avenue. These websites are moving in to promote deals for restaurants and other businesses in major metropolitan areas.
Frequently, you may find deals for authentic foreign and domestic restaurants on sites like Groupon.
With the push from cost-saving websites, restaurants and small locally-owned coffee shops are often left behind for a variety of reasons like proximity and demographics.
As a result, small businesses in Loudoun County and many other business areas are turning to local specific market-focused promotion like loyalty punch cards.
Popular local restaurants like Puccios N.Y. Style Deli, Shoes Cup and Cork Club, King Street Coffee, Tropical Smoothie and Market Street Coffee all have programs in place that reward frequent customers for their loyalty. Even the nationally-franchised Pinkberry Frozen Yogurt has a punch card program.
Even with a recovering economy, businesses in this area rely on cheap marketing strategies to bring out their valued customers to boost sales and revenue.
Keep the cards coming
Puccios N.Y. Style Deli Owner Eva “Effie” Olah, a native of Hungary, bought her business from its original owner almost seven years ago and decided to keep the name even though she wasn’t from New York.
Offering a wide-range of sandwiches, subs, soups and desserts, as well as some native Hungarian foods, Olah’s business has become extremely successful.
Under her ownership, the deli is frequently considered for top area food awards.
Before she purchased the popular deli, which was originally opened in 2003, government workers were treated with a 10 percent discount.
“When I bought the deli, Mr. Puccio was giving 10 percent off to government workers only,” Olah said. “I thought that wasn’t fair and wanted to include everybody in the program and not just the government. My program is basically 10 percent off as well, because your 10th sub is free.”
Olah estimates that after instituting her program five years ago, approximately nine in every 10 customers have one of her punch cards.
She notes, “when I see a new customer I make sure I always ask them if they want to grab one, because if they love the sandwich, then they will come back and that is what we strive for as a business,” says Olah.
“I don’t really see the economy being really bad here, but everybody is trying to penny pinch, so the more money our customers are saving the better off they are,” Olah said.
According to Olah, each card she hands out for free costs 28 cents.
Olah has experienced business without the punch cards and found out just how popular they really are – customers frequently ask about them.
“I really don’t know what it would be like without this program, but the customers will not be happy. We ran out of cards one time and had to wait a week to get the new shipment of cards in and the customers were not happy and some were even angry,” she said. “I ordered them late and we ran out, so now I make sure I order them with plenty of time to spare.”
Popular coffee shop, Shoes Cup and Cork Club has instituted an interesting variation on the punch card idea.
After running into problems with their loyalty program, owner Ed Shihadeh thought of a way to use the program to benefit the environment.
“I kept saying to myself that we have a bin in the shop for recycling cup sleeves to lower the carbon footprint and save a tree, so what we have done is put the punch cards on the cup sleeve,” said Shihadeh.
The program allows customers who purchase nine coffees to receive their 10th coffee for free.
“Hopefully, people have been saving their sleeves and will use it at least 10 times,” Shihadeh says.
Originally, the program had gift cards that gave customers purchase discounts.
However, when he went to reorder gift cards he found the practice no longer cost effective.
“When I went to reorder the gift cards and the cards cost 60 cents a piece, plus a 25 cent transaction fee. That was a dollar right there that I was giving out every time I gave a gift card out,” Shihadeh said. “At that point it just wasn’t cost-effective for me.”
Shoes bought 2,000 punch cards to fix the problem and customers were receptive to the change.
“People seemed to be really positive about the punch cards and they seemed to really grasp it better than the gift cards,” said Shihadeh. “I think the loyalty cards is good for repeat business, but I think those people are coming anyway and you want to reward them. There are other methods for new customers, but they don’t really reward anyone.
“This sleeve with the punches on it already has to be used, so there is no additional cost to us, where with the cards, we had to pay to have them made,” Shihadeh said. “Hopefully, customers will use these 10 times and keep putting them on their cups, then taking them off. This will allow them to, one, save their money and two, help the environment.”
According to Shihadeh, the idea may take longer to catch on than the normal punch cards for simplistic reasons.
“It is a little easier to pull the card out of your wallet, as opposed to pulling the sleeve off the cup before you throw it away and putting it in your car or wherever,” Shihadeh said. “I think it is just a matter of people getting used to doing it.”
Ten more coffees
Market Street Coffee is a small locally run cafe with locations in Leesburg and Purcellville.
Its owner Pat McKinley started the business in 2002 in Leesburg and opened in Purcellville a couple of years later.
McKinley began her loyalty punch card program about five years ago. Again, if a customer buys 10 coffees, espressos or blended drinks, the 11th is free.
As a barista at Market Street Coffee for the last year, Caleb Loomis explained the program.
“The system works to where we have simple coffee drinks like iced coffee or regular coffee, then we have more sophisticated drinks like cappuccinos and finally our blended drinks,” Loomis said. “People tend to get the same drink every time they come in. With our rewards program, it allows those who order coffee to get a free coffee rather than a free cappuccino so the business isn’t losing money. So it makes sense.”
Loomis has noticed the card serves as a marketing tool from a visual standpoint to draw the customer back to get her daily coffee intake.
“The visual tool also helps, because you will find customers come back because they look at the card and see they are almost there or halfway there,” Loomis said. “They’re excited and they’re more likely to come back. People seem to really like this and it has worked really well for us.”
Market Street Coffee markets its card by taking a proactive approach with not only new customers, but returning customers as well.
“When somebody comes in and orders a drink, if they are not already using a card we ask them if they would like one. What that tends to do is either remind them to use the card they have or they’ll be more likely to come back with their new card,” Loomis said.
With a constant influx of commuters picking up their coffee in the morning and students – when school is in session – lounging around the cafe while studying, a majority of Market Street’s revenue is made up of those two dynamics.
“The most money we make is off of people in the area who are getting their coffee in the mornings and are just in and out,” Loomis said. “That demographic makes up a majority of our loyal customers, but everyone uses the card.”
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