Читать книгу Wake Up and Sell the Coffee! - Martyn Dawes - Страница 19

By mid-year we had launched our first stores with Spar in Cardiff and with Alldays in Faversham, Kent. The Faversham site was opposite a railway station and Spar in Cardiff was a busy city centre convenience store with a good hot food to-go business.

By August we had nine sites trading, seven with Spar and two with Alldays. We had very few bright lights in an otherwise dull landscape of sales results. We were seeing anything from 20 to 100 or so sales per machine per week. One Spar store in the West Midlands had hit 174 in a single week and our second Alldays had reached 344 cups. These figures weren’t being sustained though so Lou and I were desperately trying to identify what made these stores different. Both had strong food to-go sales of sandwiches and pastries and both were large city centre stores.

I believed we were on to something. Even at 100 cups of coffee sold each week that meant on average someone was buying a drink every hour given typical store trading hours. We embarked on all forms of promotional activity. This included free coffee for the first week of trading for all customers, loyalty cards, a free Kit Kat (another Nestlé product) with each coffee, and a bundle offer of a coffee and a newspaper. We proactively targeted the local area with flyers to tell residents they could now buy coffee to go in their local store. We targeted offices, taxi ranks, railway staff at Faversham and even schools in the area.

No one was being forced to buy a drink, people were choosing to. But after 13 weeks of trading we were only selling 420 cups per week from nine stores, so not even 50 cups per week on average. It was true that most of our openings had been during a warm summer but this was an excuse, really.

There was a dawning realisation that pushing harder and finding that elusive breakthrough promotional activity to catapult sales forward just wasn’t the answer. I knew I needed pull not push but I didn’t know what I meant by that, it was almost just a feeling.

It seemed that whatever we did we couldn’t really move the needle. The CEO of Alldays had recently restated their commitment to having coffee in all of their stores to complement their in-store concessions of Dunkin’ Donuts, Domino’s Pizza, Movie Nights video rental, dry cleaning services and Post Office counters. I was staring down the barrel of a potential 700 site business with this customer alone, but I might as well have been trying to fly to Mars.

I worked hard to manage my relationships with Spar and Alldays, being sure to stand my ground. I knew the machines needed to be in high-visibility locations in each store and next to other snacking food offers. I had to decline some good sites as there simply wasn’t the right in-store location available without a costly re-jig of the store layout.

For the first time, cash was now starting to worry me. I had started with effectively £80k (my £50k investment and the £30k Barclays overdraft) but this was shrinking on a monthly basis. I had bought machines, cabinets, stocks of cups and other consumables. I also had rent to pay each month, Lou’s salary, travel costs and so on. What we’d got was promising but it wasn’t convincing.

In the search for more money we pitched to new potential investors with another business plan. A couple of friends came close to tipping money in, one of whom was Alistair from Dawes Ryan Consulting, but close was as far as he got.

Then Spar wrote me a nice letter:

“It seems that Americans have a strong coffee culture. Currently of course the UK is very much different, however we do see that the UK market will establish itself in the same way if the right offer is in place. Much of the opposition is due to the state of mind of the customer and availability of convenience coffee. Spar, with the help of Coffee Nation, hope to be the people who change this perception.”

They went on:

“Spar have chosen Coffee Nation because they have the best package for our stores. Also the backup and support far exceeds any competitors. At this stage we are both on a very steep learning curve, but by the time the market is ready to take off we will be the most experienced partnership in the market.”

Another compelling factor in our favour was our revenue share model. If Spar went elsewhere they would have to buy or rent the machines and pay this cost regardless of whether they sold a single cup of coffee.

All of this pointed to our business model being able to retain major retailers’ interest, which was great, but that wasn’t what investors were putting their money into. We had to sell more coffee for this to be an attractive proposition to the retailer and neither I nor Spar had any idea when the market would be ready to take off.

By August 1997 my latest business plan showed I needed to raise £250k. This would take us to 400 locations after two years. We were still selling drinks at 59p. Pret A Manger had introduced coffee at 69p and that was real espresso coffee with fresh milk, so I couldn’t easily put the price up.

My issue was one line in my Executive Summary, which read:

“Two of the stores have traded ahead of expectation and one has traded within expectation.”

Out of nine live sites I had six non-starters. The business plan was really a combination of asking people to see the potential and get the vision of what should happen based on the US experience and what UK retailers and food companies hoped would happen, combined with some unconvincing results from a pilot operation. It was a Hope Plan, not a Business Plan.

At this time, Alldays wanted me to commit to a full package of in-store promotional activity and materials. This included a full eight-week promotional cycle, external store signage, wobblers, ceiling-mounted signage, coffee cup mobiles on sandwich chillers, sales counter banners, swing signs on the pavement outside, plus caps, badges and balloons on launch day.

Some of this I put in place, but I had realised that all of this was simply noise. Chances were if none of it was there, the sales would be just the same. They had to understand I was a small company with big aspirations, but also a small purse that was being depleted by the day. If my “No” to more costly marketing activity meant I lost Alldays as a customer, so be it. I had to stay alive and I knew more of the same was not going to generate different results.