Employee benefits receive quite a bit of scrutiny. From how much the company is spending on healthcare to heating bills. The hot, caffeinated beverage in the breakroom is no different. That’s why operators need to be prepared when workplace coffee is in the crosshairs. OCS providers need to be ready with information and options that can change a conversation from, “We’re considering the elimination of free coffee” to “We want your services for the next year. Where do I sign?”
Really hear the problem
As with any solution, or selling process, there needs to be a clear understanding of the problem — the real problem. A quite common one is that a location is struggling financially and looking for ways to cut costs. Try to find out all you can about the situation. Are they downsizing employees at that location? What other services do they currently have? Now think about what you currently offer them and what you could offer. There might be a way to achieve a win-win.
Rarely are companies aware of all the solutions you can offer, so it’s important to present the appropriate ones. If a location enjoyed a coffee cart on site, but is now looking for a more cost effective solution, offer single-cup brewers that can make individualized and specialty drinks. Consider bean-to-cup and pod brewers, as well as cartridge style brewers. Consider the before and after price per cup — could your sales department make a pitch?
Can you bring in a lower cost coffee option, perhaps a traditional brewer or private label coffee? Make sure to discuss the value and flavor of private label, especially if a location perceives it as a low-quality option.
Go beyond coffee, too. Discuss options such as a point-of-use water system to replace their 5 gallon water service. Could you offer bulk delivery of some of the office products they are getting elsewhere? Hopefully with out of the box thinking, you can offer services that keep the relationship going, but also show the location a savings that gets them to say “yes”.
Calculate out coffee breaks
If reorganizing services doesn’t persuade the company, don’t be afraid to show the costs of offering no coffee, or what employees consider ‘bad coffee’ at work. It’s argued that locations lose $100 a month when employees leave the office for coffee (double that if employees take more than one coffee break). It can add up fast to thousands of dollars each year per employee. At 50 employees, taking one break a day, that is $60,000 per year, roughly $5,000 a month. What kind of coffee service could that location buy for that amount? And with all of today’s OCS solutions, how much of that could the OCS provider save them?
In addition to time away from the office and their project, there is the physical and perceived benefits of good quality coffee. Research shows people view coffee as assisting with their mental focus, a way to get more done, increase wakefulness and drive up productivity. Substandard coffee or no coffee at all will only serve to drive employees out of the building.
Small locations who want bean-to-cup
Another problem some operators face is dealing with a small office that wants a sophisticated brewer, such as a bean-to-cup brewer. Operators should first consider if the location would be profitable if they charged a rental fee or leased the machine for $100 to $150 a month, plus the cost of beans. If the small location still wouldn’t be profitable, consider refurbishing an old bean-to-cup machine. There is an initial outlay of money, but not as much as buying a new machine. Plus, if the machine was already in the warehouse, not earning revenue, any profit would be positive cashflow. Consider assets and see if with the addition of a leasing fee, the numbers could work.
Set up for the long play
Working with a lower ticket now might reduce your bottom line, but it’s better than losing a customer. If the operator shows a willingness to be flexible and tailor services, that will cement the relationship for when times are better. Plus, losing a customer arguably costs a great deal. Aaron Pedersen, founder of Pedanco.com, a cloud-based customer feedback manager for the hospitality industry, urges service-based business owners to analyze a customer’s lifetime value. Not only should that include the amount of money that a customer will spend over their lifetime with your company, but also the percentage of business driven by the customer. According to Gartner Group, loyal customers, even if they only represent about 20 percent of your total customer base, drive an additional 80 percent of business. There are social implications as well. An unhappy customer complains to others — 16 people according to Pedersen. That’s 17 people who won’t use your company and thousands of dollars lost. Even with a focus on generating new business, it can be more cost effective to get a little less from current customers in an effort to retain them.
OCS providers are in the ideal position to educate customers. They know workplace coffee inside and out, and can share a broader perspective of both what is happening in the area and what is trending with consumers. There are a number of solutions that should help operators meet the needs of employers who want to reduce OCS costs (at least in the short term). And if they do, then when economic times are better, the location will again turn to you for alluring breakroom beverage options.