Canadian Vending

Features Coffee Service
Make It Real


April 30, 2009
By Michelle Brisebois

Topics

One of your most effective marketing tools exists right in your vending machine.

One of your most effective marketing tools exists right in your vending machine. While our marketing focus may traditionally zero in on advertising and direct marketing – a strong tasting program is the
most effective way to convert shoppers into purchasers.

One may argue that vending isn’t a traditional form of retailing. After all, the channel exists to replace live personnel – wouldn’t a tasting program mean hiring “real people?”

Maybe – or, maybe not. There’s more than one way to roast this coffee bean and it’s worth considering … for the sake of your business.

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Tasting programs are what we like to refer to as “moments of truth,” where consumers make purchase decisions based on their direct interaction with your business. Tastings are definitely moments of truth and if they’re done properly, they can significantly boost your sales.

Arbitron and Edison Media Research* found that in-store sampling increases sales of the product sampled. Their research indicated that more than a third (35 per cent) of consumers who tried a sample purchased the product during the same shopping trip. This trend spanned across all customers – regardless of whether this was their first introduction to the product or a repeat purchase.

About half of those who sampled indicated intent to buy in the future. This included 85 per cent of those who had never bought the product before. In addition, 24 per cent said they would switch from the brand they had previously planned to buy.
 
Those operators who have machines located in manufacturing facilities and office buildings know that the audience for their coffee isn’t exactly captive. In fact, that coffee house or popular chain just down the street can steal quite a bit of share from your potential pool of sales.

Brian Martell, of Heritage Coffee, confirms there’s some leakage of consumer dollars when it comes to office vending.

“We know that 50 per cent of coffee consumed at the office is purchased off-premise. Our research indicates that often an office worker will jump in their car and head down the street to buy a coffee for him or herself as well as a few other co-workers. The main reason they choose to do this is to take a break from work.”

Most Canadian companies have implemented a hiring freeze at best, and a downsizing strategy at worst. Those surviving employees may not have the extra time to go get a coffee off-premise anymore. Should you remind them that a great tasting coffee is close at hand – the message will likely resonate more strongly now than ever before.

Taste is an important strategic tool. As Martell points out, investing in a better quality coffee can have a
dramatic upside.

“If a machine has one hundred vends per day at one dollar each ($100) at a cost of $.15 per vend ($15), the machine makes $85. An additional cost of $.03 per vend means the quality of the coffee increases significantly. If the improved taste profile results in a 20 per cent increase in sales, (120 vends) and cost is now $.18 per vend ($21.60 total) the sales are now $120 with a cost of $21.60. Profit now sits at $98.40.”

A vending focused tasting program can be implemented by either offering the coffee for free for a limited time period or by hiring personnel to physically give out samples. Prior to implementing a “free vend” tasting program, ensure that signage precedes the sampling to let consumers know that a new coffee with a premium taste profile will be debuting in the machine shortly.

Indicate that to introduce this new coffee, it will be available for free for a limited time. You may wish to include a contest with a web address where consumers can provide feedback regarding the taste profile.

If you choose to have a live person offer the tastings, you will now have the opportunity to explain the product’s features and to field any questions tasters may have. The wine industry knows that by telling the wine’s “story” a consumer will be more likely to purchase the wine being tasted.

Coffee is similar to wine with respect to the influence growing conditions and “terroir” have on its taste. Having a server offer the tasting in person provides that face to face interaction. The server can speak about the coffee’s origin and why it’s more premium.

Live tastings offer a real opportunity to romance the customer and convince them to try the product. In fact, many of you may already be doing this without realizing it.

As Martell points out, “Often when a machine is being serviced, the repair technician will offer samples of the coffee to passersby to verify that the machine is working properly. The technician may be unwittingly creating awareness by offering an impromptu tasting.”

A strong tasting program takes the risk out of the purchase for the customer. They’ll be happier buying it if they know they’re going to like it. Samples are like little “two sip” advertisements because after all: tasting is believing.

*Arbitron and Edison Media Research conducted a national telephone survey from January 18, to February 15, 2008 of 1857 consumers.


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