Specialty coffee shops are looking for a solution to compete against Starbucks on mobile ordering. Branded apps are a tempting option, but with a...
Why Branded Apps Don't Work
Specialty coffee shops are looking for a solution to compete against Starbucks on mobile ordering. Branded apps are a tempting option, but with a closer look they are too expensive and create a bad customer experience.
Over 70% of people we surveyed that order ahead at Starbucks and other national chains say they'd switch to supporting local coffee if they could offer a similar experience.
That "experience" is deeper than just being able to order ahead through an app. In fact, there are basically three key elements that give national chains the edge in terms of increasing revenue per customer with mobile & online ordering experiences:
- Consumers know there is always a location nearby.
- Consumers earn & redeem rewards anywhere.
- Consumers can receive personal deals and offers.
Branded apps tend to have poor customer ratings because aside from the fact that the tech is built for restaurants, people don't want to download an app for every coffee shop they might visit - it's easier just to download the Starbucks app instead.
Not only do white label apps provide a subpar customer experience, they are more expensive than most shop owners realize (same goes for accepting online orders through your point of sale!). Let's start there...
Don't be misled by mixed pricing
The one area that many coffee pros miscalculate is how expensive branded apps (and online ordering through their existing point of sale) actually is.
Below, we've included a calculator that you can use to estimate your real costs as a % of sales.
Flat transaction fees can become really expensive, but white label app providers are betting you won't catch on. Generally, a "card not present" fee that comes with online ordering or via an app includes a $0.30 fee on top of the 3%+ rate they charge. For your regulars that order a $4 latte that comes out to 10.5% of your total sale.
Monthly fees usually go hand and hand with white label apps and charge anywhere from $99 / mo to several hundred dollars - even if nobody uses it or it creates a terrible customer experience. Since they get paid whether the solution works for you or not, they tend not to offer much support after you launch. When you add that up as a % of your sales, it is eye opening for many shop owners.
Despite the hefty price tag when you add it altogether, this doesn't include any marketing investment or the ability to automate personalized deals and discounts like we provide with joe. To contrast, we invest over 50% of our profits back into our partners to grow their businesses in the form of personalized deals and offers and charge just 9% of sales.
People want to support local, everywhere
The average coffee drinker consumers coffee over 3 times per day. That's three opportunities for those dollars to go into the pockets of small businesses. However, your customers are likely in very different places each time they consume.
It's not uncommon for a person that commutes to work downtown to have their first cup before they commute into the office, the second might be a mid-morning pick-me-up at the coffee bar close to the office, and the third might in a cafe a few blocks away for a work meeting.
Without a network of indie coffee shops under one easy-to-use app, people settle for ordering ahead at national chains because there is always a location nearby. Our data shows that people order from a new location about 30% of the time. By being part of a network, you are more likely to be discovered by the thousands of people that want to discover and consume great coffee and support local business wherever they are. You miss out on that with a branded app or simple online ordering.
Deals & loyalty are a difference maker
Every national chain has a marketing team that is analyzing data across millions of users to target customers with deals and offers that will increase their spend. White label apps or simple online ordering through your point of sale might have basic loyalty programs you pay for and have to spend time running manually.
At joe, we have you back and can play the role of marketing team like those big chains have. In fact, we invest over 50% of our own profit back into our partner coffee shops in the form of offers and deals designed to maximize spend per customer and lift your business. We also provide marketing calendars and a regular stream of deals and offers that you can use to light up your social media to drive traffic on our dime. When was the last time your point of sale did that? ;)
As a result, the average joe user spends 45% more per month than when they order in-person only and the majority of shops surveyed say they saw a lift in their business from a mix of new and existing customers.
Setup should be easy
Building your menu and digital storefront should be easy. We provide a human touch and do all the heavy lifting so you can focus on building relationships, creating great product, and giving back to your community.
Once we build your digital storefront and input your menu, we'll work with you 1:1 on a tailored launch plan to get you up and running in a hurry. Then, we'll continue to reach out and offer tailored offers, deals, signage and more based on the profile of your shop and your performance.
You don't have to go this alone. Together, we can thrive.
Have questions? Email us at firstname.lastname@example.org to chat with a human.