To Discount or Not to Discount?

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When I sat down to write the business plan, there were certain criteria that had to be met. The first one was to never compromise quality. If Tap Dancers Specialty Coffee was a publicly traded company, it would have a board of directors, a CEO, a CFO and shareholders. They would pressure me to cut corners on quality to reduce the bottom line to be able to increase the top line. This is the strategy they would use to ensure more money in their pockets.

Buying the finest beans and masterfully roasting in small batches are definitely not the most cost efficient way to sell coffee. Not to mention the bags with the clear back, one way degassing valves and zip lock seal. But, these items were the perfect formula for providing the finest specialty coffee to my customers and I dare say, worth every penny. It brings me great pleasure to be able to give access to this “luxury” to everyone.

Another component of the plan was pricing. I decided that we would price the coffee with a fair mark up. The Bible says a wise man will have several advisors which I have made sure to do. Some of them have said that I am not charging enough for my coffee. On the west coast similar coffees sell for $20.00- $25.00 per bag. Others have suggested that I raise the prices so that I can then offer sales and discounts, because “that is what works for the Omaha market.” After debating these ideas the decision was to go with a simple pricing plan and stay away from all the gimmicks.

You might ask yourself, “Do you ever give your coffee away or offer discounts?” Don’t get me wrong. I understand that the whole purpose of marketing and advertising is to get people to try your product and hopefully, fall in love with it. That is why we are out at different events around town giving away free samples. We currently give free coffee away as part of our radio promotion on KGBI and we also will sell our coffee for a one time discount to new customers with Daily Deals (similar to Groupon and Living Social). We even have a special promotion from now till the end of November 2012 that offers a free Clever Dripper if you sign up to receive your coffee on a weekly or bi-weekly basis as our way of saying thank you.

Bottom line is that we will always provide the best at the fairest price possible without using gimmicks. I personally want you to experience what my wife and I experience every morning…..the world finest cup of coffee.

 

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