One of the most dangerous fantasies that many business owners have is that because they have a “Great” product (let’s leave aside the question of deciding what a “Great” product is) then they can’t help but be successful.

I recently came across a pointed reminder of why this is not the case. 

In a previous post I mentioned that a large employer, Optus, had moved out of North Sydney.  As a result, foot traffic in the area had dropped off dramatically.

Now, opposite what had been the Optus building is a fantastic little bakery shop, the “St Honore Sourdough Bakery”.  They truly do have a great product.  One of my friends goes so far as to say they have the best bread in the world!  I woudn’t go quite that far, but their bread (and croissants, pastries, cakes, pies and lots more) is truly excellent.

However, when Optus moved, their business slumped.  I call in at the bakery quite often on my morning walk (before calling at Starbucks for my coffee!) and saw the slump for myself.  There have been staff cutbacks and clearly business is way down.

So, it doesn’t matter how great your product is, if you don’t have the traffic you’re not going to make sales.  And the bakery was (still is) totally dependent on one source of traffic.  When that source of traffic dried up, so did the business.

So the lesson is to diversify your traffic whan you can.  Now, the bakery’s business will recover when new tenants move into the area but this episode has highlighted how vulnerable the business is.  It’s a reminder of another observation that if you don’t have a customer list, you don’t really have a business.

OK, I promise that this blog isn’t going to end up being simply about Starbucks!  However, something happened this morning that I think provides a useful tip and marketing lesson.

When I got to Starbucks this morning (absolutely craving a Toffee Nut Flat White) I was met with disaster.  The big espresso machine was out of action so no real coffee (they had the brewed stuff but that just doesn’t do it for me!).

Now, the staff were very apologetic, of course.  More importantly, however, they also handed out a coupon for a free beverage. Excellent idea.  Why?  Because one of the most important assets any business has is customer loyalty (and satisfaction, of course).

The coupon is a great idea because not only does it placate regular customers like me (I shudder to think how much I spend at Starbucks!) but any casual customers will most likely come back to redeem the coupon.  Most people will feel they are missing out somehow if they don’t redeem that free beverage.  And of course everytime someone buys from you, the relationship is deepened. 

So, the broader lesson is that if ever there’s a screw up in your business, make sure you make a big effort to look after your customers.  Show them that you really do care and that they are important to you.