Tom Feltenstein

Café Grumpy, a small chain in New York, charges $12 for a cup of coffee while Aida’s Grand Reserve in Baltimore sells their morning elixir for $13 a cup. These coffee houses get six times as much per cup as Starbucks because they have focused on enhancing the value of their product in the minds of their consumers. Café Grumpy’s, for instance, highlights the fact that their beans are handpicked in Ethiopia and offer connoisseurs hints of apricot, pineapple, bergamot, kiwi and lime flavorings with each sip.

Few businesses understand how important this perception of value is. If you are in a competitive area such as selling a cup of coffee, you have to find your niche and market to that particular group. Grumpy’s Café and Aida’s Grand Reserve understand the market for coffee was saturated and looked for an alternative way to enhance their offering. Your business has to have a distinguishing characteristic – which is 100% about perception of value.

The two most important words to keep in mind in developing a successful customer base are differentiation and positioning. Select your product or service carefully, and realize that the world is not your client base. Be selective. Think about the particular types of customers you want to serve and market the special features and benefits you offer. Recognizing who your most loyal customers are (measured by repeat sales, related purchases, and referrals) — and rewarding them — is the key to optimizing sales and profitability.

How do you identify and reward your most loyal customers?