How to successfully put your coffee business on subscription
Today we interviewed Elvis, one of the three founders of Artis Coffee in Berkeley, California. This specialty coffee roaster’s mission is to “inspire a new generation of coffee lovers,” and not only showcases ethically sourced and sustainable coffee beans, but roasts on demand, guaranteeing a fresh cup of coffee, either in store– or at home. With one brick and mortar shop, an ecommerce store, and subscription offerings, Artis Coffee continues to grow, with the build of a second brick and mortar this year. We wanted to find out more about how they market their product, their road to subscription offerings, and any suggestions they may have for those thinking of starting their own subscription service.
Clayton– Let’s get started here. The first question I have is: how did you come up with the idea of doing subscription for your coffee business?
Elvis– So, I think the idea was sort of always on our mind and the idea of a coffee subscription, it isn’t new, it’s been happening for a really long time. My parents, years ago, had a coffee subscription, and I think that it was one of first that would send coffee to your house periodically, even back in the 90’s. So it was always a thing that we were thinking about and that we wanted to do, but we also had quite a few customers asking for an easy way to have coffee delivered. We only have one location in Berkeley, California, and where we are in Berkeley we get a lot of people that visit from 20 and 30 miles away that come to the street that we are on, because it’s a really nice outdoor mall style shopping area where there are a lot of destination stores that people can visit. So they come in and they get a bag of coffee and they go home and they’re like ” your coffee is the best, we love drinking it, its so fresh, I wish there was a way that I can get it at my house, and that I can get it regularly!” So, we said yes, we should definitely have a way to do that. If you want to drink our coffee all the time but it’s too much of a burden to get you to the store then we need an alternative.
Clayton– Cool, I think that ties directly to the next question- which is why did you see subscription as such an important thing to offer to grow? I think you pretty much covered that already, but you can go on…
Elvis– I can elaborate on that point specifically, so obviously there is that customer need that we talked about – people really want that, but for us, as a retailer, the subscription is a way for us to extend our retail store into consumer’s homes, wherever they live. Our subscribers, a lot of them are located around the store, but we have people who order online and subscribe from all over the United States. New York, to Florida –we even have a subscriber in Louisiana, these are people that can get our coffee now, that weren’t able to do so before. It really helps us extend the storefront and become a much larger company.
Clayton– Awesome. The next question is when you were first launching you were really hands on with a lot of people that first signed up for subscriptions, so how was that process?
Elvis– Sure, so when we initially did the subscription service and our first customer, she said “I want your coffee, I need this subscription” and I said- “well I’m not going to say no to you.” But at that point, we didn’t have the technology, because we hadn’t signed up with you guys. So I had, essentially, a spreadsheet saying who wanted coffee, how frequently they wanted coffee, and it was a very manual process. So that was really challenging to be able to go through and do all that and to really get to a number of subscribers that we wanted to get to. Which I think we now have approximately thirty subscriptions, last time I looked. I wouldn’t really be able to keep up with that by hand through a spreadsheet, so it kind of grew slowly at first, but having you guys as a platform to help automate that transaction really made it possible for us to grow that product line as part of our business.
Clayton– When you did launch, and how did you promote the coffee subscription to your existing user base?
Elvis– So anybody that would ask in store if we offered a subscription, we would, of course, inform them that they could do it on the website. Right now, we use a combination of both physical marketing and digital marketing. In our location, we hand out cards with every bag of coffee that goes out that says “Do you love this coffee? Never run out, get it delivered at home.” But for online as well, we do a lot of email marketing as well as promotion via social media. So, we take a photo of what your subscription would look like when its delivered, put it on Facebook, and put it on Instagram. We have experimented with discounting, with great success. We were able to convert quite a few people just through our website without any additional promotion, by offering a discount when someone subscribes. So that has been a really compelling value for people. When they sign up to get a subscription they are going to save 15%. They really appreciate that.
Clayton– Do you know roughly how many people signed up through your website versus having got some sort of outreach from you?
Elvis– I would say about half. So, about half are people that discovered the product on their own. One thing I think a lot of people probably don’t consider about a subscriber user base is that these are your most important consumers in terms of being able to get information about your product, and getting opinions. So for us, coffee is a seasonal product, you don’t have the same coffee year round, the way that we do things. So you will have any coffee for two to four to five months maybe, but then it changes, and so we like to use a couple of our subscribers who we are in close touch with, and we send them samples, to say “hey, how do you feel about this specific product?” That helps us learn about our roasting, and learn about coffee and also what our customers like. They are also a really great source of information in terms of requests that we come back to you guys with. . .You know, people are like “hey, I’m your customer, it would be cool if….” Right? That is probably the best information as a marketer or as a business owner that you can get.This is your customer, telling you I would spend more money or I would do more business with you if you had this feature. Or it would make it easier for me to do business with you if you had this feature.
Clayton-Are these people reaching out to you directly with these comments and insights? Or are you asking them?
Elvis– Mostly they’re reaching out, we have- I guess you would call them VIPs, these are customers that I have a personal relationship with. Or people that started out as subscribers that had a problem, who then contacted me with that problem, that now become comfortable sharing their opinions. I think that all of your customers have ideas, but it’s about fostering that relationship, being there for them when they have an issue that can help you build up the communication channel to have them comfortable expressing frank ideas.
Clayton– Wow, that’s pretty exciting. Do you have any particular stories that you can share?
Elvis– Sure, so very recently one of our customers, who has been a customer of the retail store since day 1 when we opened in 2013, he has a house in Berkeley, and a house up in the Mountains, where he spends a lot of time. He was putting on a wedding for his daughter, and he is a huge coffee nut, and he called me up and says ” I need to change my subscription so that we can do this wedding and get extra coffee! ” I said “yeah of course, why don’t we add these extra pounds to the order and get them out to you?” Then at the end of the wedding, he told me that ” we have a little left over, can we delay the next shipment?”
He is going to be the guy I go to once we are sure that the backend for customer changes are working correctly. He is going to get access- I am going to say “hey, you have been really great with making requests, we have done some custom orders for you, here is a way you can change that yourself, so that you can make sure that you have the right amount of coffee,” and I think that’s a really important balance for a lot of our customers. Making sure that the subscription shipments keep pace with their lifestyle.If there is a special event that they want more coffee for, or if it’s a vacation that they are taking, and they don’t need coffee delivered.
Clayton– That is really exciting, so what kind of challenges have you faced while running the subscriptions?
Elvis– A lot of the challenges are just ecommerce challenges in terms of fulfillment and product level, and making sure the right thing gets to the right place in the right amount of time. But there are challenges around subscriptions, at least for us. Our primary ones have been around flexibility, especially with people who have more frequent subscriptions. If anything changes, in their week or behavior, then they are going to get backed up, and they are going to have too much coffee. My concern is that I don’t want this person to cancel their subscription,and I want them to be really happy with it. I want to make sure we are flexible enough, that we can make those changes for them, in order to keep them satisfied.
Clayton– The final question here is: how are you focusing on growing your user base for the future?
Elvis– So one of the big long term strategies is for us to change the way we do subscription through our site. Originally, we were letting anybody subscribe to any of our coffees, where they could have that coffee delivered weekly, or twice a month, or monthly. But where we are thinking we are going is more of a rotating service, so it is more curated, and the Roaster gets to select a particular coffee that’s good at the time to send. Also, having people sign up for longer periods of time. So, instead of getting a subscription that is week-by-week or month-by-month, we are selling in two, four, or six month blocks. That’s going to be really big. One of the reasons we did that, and one of the ways we are focusing on growing our customer base is around the shipping price and around the total ticket price. We found that if we could get people to commit to a longer term that we were able to build some value in for them on the back end. You know, in terms of the per bag price, and being able to include shipping in the price of that coffee which we weren’t able to do on a week-by-week or month-by-month basis. As for expanding- in terms of retail, we are opening our second store next month. Each store that we open is going to bring its own consumer base, people who would be interested in getting subscriptions, and we are also doing a lot of promotion any time that we go out, and we are promoting subscription to anybody who just orders a “one off ” bag of beans online. We think that there is a really high potential in getting that person interested in subscription, since they are already purchasing the coffee online. How do we get them to think about getting it delivered to their house periodically, instead of having to go online and check out every single time.
Clayton– Are you doing any outreach as of yet or is it something that you are thinking about in the future?
Elvis– Well,we market via email to all of our customers who have opted in every week, that includes subscription promotions, and we also have a little flier that goes out in boxes of coffee that people order saying “hey, if you love this coffee save 15% and subscribe!” So I think that’s a really easy way – people see that and then they enjoy the coffee, so hopefully they will want to save 15% and get it regularly.
Clayton- Do you have any pictures of these fliers ?
Elvis– Yes, I will send you an example!
Clayton– That’s pretty much all my questions. Do you have any other experiences or insights that you wanted to share?
Elvis– In terms of subscription and online sales- yeah, it is about building relationships with your customers. Honestly, one of the easiest ways to do that is to very quickly and honestly respond to any negative feedback that you receive. I think that anybody is willing to come out and say “hey this doesn’t work for me” and give you the chance to make it right is really special, and some of those customers are now our best customers, the biggest brand fans. I would say don’t look at customer service and dealing with issues like it’s a negative thing, it’s a positive- it really builds the integrity of your brand and your business as you grow.
Clayton– Thanks so much for jumping on this call, I found it very fascinating.
If you want to listen to the audio of this conversation,here you go: