By Dan Cooper on September 26, 2018

How Random Free Coffee has Increased My Spending At Panera (and what your business can learn from it)

Me: “I’ll have a drink please.”

She: “Here you go (hands me cup), there’s no charge today.”

Me: (Looks around suspiciously … the manager is within earshot … why is this person handing me a free cup? Accepts cup)

“Thank you, I’m very grateful for that.” (goes and fills drink still waiting for someone to notice I got a freebie).

This has happened 10 times now at two different Paneras. It’s official, it’s a program … I think. It’s not the rewards program. This is different. They just hand me a cup and say something nice with no transaction at all.

I went to the internet to figure out what was going on. This is the only discussion on it that I could find.

One of the Reddit users in the article explains the phenomenon:

“You frequent Panera, regardless of having a rewards card or not and if your specific Panera is managed well, the regulars get drinks for free. Drinks have the highest markup in the cafe, about 300%. That goes for any restaurant and is considered Penny profit. To out it practically, a 16oz cup of coffee (medium) is all you need to sell in order to pay for an entire pot at Panera. Everything else is profit. That’s why you’re getting it for free. In other words, someone else paid for it, for you!!! … Our goal is to have our drinks as -.01% of our total food cost in relation to our weekly sales. Meaning we’ll actually “grow” coffee, according to our sales.”

Brilliant! Because I’m a regular they are willing to give me high margin products during off times to secure my relationship – in addition to the rewards program. Wow. Because of this, I am an even more loyal to them.

So what does that have to do with your company?

What do you do for your customer’s that can increase your engagement with them that makes financial sense AND creates a stronger bond?

What do you do that isn’t purely financial that is a value-added service that keeps clients coming back and talking about you?

Published by Dan Cooper September 26, 2018