Baking Up Business

After checking out the latest post on my fellow classmate Amelia Lak’s blog, I’ve hit a few conclusions on her topic of choice – whining – of my own.

She makes a strong point: “To save the reputation of your product once it has wronged a consumer, marketers need to contain the whining. More whining leads you to noticing even more negative aspects about the good, whether conceived or actual, who knows – it doesn’t matter. When you pass it on through word of mouth, it progressively becomes more exaggerated and far worse than what it first started off with.”

This could not be any truer. At the Bakery, we hear our fair share of whining from our customers, from our “stay-away-from-the-diet-buster” never-will-be customers, from other employees, from cranky children nearby, from their fed-up parents also nearby – you get the idea.

The most damaging form of whining, however, comes from our customers. Or more specifically, the customers we have lost. Picture this: a customer, after paying an exorbitant price for a small slice of diet-busting cake, eagerly tucks into the baked delight, expecting the advertised “moist, tender, buttery crumb” and the irresistible “zesty lime and refreshing coconut” flavour to bring intense satisfaction to her afternoon. Instead, she bites into a dry, stale, crumbly cake with no pronounced lime or coconut flavour to speak of. Enraged at this realization, she does what many modern consumers today do: rant online.

Bakeries, restaurants, cafés, and the like all face a similar problem in that online reviews could make or break their business. There are a ton of websites solely dedicated to reviewing food (and oftentimes service and location) and a ton of people who read them. Since the Bakery’s products are pricey and are often considered a shopping good, many consumers choose to read online reviews before coming out to make a purchase.

There are admittedly perhaps more negative reviews online of the Bakery’s goods than positive, but there is a possibility that customers who were satisfied with the Bakery’s products never felt motivated enough to share their experience. But what can be done to address all the negative reviews? How can this kind of word of mouth be contained?

It is my view that word of mouth online cannot be contained. Nothing can be done about that – people have unlimited access to the Internet and the right to express their opinion. However, I believe that one of the best ways to address negative reviews is to reply to them. It always impresses me when the owner or manager of a restaurant or business takes the time to go to these websites and thank customers for their review and respond to the concerns or issues that they had by posting comments of their own.

This shows exemplary, albeit a new form, of customer service, and can help reduce post-purchase dissonance and customer dissatisfaction. And what business couldn’t do with a little less whining?

Take a look at the photo above. Can you recognize and name that specific type of bread? If your answer is no, don’t feel bad. Hardly any of our customers can either. In fact, most of them can’t even pronounce it.

It’s ciabatta, an Italian white, yeast-risen bread known for its elongated, flatter shape and soft, porous interior. “Ciabatta” is also the Italian word for “slipper.” However, the only thing our customers are interested in is why this “squashed loaf” has so many gosh darned holes in it. Let’s see…because it’s supposed to?

This brings me to my main point. At the Bakery’s tourist trap location, our artisan bread line does extremely well. The location is a prime stomping ground for serious gourmands, chefs, and foodies alike. There are overpriced cheeses, meats, sauces, produce, seafood, and pastas abound. Our breads may also be expensive, but an identifiable market segment exists in that location for people desiring high-quality levain, spelt, semolina, and other unique loaves.

But at the Bakery’s location in the mall, sales of the artisan bread line are consistently flat. When my manager first informed me that the Bakery was launching their artisan breads at the mall, I was skeptical from the start. Her reasoning was that there was no current retailer of artisan breads anywhere nearby. I wonder if it ever occurred to her (or the marketing department, if one even exists) that there is, in fact, a reason why.

There is a Safeway meters away that sells loaves for a third of the price of our breads and a neighbouring, well-known Chinese bakery that rakes in enormous sales of Asian-style bread everyday. If you’ve ever had Asian-style bakery bread, you’ll know that it has nothing in common with crusty, dense, hearty European artisan breads.

If the manager (or marketing department) of the Bakery evaluated the segment attractiveness of our intended target market in relation to the mall’s geographic area and the demographics of the mall’s primary clientele, it would be realized that the market segment for those wanting artisan bread, especially in this area of Vancouver, is not attractive at all. The segment is not identifiable, substantial, reachable, responsive, or profitable.

There is no identifiable need for “fancy, made-to-impress” bread in this area. The number of customers who do purchase one of our loaves is dismal; it is not uncommon for us to sell less than ten loaves a day. Reactions to free samples of our bread vary, and some customers are even dissatisfied with the different taste and texture of our nothing-like-Asian-style breads. Reaching customers is difficult when we’re forbidden to leave the shop, and the Bakery’s online presence is near non-existent. As for profitability, the Bakery’s profits are clearly made from the sale of our other items.

I won’t be surprised to see the ciabatta go in the next few months or so. But if the Bakery was smart, it would be gone tomorrow.

Click on this link: http://sethgodin.typepad.com/. It may just be the most worthwhile thing you do today.

In addition to all that he already does and did, Seth Godin, a well-known American entrepreneur and marketing guru, keeps a blog. In this blog, he shares his insight on different aspects of the marketing world in the form of short but powerful quips that can inspire even the most energy-drained university student to do some hard thinking at the crack of dawn.

In his post titled “Loyalty,” Godin makes some thought-provoking remarks on the topic of customer loyalty:

“Loyal customers understand that there’s almost always something better out there, but they’re not so interested in looking. We’re loyal to sports teams and products (and yes, to people) because being loyal makes us happy. I think there’s no doubt that some brands and teams and politicians and yes, people, attract a greater percentage of loyal fans than others. Not because they’re bigger or better, but because they reinforce the good feeling some people get when they’re being loyal.”

So how can this message apply to a business like the Bakery? Well, the Bakery is certainly doing one thing right. It charges sky-high prices.

Think about it: charging the lowest price is not the way to attract loyal customers. As Godin puts it, “If your offering is always better, you don’t have loyal customers. You have smart ones.” If the customer knows he or she is buying the cheapest product available and getting a great bargain, any good feeling he or she might have felt for supporting the same business on a long-term basis would be negated.

So what is the best way to reward customer loyalty? If Godin’s definition of customer loyalty holds true, reward systems such as points programs only add to the original product’s value, thus making the product itself a more attractive offering. According to Godin, this detracts from the customer’s feeling of loyalty.

In my view, the best way to reward customer loyalty is to provide great customer service. By building a friendly rapport with a loyal customer and treating him or her with the highest amount of respect and appreciation, he or she would feel compelled to return because of something other than the products for sale, something that could be uniquely offered to that customer alone.

As usual, the enormous, freshly baked tray of the most temptingly gooey cinnamon buns arrives at the Bakery, ready to be sold and joyfully consumed. Just then, a customer steps up to the counter. “I need a cinnamon bun,” he says. Luckily, I had already begun to carefully separate the buns from one another, starting logically from the bottom corner. “And I want…the fifth row from the left, sixth one down.” Just my luck – it’s one of those customers.

Getting these customers’ desired sticky buns is no easy feat. By the time their bun is packaged to go, at least three other surrounding sticky buns look like they’ve been partially put through a grater, and I am covered in more caramel goo than Lady Gaga has on in makeup. It’s no joke – these buns are seriously gooey.

But what can I say? The customer will always get what he or she wants. For some customers, what they purchase at the Bakery are indeed specialty goods. The Bakery’s primary location is in a tourist trap, so serving customers who announce they “came all the way from Texas” or “made their annual summer road trip here” just for a heavenly taste of the Bakery’s cheesecake is not uncommon at all. Forget the fuel costs – these are specialty goods they’re here for! There is no way these customers are leaving the Bakery without exactly what they want in tow.

For some customers, but especially the ones ordering a pricey customized cake, the Bakery’s goods are a shopping good. They want a beautiful, high quality product for the best possible price, so comparing all alternatives is important to them. Believe me, cake shopping for a certain special occasion one day will awaken your inner Nancy Drew too.

Last but not least are the customers who purchase the Bakery’s products as convenience goods. And more often than not, it’s an impulse buy. Why? It’s simple. Nothing draws the immediate attention of a boyfriend/husband bored out of his mind from shopping all day than the sight and smell of food.