Coffeeshop Campers & the Honor System
One of the first decisions any coffeeshop owner has to make is what to do about the people who hang out all day studying, using the free wireless, and lounging on the couches, but don't actually spend any money. Sure, they spend $1.50 on a small coffee from time to time, but they nurse it for hours and take up room that might be used for other, paying customers.
If you're not a coffeeshop owner you might think that this is no big deal. After all, it's not like the person is using up costly products. They aren't eating free food or drinking free beverages. It doesn't cost any more to provide ten people with wireless than it does to provide one. And, they aren't using up a bunch of dishes that then have to be washed.
But, from the perspective of a coffeeshop owner, this is a huge problem. Here at CTTP, we need to bring in on average $100 PER HOUR simply to cover our costs. That means, if all of our customers were people who stayed for three hours and spent $1.50 for coffee, we would require 200 people in our shop every hour we were open, 7 days a week, just to stay in business.
Fortunately, not all of our patrons are quite so thrifty. We have lots of customers who buy more than a small coffee and many of them just drink (or eat) and run. We even have a large contingent of people who get their coffee and food to go. Nonetheless, at this juncture, our paying customers are not making up for the money our other customers don't spend, and this is a concern for us.
We have looked around a lot at how other coffeeshops deal with this problem and, for the most part, we aren't impressed. One strategy frequently employed is to disconnect the free wireless. Another strategy is to require a minimum purchase for every hour spent in the store. Some places even cover their electrical outlets, so people can't plug in their computers.
We can't imagine using any of these strategies at CTTP because they are fundamentally at odds with the spirit of our shop. When we opened our doors we wanted to be a warm, inviting, and inspirational space where people could come to get their work done, hang out with friends, and drink great coffee. Putting restrictions on what people can do while they are here would undermine that mission.
Beyond that, CTTP is well aware that the people who come to our shop represent a wide range of socioeconomic strata. Some are students living off of loans. Some are professionals. Some are homeless. Some are middle class American tourists visiting from out of town. Some are parents. And some are seniors living off of fixed incomes. As a result, there is a great diversity in what our patrons are reasonably able to pay for our services.
Since the last thing we want to do at CTTP is restrict who can and cannot come to our shop on the basis of income, we are determined not to introduce a mandatory minimum. However, that doesn't mean we can't expect our better-off customers to contribute their fair share of our revenues. For now, we are working off the honor system, trusting our patrons to do the right thing.
Which brings us to the question, what is a reasonable amount for us to expect a person to spend at our shop? After some thought, it seems to me that if every student or senior spent $3/hr, every working person spent $4 per hr, and every professional spent $5 perhr, we would be a lot closer to meeting our monthly costs without placing an undue burden on our customers.
What do you think? Do you have any ideas for addressing the freeloader problem that are in keeping with the spirit of CTTP? How much do you think is reasonable for a person in your situation to spend per hour spent at the shop?
Postscript: Right after I posted this blog entry, I stumbled across a post by one of our regulars, Kevin Burton, on the subject of free-wifi in coffeeshops. He makes some terrific points about how businesses should stop trying to discourage laptop users and start offering them other useful paid services to defray overhead costs. I think this is a great idea, but I would like to hear some suggestions about how to do this at CTTP while still remaining accessible to our lower income clients. What kinds of services could CTTP conceivably offer that would be of value to the laptop brigades?
If you're not a coffeeshop owner you might think that this is no big deal. After all, it's not like the person is using up costly products. They aren't eating free food or drinking free beverages. It doesn't cost any more to provide ten people with wireless than it does to provide one. And, they aren't using up a bunch of dishes that then have to be washed.
But, from the perspective of a coffeeshop owner, this is a huge problem. Here at CTTP, we need to bring in on average $100 PER HOUR simply to cover our costs. That means, if all of our customers were people who stayed for three hours and spent $1.50 for coffee, we would require 200 people in our shop every hour we were open, 7 days a week, just to stay in business.
Fortunately, not all of our patrons are quite so thrifty. We have lots of customers who buy more than a small coffee and many of them just drink (or eat) and run. We even have a large contingent of people who get their coffee and food to go. Nonetheless, at this juncture, our paying customers are not making up for the money our other customers don't spend, and this is a concern for us.
We have looked around a lot at how other coffeeshops deal with this problem and, for the most part, we aren't impressed. One strategy frequently employed is to disconnect the free wireless. Another strategy is to require a minimum purchase for every hour spent in the store. Some places even cover their electrical outlets, so people can't plug in their computers.
We can't imagine using any of these strategies at CTTP because they are fundamentally at odds with the spirit of our shop. When we opened our doors we wanted to be a warm, inviting, and inspirational space where people could come to get their work done, hang out with friends, and drink great coffee. Putting restrictions on what people can do while they are here would undermine that mission.
Beyond that, CTTP is well aware that the people who come to our shop represent a wide range of socioeconomic strata. Some are students living off of loans. Some are professionals. Some are homeless. Some are middle class American tourists visiting from out of town. Some are parents. And some are seniors living off of fixed incomes. As a result, there is a great diversity in what our patrons are reasonably able to pay for our services.
Since the last thing we want to do at CTTP is restrict who can and cannot come to our shop on the basis of income, we are determined not to introduce a mandatory minimum. However, that doesn't mean we can't expect our better-off customers to contribute their fair share of our revenues. For now, we are working off the honor system, trusting our patrons to do the right thing.
Which brings us to the question, what is a reasonable amount for us to expect a person to spend at our shop? After some thought, it seems to me that if every student or senior spent $3/hr, every working person spent $4 per hr, and every professional spent $5 perhr, we would be a lot closer to meeting our monthly costs without placing an undue burden on our customers.
What do you think? Do you have any ideas for addressing the freeloader problem that are in keeping with the spirit of CTTP? How much do you think is reasonable for a person in your situation to spend per hour spent at the shop?
Postscript: Right after I posted this blog entry, I stumbled across a post by one of our regulars, Kevin Burton, on the subject of free-wifi in coffeeshops. He makes some terrific points about how businesses should stop trying to discourage laptop users and start offering them other useful paid services to defray overhead costs. I think this is a great idea, but I would like to hear some suggestions about how to do this at CTTP while still remaining accessible to our lower income clients. What kinds of services could CTTP conceivably offer that would be of value to the laptop brigades?
Karin
24 Comments
2 References
View Printer Friendly Version
Email Article to FriendReferences (2)
References allow you to track sources for this article, as well as articles that were written in response to this article.
-
Response: viral marketingWe are exceedingly thrilled that you have stumbled onto this page dealing with get web site traffic. -
Response: CaravansCaravans and motorhomes for hire and to buy
Reader Comments (24)
My advice is to think outside of the box. Approach the problem from a different angle.
For example, free wifi is really the only way. Dealing with paid wifi is just too much of a hassle.
Charge for other things. I'd really like to have a small office to make phone calls from. Charge me $5.00 to make a call for 10-15 minutes. I can't go outside because its cold and noisy. I also don't want to take my laptop with me.
This at the very least might be a good experiment.
I'd also put up a policy WRT free wifi access. Free per one hour purchase.
A lot of students and anyone who hasn't had experience starting a company before is blissfully ignorant about the economics behind the thing. Just explaining things in a clear manner can go a long way.
With our economics 95 percent of our users don't contribute anything. We have 5 percent of our users that actually reward us economically so we try to cater to their needs.
Onward!
Kevin
I occasionally work at CTTP, and I probably only spend $1.50 an hour, tops. But when I'm in the area, CTTP becomes my default spot to grab a cup to go.
But customers should be smart enough to start spending if they want a table during a busy period. Otherwise, it seems fair to somehow intimate that they're taking up space.
What about selling stuff that isn't just for consumption on the premises? People will spend more on things they get to take home. The big guys add to their bottom line with CDs, gifts, you name it. You have books, games, etc. for the store that you could also sell for people to take home. Local zines? Copies of the posters on the walls?
One issue I have is I can only have SOOO much coffee and food. If the place I'm hanging out at is getting busy I make sure to either leave or buy something else. I don't want to be hurting any paying customers just because I'm in heads down coding mode.
Kevin
Take a look at your predecessor at that site, nobody ever went in there because, in part, because nobody ever went there. (It was also an odd store.)
I'd agree with the other suggestions here, add other goods and services that people would pay for, maybe more communication about the situation, and some limitations at some times of day.
I don't come in regularly on week days, but on weekends and when I have been in during the week, I haven't noticed that you are having to turn away people. Are there times of day when you do?
The other thing that you could do is to extend your hours. (What are your hours anyway, they aren't on your website?) Increasing the hours that you are opened lowers your $100 per hour, but it also increases the odds of someone coming in at another time.
There have been a couple of times on my way home when I thought about dropping in but you were closed. The $3-5 you might have gotten on that visit wouldn't have been worth it, but your problem is that since then there have been another 4 or 5 times that I considered coming in and thought, "No they're probably closed." I'd guess I'm not the only one.
As for staying open longer, we actually tried that at first and had to abandon the idea because our business drops off so precipitously after 6 pm. We may try it again during the summer when the days are longer, but for now we close at 8 pm every night except Friday (our open mic goes until 10). (BTW, thanks for the tip about our hours. I'll make sure they get posted here somewhere.)
I really like what everyone is saying about offering more paid products and services. The trick, of course, is to find a way to make these changes without compromising our most fundamental mission, which is to provide superior coffee.
I also like the idea of doing more to let people know how much it costs us to make all of our free amenities available. There must be a way to do this tactfully and it's a heck of a lot better than instituting a mandatory minimum.
2. Ray, a bunch of people staring at computer screens and not talking to eachother is NOT warm and inviting. That's what cubicles are for, not coffee shops.
3. I think making the wireless work better should be the first priority for CTTP, then worry about the people using it.
one word:
advertise.
However, if things in there weren't so borrring, and the staff were a bit more lively in their interactions with patrons, it may just make people more aware of their surroundings (and the fact that they've been sitting in the same chair for 2 hours after only buying a cookie).
Consider traditional japanese sushi restaurants - everyone is made to feel welcome by having the entire line of sushi chefs holler "How are you?!" at patrons when they enter.
Simple & effective way to let other patrons be more in tune with the traffic flow of the place - there will be people that start to ship off when they "hear" these new customers filter in and empty tables are scarce.
i think the service at coffee to the people is fantastic. and to say that the place is boring is only an insult to yourself... a coffeeshop is only as exciting as its patrons make it. this place has provided everything from games to books to decorations that can easily spawn political conversations. what do you do instead? you sit on your computer, as you said. There's NOTHING this place can do in order to change how you use the place, that's up to you to do.
also, as a whole, when the staff at restaurants are required to do silly things like chanting things all at once or singing or any other form of "excitement", it comes off as ridiculous and contrived 99% of the time. I don't know anyone who looks for a fucking Broadway show every time they go to a coffee shop. the people working at this place are more than proficient and kind to the customers, and i don't see how you could want or expect anything more.
At the VERY minimum *please* tell the guys if they have to reboot it to NOT leave it offline for 5-10 minutes at a time. This is maddening :-/
All you have to do is reboot it to loose the DHCP table. Even one second will be fine. There is no magic in reboot it and leaving it offline for 5 minutes...
Onward!
I'll ask Bob if he wants me to take a look at it.
There are hoards of geeks in SF looking for places to work late at night.
If you were open late you'd be the ONLY place in the Haight that could/would do that.
I think if you publicized it you'd do awesome! I'll help... I'll blog it (I have 600 subscribers and a majority of them live in SF).
You could try it for a week or so and see what happens.
Again you'd need to monetize it but there's potential here.
If having no internet for 10 minutes makes you mad, I think you need some anger management. Oh, and an internet connection at your house. That might help too.
A lot of us make our living on the net, and if we can't have access then we can't leave the confines of our work environment. If you are in the middle of admining a live server and the net goes off for 10 minutes it can be maddening, or potentially disasterous.
Wifi is what coffee shops are selling these days. Honestly it is the reason I patronize places like the Canvas.
Better wifi + better power + better place to work = more customers.
baus
Since I spend 95% of my time at the shop using the wireless, I am well aware of what a hassle it can be when the system goes down. We are doing what we can to have this resolved ASAP.
if you're working on something so important, you might want to consider using a land connection to the internet, not wireless. wireless is always unreliable, no matter what. even the best set-ups fail sometimes.
i just dont understand the mentality of people who buy a cup of coffee at a shop, and then sit in it for 6 hours and act as if they own the place. Do you really think you have some sort of "right" to sit around and freeload all day, and then COMPLAIN about the connection not being up to par at busy hours? I've been at CTTP when the net goes down, and you know what? I play some fucking solitaire for a few minutes and wait patiently.
If you're running such a successful business on the internet, why not invest some of your earnings on a connection at home? i mean, if a 100% stable connection is necessary.
Don't get me wrong, I think there are some kinks that need to be worked out in CTTP's system, but you people act all indignant and rude about it, as if you're missing out on some god-given right.
-Patrick
Think about it in the sense of car parking at a supermarket. The first X hours are usually free -long enough for you to shop - then you have to pay.
So, you could give everyone a little egg-timer (the one with the sand in it) when they get their coffee. The timer runs for e.g. an hour and you are implicitly telling them that that is their 'free parking' limit. After that, they have to come and buy something. Maybe one of your items for sale is simply the right to turn their egg timer over :-)
Obviously, this will be an honour system, but it might be just enough to make people aware of the costs.
By the way, I live in the UK but I do come out to SF every few months, so I will make a point of visiting (and bring an egg timer, just in case)
If it were my shop, I think I'd lean towards the latter. If that's the goal, I don't think it's unreasonable to block power plugs. Modern PCs can go more than three hours on batteries (longer if using agressive power savings or a bigger/extra battery). Running out of juice is far more gentle a way to turn a table than an arbitrary minimum purchase or a restriction of services. Also, although laptops are low power, I'd bet your electricity bill to run them is not insignificant.
There will always be the hardcore that have lots of batteries or beg to plug in their charger, but I think this would be the exception. You could even consider a battery charging service (and change for it). Airports and malls in Japan offer this, mainly for cellphones.
Matt
Also, how about tiered data speeds? The initial setup would require more hardware but could allow for weaning users off the wifi if they've been on too long. How do they reup their speed? By asking you guys. How do they ask? By buying a scone.
Just some random thoughts...
how hard would it be to do that? tiring speeds, that is.
-Patrick