Pricing

November 27th, 2008

This is the second post in a series that I started with Trust.  I want to examine a bit more closely what we communicate and can accomplish with pricing.

I hope you don’t mind if I use two theoretical espresso establishments.  One sells a shot of espresso for 60p, they carry no obvious branding as to which coffee they are brewing.  The second place sells its espresso for £1.80, three times the price.

What is interesting about this is that the 60p shot is probably less appealing than the £1.80, but you wouldn’t necessarily expect the £1.80 shot to be amazing or three times better.  In a world where most espresso is no good, the chance of finding a great one at that price (60p) seem absurd.  1We still make judgments on coffee’s quality based on its price but we’ve learned to limit our expectations when the price goes up.  There is, however, a threshold limit to that expectation.

Imagine now a place with a £4 single espresso.  As you receive the drink you probably say out loud “This better be good.”  Quite rightly – it had better be good, because this business has made an implied promise of how good your experience will be.

Those of us in the industry are always frustrated when coffee news on blogs and news websites receive hundreds of surprisingly angry people deriding the very idea of quality coffee, angrily denouncing coffee “snobs” or mocking those businesses trying to do better.

No, what will happen is that these people will go to the training sessions and forget them very soon after. Why? They work in coffee shops and it really doesn’t matter. It’s just coffee.

I think the coffee industry has to accept that we created these people, their anger and bitterness a result of our actions.

These people have probably tried to buy a better cup in the past, and in trying to do so have probably bought a more expensive cup.  It might be that that experience was in a Starbucks, or perhaps in an independent.  Either way they were so disappointed that they still feel the need to vent that anger on message boards.

Coming back to setting prices, and what we communicate with them.  If you own a cafe then look at your prices – what do they say about your coffee?  What did you base those prices on?  Was it on the chains you compete against or was it based on the prices listed in a business whose quality you want to emulate?

At this point I want to clarify that I am not suggesting pricing coffee in such a way that it develops the tag of exclusivity any further than it already has.  I hate seeing coffee as something exclusive – I want coffee to be inclusive.  We need to drive consumption, as higher consumption of better coffee is pretty much a win/win for everyone in the chain – from consumer back to producer.

That said I do want to wrap this post up by saying that I think we often fail to communicate properly through our pricing.  One of the last things we think about is: “What is this cup of coffee worth?”

  1. It is worth noting that a few places in London that do great espresso do it very cheaply – I am not saying cheap and delicious espresso is impossible  ↩︎

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