One of our core capabilities at CBX is the development of store offers and advisement of c-store clients on how their coffee program should function. I work on many of these coffee program offers and recently experienced an invigorating "my job applies to the real world" kind of moment.
The short-order restaurant next door to my apartment was recently bought, renamed and redesigned. While the changes were nice, they didn't change my opinion about the shop. I wasn’t going to order more and was unlikely to sit, much less, sit longer. But good for them for trying something new.

One recent morning, as I picked up my coffee and dropped $1.25 on the counter, the cashier informed me that the coffee was now $2.25.

My jaw hit the floor. (<em>$2.25 for drip coffee? What? When did that happen? It's drip coffee?! Even $1.25 is too much!</em>)

The cashier tells me they've changed their coffee brand and upgraded their coffee machine. (<i>Bewildered look still on my face.</i>)

The cashier (who may have been the new owner's relative) and the short-order cook (from the old guard) saw my reaction and looked embarrassed. "Yeah, sorry. There have been some changes." I threw down the extra dollar, muttering, and walked out with coffee in hand.

I know, I know—it's only a dollar, but an increase to the tune of 80%(!!). Why was I so annoyed? Because I felt that as a loyal customer, the rug shouldn't have been pulled out from under me.

Here's what should have happened:
<strong>1. Be upfront. </strong>A renovation, owner or name change does not necessarily lead to price increases. This surprise made everyone uncomfortable (me, because I was clearly unhappy about the change, and the cashier and the cook, because they saw my reaction). You're a local business! I see you every day. So let me know what's going on. I'll understand if you need to raise prices because rent went up, cost of goods increased – whatever. But I'd appreciate you leveling with me.

<strong>2. Even better, step change the increase.</strong> Perhaps the new owner should have increased it by $0.25 per quarter or every 6 months. Who knows. But go slowly on this journey of raising prices. It's a risky one.

<strong>3. Sell in the change.</strong> Promote the new product! If the coffee is organic, roasted on a Brooklyn rooftop or extracted from monkey poop… these are all good reasons to pay more. Educate me, so that I can make the right decision for myself.

Now, putting on a more strategic cap:

<strong>4. Keep an eye on your competitors.</strong> The nearby coffee houses and the local Starbucks all charge less than $2.25 for a small drip coffee. Sorry connoisseurs, but drip coffee is a commodity. There is nothing in my bodega's new offer that will steal market share.

<strong>5. Know your audience. </strong>The customer base of this greasy spoon is made up of folks who work at the local hospital, construction workers and local residents within a three-block radius. Yes, the redesign includes tables and chairs versus the old counter and stools. But will the locals pay 80% more for coffee that comes in craft paper packaging? Are they going to eat more in a canteen that now boasts a chalkboard wall? What would make those same locals stick with their old digs instead of venturing off?

<strong>6. Understand the context.</strong> New Yorkers are a unique breed. The limitless choices we have affect our value systems and sensitivities. We love a good deal. We're loyal and have strong ritualized behaviors. My advice: take advantage of these traits.

So now what? I think that free office coffee is starting to taste a little bit better.