The carrot or the stick in business? How your morning coffee could provide a good business lesson

By Amos Dzumbira

 

One thing that is non-negotiable for most people is their morning cup of coffee. I didn't think I was one of those people but it turns out I might be. 

 

A few days ago, I was buying this essential treat (or as some would call it a modern-day human right), when the lovely barista at Starbucks kindly told me I now have to pay an extra 5p for the paper cup. 

Now, like the next person, I have heard of the issues of waste coffee cups and how they are very difficult to recycle. In fact, a fellow startup at Launch22, Ayswap, is trying to tackle this problem by giving reusable cups with the coffee subscription service they are working on. 

 

Single use coffee cups have been an environmental nightmare since they were invented so my first thought was, why is Starbucks doing this now? With that in mind, I decided to look at what other coffee chains are doing. 

 

Of the three biggest chains, it turns out: 
Starbucks charges customers 5p extra for the paper coffee cup and rewards 25p off the cost for bringing their own cup; 
Costa rewards customers with 25p off the cost of coffee for using their own cup; 
Caffè Nero rewards customers with 2 stamps for using their own cup.

 

The question then becomes which is better? To reward your customers for doing the right thing, or to punish them for not being able to?

 

I am sure there are times when the carrot is not enough and you also need the stick. But in this day and age of the more eco-conscious consumer, surely it should take a bit more before resorting to the stick?

Personally, I believe in rewarding your customers. Considering the problem with paper coffee cups is not a new thing, and at the time of writing this, there has not been any tax introduced for coffee cups similar to the one for plastic shopping bags, you could be excused for feeling like this is a big corporation taking advantage of a trending topic to raise their margins. 

 

However, to be fair, Starbucks says the money raised will go to supporting recycling and sustainability efforts by working with an environmental charity. But if their goal is to be a socially conscious company, they can do this without the extra charge to consumers, similar to the way their competitors are handling this issue.

Surely rewarding customers for doing the right thing is a better alternative? If that’s not making as much of an impact, then creating a conversation with consumers to make them understand what the company is doing and why it is doing it should be the next step before bringing out the stick.

 

That's what we are all about at Yontras, so you might say I am coming at this from a biased point of view. We believe companies should always aim to produce a win-win scenario between themselves and their customers, and there shouldn’t be any losers in business. This is the outcome we provide for our users and the businesses we work with.

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By joining Yontras, the one stop refer-a-friend marketplace, our users experience the “carrot” feeling everyday by getting rewarded, usually in cash, for referring products and services to their friends, family and acquaintances. The person referred gets a reward as well, either in cash or in a discount on the product/service on offer. As a result, the referrer is happy, the person referred is happy, and the business is happy since they gained a new quality customer. All in all, a win-win-win scenario. 

 

Customers are more aware of how business works these days and expect a bit more from the businesses they deal with. Opening a dialogue with customers, educating them and rewarding them for their loyalty goes a long way to retain them. 

 

Visit our website yontras.com to find out more about joining and getting rewarded for referrals and recommendations you make all the time. You can also follow us on social media @yontras (Twitter & Facebook) and @yontrasmarket on Instagram, and leave us a comment on which other products or services you would like to refer to a friend.

 

Maybe next time I buy my "essential treat" in the morning, I will be rewarded for bringing my own cup, and not punished if I forget it that day. Or maybe I'll just stick to the amazing free coffee I get from my shared workspace at Launch22 London. It’s pretty good coffee!

 

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Interested in working alongside individuals with disruptive business ideas like Amos! Then contact us at info@launch22.co.uk