Blog Post

Give this lid some coffee!

Simple coffee promotion creates both success and environmental concerns

I’ve got a little café that needs to grow. It’s in the ‘burbs of Brisbane, and I need to persuade our near neighbours to buy their coffee from me rather than from someone else.

Letterbox dropping is the cheapest and most obvious promotion: letterboxing costs more in time and effort than in real money, and it can directly target the people I most need to reach. But letterbox drops are not neutral: some are more successful than others, and it’s interesting to reflect on why.

My business has been open almost 2 years and we’ve tried letterboxing a few times, with varying success. When we first opened, we letterboxed twice – firstly a discount voucher, and later our menu plus a discount. We were pleased to get some response (around 2% of what we dropped), but in the chaos of starting a new business we found it difficult to keep up the effort.

After we’d been open about nine months, we started a joint promotion with a real estate agent. We designed a discount voucher for the back of the agent’s monthly property report, which was distributed to 1800 homes in the suburb. The only cost to us was our time and whatever offer we included (usually a two-for-one voucher for a meal). But the returns were low: our best result saw 23 vouchers come into the café, a return rate of just over 1%. Most months, the returns were well below 0.5%. We weren’t too disappointed when, after six months, the agent decided that the promotion wasn’t worth continuing.

Our most recent experiment with letterboxing couldn’t be more different. We wanted to attract attention while being light-hearted and friendly, offering our neighbours a free coffee in the hope that we’d then win them over as regular customers. But how could we attract attention in crowded letterboxes without spending much money? A simple flyer from us won’t get a second glance amongst the collection of glossy brochures, large shopping catalogues and bills.

Our solution was to give every letterbox a disposable coffee lid, attached to a voucher with the headline: ‘Give this lid a coffee!’.

We were aware that this promotion brought with it some risk. Take-away coffee cups and lids are in the news for environmental reasons, and we were conscious that some of our potential customers would see the promotion as wasteful. Wasting plastic lids by pushing them into letter boxes is not a gesture of environmental responsibility!

A bit of calculation showed that our promotion with 400 lids would use about 1kg of plastic with a total volume of about 2.5m3. When compared to the plastic that comes into our shop each week as packaging, it’s a trivial amount – but that’s not really the issue. We decided to go ahead and use the plastic at the risk of offending some potential customers.

We dropped 400 lids in total, with a 4-week expiry on the offer. The actual cost of the promotion was less than $33 – around $27 for the lids and $6 for the paper and photocopying. The letterboxing work was done by me and my children, so cost no real money (with some irony, I view of myself as simultaneously the cheapest and most expensive person involved in this business). A bonus to me has been some light exercise and time with my children.

This letterbox drop has undoubtedly been the most successful promotion we’ve done so far. From the 400 dropped, we had a return of 66 – 16.5%. I’ve always assumed that 2% is a good return rate for this type of promotion, so we can definitely claim success.

We had two written complaints about the plastic waste – both of them very polite, and both wishing us every success with our business. If two people made the effort to write to us, then it’s likely that 10 times that many (around 5% of the total) thought about the environmental concerns.

Most of the people using our free coffee voucher were new customers. We had many comments from people who had been meaning to drop in, saying that this promotion finally got them through the door. We’ve definitely seen some of those people returning and we’ve noticed a slight increase in our coffee sales – though we have no good way of quantifying that outcome.

My conclusions for my little business are two-fold:

  • Firstly, letterbox dropping is worthwhile, if the item dropped has some novelty value and if something about it makes it stand out from the crowd – my theoretical mind describes this as a novel format (the lid) for a low-involvement item (coffee) in a cluttered environment (multiple promotions in letterboxes), with a promotion style designed to show care but little expense
  • Secondly, environmental considerations matter when it comes to doing promotion, but the response from your audience will never be consistent. You need to decide whether it’s OK to risk putting a few people off side to achieve an outcome with the larger group.

And yes, the hunt is on for another novel letterboxing idea.

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