Regardless of whether you’re able to spend R25 or R85 on a cup of coffee, we all want value for money. So what is the value of that warming beverage? Perhaps it is expectation. I think, what you expect from that cup of coffee lies at the heart of what you see as its value and what you are willing to pay for it.
Let’s break it down a little. The price can be influenced by whether you’re standing in line for a takeaway or sitting in a coffee shop, your order being served in the finest porcelain. The price will most definitely be influenced by the quality of the brew. It also depends on your priorities at that moment. Do you want to soak up the view over a cup or are you in dire need of a caffeine-fix? Do you have time to linger or do you need it pronto? Lingering on a hotel stoep with coffee might make it more expensive, but getting it express-style can also increase its price from a convenience and availability perspective.
There’s a lot that influences our expectations and much of it is intangible or depends entirely on our mood or current situation. It’s not always an issue of what we can afford. Having said that, there might be a ceiling to what you’re willing to pay, even if your coffee is brewed by angels. And with the current global economic challenges, most of us are reconsidering our spending habits. We might consider something to be of good value, but still choose not to spend that amount. Specials also cost money and we might not be able to fork out the cash, even when it is a good deal.
We also have different priorities. Students might live on bread for a week if it means they can have a good party weekend. Parents might drive old cars and miss out on restaurant dinners, to ensure their kids’ school fees and sport trips. Foodies might be willing to pay more for an artisan loaf of bread and wine lovers might spend on expensive wines even when it means they have to cancel their Netflix subscription.
There is a basic value we all assume – regardless of your expectation, preference or pocket. In the hospitality industry, for instance, there is a basic level of expectation when it comes to quality, cleanliness, and service. For most leading brands and businesses, however, the standards or expectations are much higher than the basics. Other than the quality of the experience, I think a burning question is how to cater to all the different expectations. On the one hand, you have world-wise travellers willing to pay top dollar for unique and personalised offerings. Covid did, however, teach us a hard lesson when it comes to such exclusivity. What do we offer those who enjoy quality and the aspirational aspect of our brands, those who have to carry our businesses through the slow season, but whose spending power is significantly less?
Yes, we are rethinking tourism and just last week, I was inspired by the innovation within SA wine, but how do we practically cater to all the different expectations? There might be various answers to this question, but none is straightforward. Perhaps a sliding scale? Start with a basic offering that over-delivers on the beauty of your location, the authenticity of your experience, the quality of your service and the caring nature of your staff. Guests have a choice – from experiences that are personalised and exclusive, tutored or guided to a walk-in cappuccino for those who enjoy your brand, but can’t afford the exclusive offering.
Is this sustainable? There are many challenges when it comes to managing choices in a way that makes financial sense. You can perhaps afford a dedicated host and beautiful floral bouquets in your reception area when your guests order Champagne and caviar, but what happens when they only come for the R25 coffee? I get excited by the idea of over-delivering on expectations and offering exceptional value for money, but I have also been exposed to the challenges of such an offering from a budget perspective. Perhaps there will be another blog. I have to give it more thought.