Taylor St Baristas Show How to Drive and Reward Customer Loyalty
Following on from their recent Crowdcube fundraising launch, the first of its kind in the UK, QSR spoke with Taylor St Baristas CEO Richard Shaer to find out more about the bond and what they plan to do with the proceeds.
Why did you choose to raise money via Crowdcube rather than via bank finance or private equity investment?
It echoes what we’ve done in the past but in a more formal way. We are very positive about crowd funding for businesses like ours which have a very dedicated customer base that is passionate about our product, and that was really the driving factor behind this choice.
Have you raised money in a similar way before?
No, this was the first time, and really done off the back of the fact that a huge proportion of our customers are regulars. We wanted to integrate them and have them be a part of the journey of our growth. You’d be surprised how passionate people are about their coffee shops.
Where did the idea for interest payments being offered in the form of cash or coffee come from?
We decided on the coffee option as a way of giving back to people. There was a lot of thought that coffee being high margin might mean that the offering of a ‘coffee coupon’ would be more profitable for us, but that’s not true. We were substituting our revenue. Offering a 12% return is effectively giving investors a 12% discount on their annual coffee bill, so we were designing this element with them in mind. An interesting thing to think about is that for an investment of £5,000 you would earn a flat white in interest every day for 4 years, and then receive back your £5,000 at the end of that time. We also have an on-line store so investors who moved away would still be able to use their ‘coffee coupon’ to buy their beans from us etc, so the choice of this option is not restricted to use in store.
Cash coupons on your fundraising come with an 8% coupon, while the ‘coffee coupon’ option pays 12%. How did you decided upon the different rates of return?
We believe the 8% cash return is competitive, and the 12% is just something that we thought would be an attractive option for specific customers, perhaps those who are in walking distance of a Taylor St branch and use it daily, and we wanted to give them something more.
What has been the take-up so far between the two coupon options?
We haven’t seen the analytics for that yet. However within 4 ½ days we’ve raised £280,000.
What are your plans for expansion once you’ve raised the funds?
For the moment, we are focussed on our city spots. It’s a customer we know well and it’s something we hope to continue with.
