Whether you’re a small start-up, artisan, retail or industrial baker, competition will be fierce – after all who doesn’t love a slice of cake or a fresh loaf of bread? South Africa has long been a nation of coffee lovers, so bakers face more competition than ever, with there being plenty of localised hybrid stores that might impact your profit margins. While your main job may be to produce wonderfully tasty and tempting bakes, you must never forget that you also have a second hat to wear: that of the marketing and sales expert.
It’s crucial that your bakery has a competitive advantage in your local area to drive sales to your front door – but where do you start when the shopping centres are peppered with bakeries all vying for your customers’ hard-earned cash?
KNOW YOUR CUSTOMERS
In order to run a successful bakery, you need to understand who your customers are. Building up a customer profile can take time but it can really help you to hone the menu of what you offer and ultimately where you choose to focus your efforts.
This isn’t just about plumping for the type of fare that brings in the biggest profits either. But about understanding what your customers want. Products with higher profits are only going to be a winner if they’re actually making it off the shelves.
Smaller bakeries rarely have the luxury of being able to devote resources to mass marketing, but you can drill down into who visits your bakery and try to find niche bakes that are in demand and aren’t available elsewhere locally.
Start by wandering your local neighbourhood and paying attention to what you see – are other shops catering to the well-heeled or aimed at budget-conscious families? Is there a local school close by, or lots of office buildings? If you can, try to allocate a member of staff each day who is responsible for noting down how many people visit the bakery and what they buy.
From this basic information, you can begin to formulate a plan for what types of baked goods you offer. If there’s a school nearby, you could ensure that at the end of the school day, you have a good supply of after-school treats available; these should be both affordable and appropriately sized to make them more tempting to parents, while colourful and attractive to school children.
If you’re in an area populated by high earners then you may choose to focus at least some of your efforts on bespoke cakes, catering for birthdays, celebrations, and dinner parties. Similarly, sandwiches and lunchtime favourites should be in good supply at key times in the day if you’re surrounded by offices and hungry workers.
Once you know your customers better and have started to cater to their requirements in terms of what you offer, you can also begin to think about how you can serve them better. For example, busy office workers like the grab-and-go options so you can focus on speed and convenience. Special occasion bakes require the utmost attention to detail and clients will expect superior customer service so make sure you have the right customer support in place.
Another factor in knowing your customers is knowing them individually. Especially for smaller start-ups or artisan bakeries, knowing your customers’ names helps build a relationship with them that they will not find anywhere else. If people give you their birthday when signing up for your email newsletter, you can send them special deals every year on that day. This makes your connection to your customers personal and will make you stand out in the crowd.
UNDERSTAND YOUR COMPETITION
Pastries, cakes, and bread are obviously very popular items, which in turn makes the industry over-saturated. But knowing your competition will help you stand out from it. It allows you to discover gaps in the market that you can address. There are many ways in which you can learn from your competitors.
DEPLOY UNDERCOVER TACTICS
Don’t just snoop from the outside – get inside your competitors’ businesses and trial them for yourself. For the cost of a brownie, you can learn how they operate, what they offer, and understand how they make you feel as a customer. Is there anything they’re doing that you think works really well and you could easily implement? Is there anything that turns you off as a customer – if so, make sure it’s not present in your own bakery.
AUDIT YOUR REVIEWS
Never forget that the customer is (nearly always) right. Take the time to find out what they’re saying about you – both the good and the bad. This can be tricky, but is well worth the time, as this feedback from your customers is absolutely vital to shaping your business. You can also think about doing this for your key competitors – and learning from their own mistakes or successes.
Start by Googling your “business name and reviews” to see what it throws out. You can also trawl social media for any mentions to see what people are saying about you. Importantly, once you have this information act on it. Focus on the positives by bringing in guidance to employees which ensures those positives become part of your brand. And make sure to address the negatives. If someone mentions queues were off-putting, think about how you could create two streams of customers – one literally just grabbing and going, and one who is eating in. If someone praised your brownie, think about adding new flavours to the line-up.
HIT SOCIAL MEDIA
Being active on social media is a key part of promoting your business, but it’s also key to ensuring that you’re one step ahead of the competition. Keep an eye on your competitors’ accounts too so you can see what they’re introducing and what their customers are saying about it. It also means you can respond quickly to any praise or criticism.
COMPARE YOUR STOCK AND SPECIALITIES
Social media can also be used to keep on top of the latest trends sweeping the nation. You can bet your bottom rand if one influencer names savoury doughnuts as the best thing since sliced bread everyone will be clamouring to try it. So, make sure you’re ready to try it with your customers. How does your own range stand up to what people are raving about on social media? Can it be tweaked to keep pace with these trends? We’re not suggesting you ditch any of your best sellers, but do try to ensure your stock list reflects what people are looking for. For example, recent trends to be aware of are healthier treats, vegan-friendly bakes and artisan bread. If you’re trialling new bakes, make sure to give them a fair trial to see how well they do. And try to introduce your new bakes one at a time, rather than overhauling the entire stock list.
FOCUS ON YOUR USP
To truly stand out, you need to figure out what you are offering that your competitors don’t. What makes you stand out? Why do your customers visit you? Narrowing that down as much as possible will help you understand what sets you apart from other bakeries.
Use your friendly staff to chat with customers to ask them informally why they choose to use your bakery. Visits to other local competitors will also help you to identify where you excel. If you’re the only bakery within a five-mile radius that is serving a fully organic menu, then make sure you shout about it. Likewise, if delicate piping or intricate designs are your things, use this to your advantage. Think about who would most likely want these goods and ensure you promote yourself appropriately: beautiful window displays displaying your baked goods and a catalogue of examples of past bakes could help position your bakery as the go-to for special occasions.
Identify your USP and then make sure that every customer – current and potential – knows about it.
Traditional methods like stamp cards or more modern options like online loyalty cards can greatly incentivise people to purchase from you. These will work well to encourage your clients to return regularly and for the cost of a baked good, you can reap the rewards of repeat business.
How you choose to implement them is down to you. Stamp cards are the simplest option: you can stamp a customer’s card each time they spend a defined amount, and once they’ve reached a set number of stamps, reward them with a treat. When choosing the amount needed to be spent, do consider the average spend per person in your bakery to make sure it is achievable. And consider that a treat will be better received as a reward than a loaf of bread for most people – and helps showcase some of your products.
If you can make the numbers work, you could try to incentivise specific purchases – for example, buy five cupcakes and get a sixth for free. But, before running incentives, you need to first know how much each bake costs you to produce and the profit margin. Your incentives don’t need to be about making money – which is unlikely to add up when you consider the cost of a cupcake – but is all about building good relations with your customer and encouraging repeat business. You don’t, however, want to be losing money.
You could also run a referral scheme if your services include personalised cakes and bakes. Offer every customer who orders a celebration or special occasion cake a 10% discount for themselves and a friend on their next order. A simple business type card with all the details on should suffice for this. Plus, it has the added bonus of creating a recommendation from a customer for your business, and that’s priceless.
As always, social media is an excellent benchmark for what’s big in bakes, so keep an eye out and be quick to experiment with new ideas and bringing them to market.
You also need to be aware of recent trends that are affecting the market. For example, in light of Covid-19, many businesses started operating a delivery service. For elderly customers or in areas with limited parking facilities, you could find that this trend is a useful one to help maintain levels of business. After all, if you don’t offer it, will your competitor instead.
Another outcome of the pandemic was the explosion in home baking. Savvy bakers were able to capitalise on this trend and sell baking kits alongside their own creations thus securing more customers. Think about how events impact your business and tweak your bakery offerings and operations wherever possible in response.
Sustainability has also become a big topic and one that is important to many of your customers. Even back in 2018, 81% of customers quizzed felt strongly that businesses should be doing more to help ease environmental concerns. How can you address this now – at a time when sustainability is at the heart of consumer choices?
LISTEN TO YOUR CUSTOMERS TO FIND OUT HOW YOU CAN HELP THEM
Out of all these tips, it is most important that you listen to what your customers have to say and adapt your bakery accordingly. You want to serve them in the best way you can and make their lives easier and more enjoyable with your items.
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