What This One Tea Shop Did Differently To Make Me A Long Term Customer

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Several years ago, my wife and I made a conscious effort to remove sugary drinks entirely out of our diets. No more high fructose corn syrup. No more Boba milk tea and no more delicious milkshakes.

For my wife however, cutting out sugar was particularly difficult because she hates the taste of water. (Given that water is tasteless, I personally don’t see how you could possibly “hate the taste” but that’s a topic for another discussion).

Anyway when we’re not drinking water, we both drink a lot of tea because it tastes good and there are 0 calories associated with it. It’s a win-win.

One day, we were casually strolling down the streets of Palo Alto when we noticed a brand new tea shop open up its doors on University Ave. It smelled amazing so we decided to go in and take a look.

Tea Store #1

tea leaves
A bright and bubbly girl came to greet us and she started asking us questions about what type of tea we liked.

Do you like fruity tea?
What about decaf?
How about ginger tea?
My favorite is this coconut jasmine blend. Wanna to have a smell?

Our sales clerk was extremely knowledgeable about tea, super enthusiastic and she must have spent over 20 minutes with us as she brought down a dazzling array of different teas for us to see and smell. We were in heaven.

And after looking at over 20 different flavors, we asked a simple question.

Would it be possible to have a taste of these 3 teas please?

After a brief pause, here’s how the conversation went…

Clerk: At our tea store, we don’t force you to buy a large amount of tea. There are no minimums. You can buy as little or as much as you want and we’ll charge you by weight. Do you want to buy a sample of these 3 teas?

Me: Can we just try a little sip of each? I want to make sure that I’ll like them before committing.

Clerk: Of course! You can purchase a cup of any flavor in the entire store at the tea counter right over there. How many cups would you like us to brew?

Me: Actually, I just want a small taste of the 3. Just a little sip will do.

Clerk: How about just buying a single serving size? There’s no minimum order and no obligation whatsoever!

After a little back and forth, we ended up buying enough tea to brew 2 cups of each flavor and ended up paying about 5 bucks.

Overall, it was a very pleasant experience. Our sales clerk was very helpful and we were excited to try our new tea at home.

Tea Shop #2

tea pot
The next day, we decided to go to the local mall because we needed to buy some new clothes for the kiddos. And that’s when we walked by another tea store.

Like tea shop #1, they offered a ridiculous selection of different teas and the staff was very helpful. Just like the other shop, we spent quite a while going through and taking in the delicious aromas of 15-20 different teas.

But because of our experience with tea shop #1, I was a bit hesitant to ask whether we could try the teas we liked. But then a funny thing happened. The clerk flat out asked us if we wanted to try any of the flavors we selected.

Me: Do you mean that we can actually have a quick taste?

Clerk: Of course! Try as many flavors as you like and we’ll brew you a small cup of whatever you want.

After hearing his offer, my wife and I couldn’t resist and decided to try 3 of the flavors that we liked. In retrospect, we wanted to try more but we didn’t want to trouble the clerk to brew more than 3 different pots when there were other customers waiting in line.

Anyway after we tried the 3 flavors, we decided that we liked 2 of them and ended up buying 2 medium sized containers of each for a grand total of 50 bucks.

The Outcome

Cups Of Tea
The upshot of visiting both of these tea shops was that we had a lot of new tea to try at home. And what ended up happening was that we liked all of the teas we bought from both tea shop #1 and tea shop #2. But here’s the thing.

We ended up finishing all of the tea from tea shop #1 and haven’t been back. Meanwhile, we’re still working on the large canisters from tea shop #2. And by drinking it everyday, it’s starting to become part of our daily routine.

In fact, we like it so much that I’m sure that when we run out, we’ll go back to tea shop #2 and get a refill.

Plus, there’s another kicker that I forgot to mention as well. Tea shop #2 also got our home address and has been sending us free tea samples in the mail. While we haven’t particularly liked any of the samples so far, it’s only a matter of time until they hit the jackpot.

The Lesson

Now let’s take a step back and review what just happened. Tea shop #1 lost out on a potentially bigger sale and made a grand total of 5 dollars from our transaction. Given the cost of the bags and the clerk’s time, I’m guessing that they probably broke even or even lost money on the transaction. Plus they didn’t get any of our information either.

Tea shop #2 got us to fork over 50 dollars and they probably snagged us as a long term client. In addition, their snail mail marketing efforts are bound to hit the jackpot with us at some point and we’ll be back for more.

So if there’s a lesson to be learned here, it’s that reciprocity is a very strong force. Because tea shop #1 didn’t put in the extra effort of letting us try the tea, they not only lost out on a larger transaction but we also felt somewhat nickel and dimed as well.

They managed to make a small sale but if you think about it, it’s a pain in the butt for a customer to have to physically go back to their store to buy more tea. They should have spent some more time and tried to close a larger deal. Also, they should have given us some free tea in return for our information like the other shop.

My guess is that tea shop #1 didn’t want to deal with a bunch of people coming in to try tea and not buy anything. And the fact that there’s no minimum purchase means that the probability of making a tiny sale is a lot higher as well. This strategy is no good.

Meanwhile, tea shop #2 forces you to buy a larger quantity of tea but at least you know that you’re going to like what you are buying. Plus, the extra effort of allowing you to try as many flavors as you like creates what I call a reciprocity dilemma.

As soon as my wife and I tried a single cup of tea, we already felt obligated to make some sort of purchase. And the fact that tea shop #2 had a decent sized minimum order quantity meant that they were going to close a larger sale no matter what.

And to top things off, tea shop #2 was very wise to obtain our information in return for sending us free tea samples via snail mail. How can anyone resist free tea?:)

So let me ask you this. Are you going above and beyond to gain a new repeat customer? Are you using reciprocity in your business? Are there other businesses that you’ve encountered that use similar techniques?

Let me know in the comments below.

photo credit: A Girl With Tea Christian Kaden caruba

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15 thoughts on “What This One Tea Shop Did Differently To Make Me A Long Term Customer”

  1. Savvy businesses in this type of enviornment will quickly realize that the up front ‘costs’ are merely an investment toward more sales if handled properly. Ice cream places often are more than happy to give you a small sample because they know that more often than not, once you get a taste, you’re hooked. Same goes with your tea experience.

    If I were you, I’d send Tea Shop 1 an e-mail with the link to your article, and just note that although they did nothing wrong, they could very well reap benefits by simply tweaking their policy.

    1. Haha! Send then an email with a link to your article, that would be great! Then go check out their store in a few months and see if any changes have been made.

  2. I totally agree. While giving a taste of ice cream is trivial compared to tea, making a small pot of tea takes like 5 minutes. Plus, it’s actually really easy to mess up tea too by overbrewing which can affect the taste.

    It’s better to let the customer taste it as it should be tasted rather than leaving it up to a customer to potentially mess things up.

  3. Lars H says:

    I mostly agree with you, but I’m going to put on my Devil’s Advocate hat anyway.

    If the other tea shop is the kind of shop where some people come to sit down and enjoy a cup of tea, and others come to buy tea to take home, it makes sense to charge for a cup.

    If you start giving away cups to anyone who claims they are looking for something to take home, then it devalues the cups that the other people are paying $5 for.

    It just requires a smoother way to sell it, by pointing out that you can have a cup of anything at the tea shop to try it and lots of people come here just to have a cup of tea, and that “just a sip” doesn’t give you enough opportunity to really decide if you like it or not and the only way to really decide is a full cup.

    And also, do you send out free samples of linen napkins to every soon to be bride who calls you up and asks? Sure, it’s different with a business that is built to be a repeat purchase type of business versus a one time buyer kind of business. But still….

    I’m loving the way you fit in the part about “given that water is tasteless” into the blog. Now I’m SURE your wife will be convinced you are right about that. Ha ha.

    Do you always start talking to people who have some kind of business and start asking them a million questions about how they run their business and how this works and that works? I do that all the time. Most of the time people are happy that you are interested, but sometimes people get freaked out like you’re asking them how much money they have in the bank or something equally personal. I think maybe they are worried that I am about to open a competing business. It’s always totally awkward when that happens.

    Shop One is probably the typical small business response that you see where a store owner has been burned by doing something, and then nails up a lame sign next to the register so that it will NEVER HAPPEN AGAIN and really just ends up making all the rest of the customers think that the business owner is really petty and cheap.

    A few Looky Lous can make you crazy and irrational and ruin it for all the normal people.

    1. Hey Lars. I think that when it comes to tea (which is essentially free), you should just be giving the stuff out. But you have to experiment with the numbers. The free samples at shop #2 were like half of a shot glass and there were no seats at the place either so I doubt people would go there simply to get a sample and leave. Were you thinking that shop #1 may as well apply the Lars method of customer service?:)

      And you are right. I am the type of person to ask millions of questions about a business but I didn’t do it this time because I had the kiddos with me and they were acting up.

  4. Steve,

    I don’t think that tea shop #1 did anything wrong by not offering you a sample of their teas. They have no minimum purchase so they have to control their expenses more than tea shop #2 which probably factors in samples into their tea prices.

    Also, since there are no minimum purchase requirements at tea shop #1, sending out free samples in the mail is probably not a wise decision. Maybe a sample tea membership for $X per month would work better for tea shop #1.

    I hope that you go back and do business again with tea shop #1 in addition to doing business with tea shop #2.

    1. Nah. Tea shop #1 didn’t do anything wrong. I just think that shop #2’s business model works better for my demographic.

  5. Gwen C says:

    If your wife hates the taste of water, it could be the chlorine or minerals that she’s tasting. I can’t stand tap water because I was raised on spring water.

    Try getting a Britta Water Filter or something that. It makes water taste beautiful.

    I also love the taste of Smart Water, it had electrolytes in it, and I swear it quenches my thirst better than any other water on a hot day or after a work out. We sweat out electrolytes and need to replace them (usually through food like fruits and vegetables). But I crave Smart Water sometimes, it’s weird. It’s like my body knows that it’s good for me or something.

  6. Steve,

    I am a new loose leaf tea startup on line opening in a few months. I would love to send you some free samples when I am up and running.

    I am going to give away free tea for a year(365 cups)along with a teapot to start building my email list. I will let you know the analytics of the test when I’m done. Saw this done on another site and they got crazy good results.

    Love your podcast, I always get some great info for my site.

    Stephen

  7. I think tea shop #2 is a good example of Gary V’s jab, jab, jab, right hook!

  8. Mary says:

    Love your website, Steve!

    Everyone needs to work retail for 3 years so they “get” what’s going on out there.
    I know you have to write articles, but you can’t compare apples to oranges.

    I’m guessing store #1 is a small shop owner, hence careful of all spending.
    And, I’m guessing mall store #2 is a big box store, hence big bucks behind them.
    Retail is so different from the professional world.

    Find another NEW small tea shop & compare. They’re testing the waters & there’s a learning curve.

    We need to support the small store owners of the world. Otherwise, all we have are Home Depots, Walmarts, & Barnes & Nobles. It’s good to have & support both.
    Think about a family trying to make it to send their kids through school {think your website} or to just be independent, like you suggest – they’re just doing it in a different way than you are. Give them a second chance – after you try that other NEW small tea shop!!! If you get the same results, from this other New small tea shop as the mall store – I’ll back you! Otherwise, I’m with Lars!

    Still love your website!
    Mary

  9. I’m not really a tea fanatic but I love how the Tea Shop #2 offered you. For sure, they will have more future costumers.

  10. Having recently had several tea shop experiences, I can absolutely understand where you are coming from. I am impressed that the one shop uses snail mail to send samples, that’s a solid way to keep them in your mind, and as you’ve said, it’s only a matter of time until they hit the jackpot.
    The tea shops that gave me samples are the ones that stick out in my mind. In our quest to find a particular thing a few weeks ago (pure jasmine leaves), the places that proactively had us try things rise to the forefront of my mind immediately. So do the ones that struggled with, “do you have pure jasmine leaves, not jasmine green tea or black tea.” For some reason, as soon as you say, “I don’t want those two things” they try REALLY hard to sell you those two things.

  11. When I was in China, every shop offered free tasting. One shop stood out though. It had the better looking sales clerk. So I became regular for the next 6 months that I was in the country… (true story)

    Kidding aside, you made some good points. That extra step is usually the one separating you from that next conversion which can lead to higher customer lifetime value.

    Great post as usual Steve! :)

  12. As pointed out in previous comments, both shops have really different strategies and business models.

    However, I would have had the same reaction as you did. The 2nd’s shop tactic is brilliant because they “do you a favor” by offering free samples which makes you feel like you have to buy something in the end. You might not have to but I’m sure 90% of people wouldn’t feel good having a clerk make tea for them and end up leaving without buying anything.

    Even if both strategies make sense, the 2nd store makes a better first impression.

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