A couple of blog posts ago I talked about the 'pay what you can' model that was being rolled out by Panera. Then today I came across a video on the BBC about the concept of Suspended Coffees. First started in Naples, the idea is that consumers can buy an extra or 'suspended' coffee for someone in need. Just like the 'pay what you can' model, it's a simple way to enable consumers to do something good as part of their everyday routine. It has certainly inspired Starbucks, which recently announced that it will shortly be rolling out a version of the Suspended Coffee scheme in the UK. However, whilst the original scheme was based entirely on trust - recipients of Suspended Coffees didn't need to prove that they justified the gift - Starbucks is retaining some control through partnering with the charity Oasis. For each Suspended Coffee purchased, Starbucks will make a donation to Oasis and coffees to the value donated will be distributed through the charity's community hubs around the country.
It's great that Starbucks is taking the Suspended coffee idea and using its size, scale and influence to take it to huge numbers of people around the world. My only question is whether, by formalizing the model through a more conventional charity partnership, the idea loses some of its magic? We shall see... In the meantime, look out for Suspended Coffees in a Starbucks near you.
Back in the days when I was fundraising for a nonprofit, my communications always focused in on the 'why' – what is the need or problem and why is it important that we address it now. Of course, the funders that I was talking or writing to were interested in what we were doing to address the problem, but, ultimately, the reason that they decided to make a donation was based on the difference that they thought it would make, the positive impact that they would have on the cause in question. Learning to present the 'why' in a compelling way was fundamental.
The importance of the 'why' reaches far beyond the realms of the fundraising world. Simon Sinek, author of Start With Why, gave a great TED talk back in September 2009 that explains the importance of the 'why'. It’s a great talk and I would thoroughly recommend watching it but, in short, the key point is that what inspired leaders and inspired organizations have in common is that they focus on why they do what they do, rather than simply what they do. He uses the example of Apple which sells its products by sharing the core belief that is driving the business – as Simon Sinek puts it, they say to us, “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user friendly. We just happen to make computers. Want to buy one?" It seems so obvious but it’s amazing how few companies actually do this.
However, where understanding the ‘why’ can be really powerful is in terms of understanding the broader purpose of a company – the reason it exists and what it brings to society/the world. Apple is actually an interesting example because it hasn’t done this. Whilst Apple clearly understands the ‘why’ in terms of product strategy and marketing, it has been slow to recognize, articulate or act on the social or environmental opportunities of the business. You could say that it's only identified half its purpose. In today’s world, consumers want more than that – they want to understand the ‘why’ of a company from a product/business perspective as well as a social perspective. By understanding and articulating their ‘why’ or ‘purpose’, companies are in a much stronger position to drive authentic, sustainability activity, derived from the core of the business.
Back in 2007, the band Radiohead released its album In Rainbows without a price tag. This was a deliberate ploy to give fans the freedom to pay what they thought it was worth. When you went to the website to download the album, instead of a price, the words 'it's up to you' appeared in the check out box. Although, it's difficult to get a clear answer on the success of this initiative - the band's Publisher did reveal that "Radiohead made more money before In Rainbows was physically released than they made in total on the previous album Hail To the Thief". Perhaps, though, this says more about the quality of the previous album!
Nevertheless, the concept of letting the consumer decide the price is a really interesting idea, particularly when you link it to a social cause. Back in 2003, Denise Cerreta pioneered her 'pay what you can' model, setting up the One World Cafe in Salt Lake City, Utah. Her vision was "to help people see the value of food as more than a mere consumable but rather, as a glue and a catalyst for healthy people, relationships and communities". It seems to have been very successful. The idea of paying what you can to support others who are less able to pay appealed to consumers' social conscience and generosity and what's more, as Denise puts it, "because customers choose their own prices, their portions tend to be more mindful and reflect that they will actually want to eat, with the result being little or no food waste". Denise now advises cafe owners all over the world on how to put the 'pay what you can' model in place, including a recent high profile adopter, the nationwide bakery chain, Panera.
For non-U.S. readers, Panera claims to stand for so much more than simply being a place to get great soups, salads and sandwiches. You can find out more by watching its recently launched Live Consciously, Eat Deliciously commercial:
Back in 2010, Panera trialed the 'pay what can model' at a new Panera Cares Community Cafe in St Louis. It went so well that now you'll find Community Cafes in Michigan, Oregon, Chicago and Boston. Just like the One World Cafe, the company plans to cover the cost of meals for those who can't afford to pay with money collected by those who overcompensate by paying more. According to an article in the International Business Times, the cafes bring in "an estimated 70-80% of the revenue compared to stores that stick to the traditional menu prices" but Ron Shaich, founder and CEO, claims "that's still enough to make a profit". If it continues to go well, the plan is to open other community cafes, as well as to roll out a 'pay what you can' promotions across selected menu items in over 1,500 of the company's locations across North America.
Of course there will always be consumers who take advantage - a number of Radiohead's so-called fans didn't pay a cent to download the album - however, putting a social cause at the heart of it does help reduce this risk. A 2010 study conducted by Leif Nelson of the University of California supports this - it found that customers at pay-what-you-want establishments are more likely to donate when charity is involved. What I like about the initiative is its simplicity - it's such a great way for a company to 'team up' and connect with its consumers to have a meaningful social impact in a really straightforward way. It also, crucially, maintains an element of choice. Let's be honest, for most of us, it's not really a choice because our social conscience tells us what we should do, however, the appeal feels much more positive; Panera is empowering us to be generous, not appealing to us, as many organizations do, through guilt.
A couple of blog posts ago I talked about the 'pay what you can' model that was being rolled out by Panera. Then today I came across a video on the BBC about the concept of Suspended Coffees. First started in Naples, the idea is that consumers can buy an extra or 'suspended' coffee for someone in need. Just like the 'pay what you can' model, it's a simple way to enable consumers to do something good as part of their everyday routine. It has certainly inspired Starbucks, which recently announced that it will shortly be rolling out a version of the Suspended Coffee scheme in the UK. However, whilst the original scheme was based entirely on trust - recipients of Suspended Coffees didn't need to prove that they justified the gift - Starbucks is retaining some control through partnering with the charity Oasis. For each Suspended Coffee purchased, Starbucks will make a donation to Oasis and coffees to the value donated will be distributed through the charity's community hubs around the country.
