Are you the owner of a small- to a medium-sized coffee shop? If so, are you looking to implement business processes that use digital technologies to increase brand loyalty metrics and drive sales and customer conversions to increase your Return on Investment and your bottom line?
Their questions are valid and deserve a considered response. Thus, by way of answering these questions, let’s consider the following discussion.
The business model, ROI method, and QSR description
At the outset of this conversation, it is essential to gain a working understanding of the following terms:
A succinct definition of a business model
A business model is essentially a “company’s plan for making a profit. It identifies the products or services the business will sell, the target market it has identified, and the expenses it anticipates.”
The Quick Service Restaurant Method
The QSR method is designed to leverage modern technology and marketing techniques to promote brand loyalty. Secondly, its intention is to leverage personalized digital customer service to increase brand loyalty and to drive customer conversions. Thirdly, the QSR model actively utilizes technologies such as the Internet of Things (IoT) to drive sales by personalized purchase suggestions.
The Return on Investment (ROI) calculation is a “performance measure used to evaluate the efficiency of an investment.” Thus, the best way to determine whether the cost to implement the QSR method and software is worth the money, is to calculate the return on investment.
And, the best way to describe this calculation is to cite the following example.
The ROI formula is as follows:
The Current Value of Investment − the Cost of Investment divided by the Cost of Investment.
The current value of the investment refers to the proceeds obtained as a direct result of the investment.
Let’s assume that the total cost of implementing the QSR is $50 000. And, the sales figures have the potential to increase by up to 80% after the QSR implementation. Thus, if the coffee shop turned over $6000 per week before the adoption of the QSR method, it will turn over $10 800 after the QSR method onboarding.
Therefore, your coffeeshop’s ROI calculation for the QSR is as follows:
Value of Investment = $10800 per week * 52 weeks = $561 600 per annum. Additionally, you have chosen to pay for the investment for over 3 years. Therefore, the forecasted value of the investment over 3 years = $1 684 800
ROI = $1 684 800 – $50 000 / $50 000 = 32.70%
It is essential to note that these are estimated figures and not actual numbers. They are merely designed to show the potential for the substantial increase in the coffee shop’s bottom line.
This discussion and practical example highlights the need to consider moving from the traditional marketing model to the QSR model. As described above, the impact of engaging with customers to improve brand loyalty and wide-spread brand adoption cannot be underestimated or disregarded.