By Janet Attard
Last Updated Wednesday, November 18, 2020
What pivot strategies work to help small businesses do enough business to survive the pandemic? Read the stories of two bakeries and see how the tactics they have used could be adapted to your own business.
Image source: iStock.com
What do you do when your cookie business depends on tourism to survive, and Hawaiian tourism comes grinding to a halt due to the pandemic?
How do you keep your NY neighborhood bakery and cafe alive when foot traffic and orders stop and the ban on large social gatherings wipes out orders for wedding cakes, sheet cakes, and other large orders for baked goods?
Those were the dilemmas the COVID-19 pandemic created for two women-owned businesses on opposite sides of the United States. Although both sold baked goods, each found different ways to address their problems. Many of the tactics each used to bring in customers during the crisis are adaptable to other types of businesses. Here are their stories.
How a Hawaiian Company Grew Cookie Sales in the Pandemic
When the Hawaiian economy shut down to tourists in March 2020, Mitzi Toro, owner of The Maui Cookie Lady, a company that produces freshly baked, hand-rolled gourmet cookies, saw 70% of her business dry up. The company lost its kiosk storefront, which had accounted for 60% of revenues, and lost another 10% of sales from wholesale accounts in Saks Fifth Avenue, a large retailer in Waikiki,. and Resorts on Maui. The other 30% of her sales were online.
Her initial reaction, Toro says, was “panic, gloom, and anxiety.” Almost immediately, though, Toro realized panic would not bring in customers. To survive, she said, she knew she’d have to pivot and pivot quickly. So, “I went into the start-up grind again. I went back to square one and redesigned a plan of action to compete in social media in a very competitive market.”
Business Fundamentals Are Key to Successful Pivoting
In pivoting, Toro, a self-funded entrepreneur, leaned on training and counseling she had gotten from the Small Business Development Center location in Maui. With their guidance, she had learned to work on her business as much as “in” the business and had learned to analyze business operations and use financial reporting to provide status and profitability goals.
That analysis not only pointed to an online-only marketing strategy but also pointed up the difficulties she’d encounter with using online as her only sales outlet. One of the biggest of those was the price she’d have to charge for her cookies.
Located in Makawao, on the island of Maui in Hawaii, her labor costs, rent, and utilities were high compared to many other locations. So, too, were the cost of producing the cookies, since many ingredients had to be shipped in from outside of Hawaii. That meant she would have to charge about $7 per cookie, plus shipping, making the final cost to the customer about $10 each. Although Maui Cookie Lady cookies are very large, still, the issue remained: How do you get people to pay that much per cookie when they can buy other cookies (or make their own) for less money?
Strategies for Boosting Online Sales
To address the challenge, Toro implemented a number of strategies to get social media followers engaged and to encourage them to buy. Her records showed that her products were often bought as gifts, so some of the strategies were focused on growing gift sales. Many of the tactics she used can be adapted to promote other kinds of products as well. Among the steps she took:
- Focused on existing customers, particularly the loyal super customers who ordered repeatedly.
- Sent emails offering preview boxes of holiday flavors only to the customers who had previously made a purchase.
- Offered a local discount code to area residents once they closed the retail location.
- Each week, posted a thank you note naming and crediting all the customers who had placed orders.
- Constantly communicated with customers via social media so they could hear and respond to comments, and better understand their market.
- Limited specialty flavors and changed them frequently. Customers understood that if they didn’t buy when a specialty flavor was first offered, it might not be available again for a year or more.
- Focused heavily on presales for holidays and special events such as Mother’s Day, Father’s Day, and graduations. They added a calendar app to their website that allows customers to purchase gifts months in advance, assuring them they will get an order even though production is limited.
- Encouraged repeat orders by included a coupon code in each order which would entitle the customer to a discount on their next order.
- Enhanced the packaging for gift orders, since many customers did purchase the cookies as gifts.
- Studied social media options to discover new ways to reach out to customers on Facebook, Instagram, Pinterest, and Tik Tok.
Those strategies not only kept the business alive but resulted in May 2020 sales that were double the company’s sales in December 2019, which had been their best month previously.
The icing on the cake (or the cookies) came during the summer of 2020 when the Maui Cookie Lady launched on the QVC Network, a project she had been working towards for two years.
How a Queens, New York Bakery Shored up Local Business in the Pandemic
Meanwhile, on the other side of the nation – in Ridgewood, Queens, NY – Antonetta “Toni” Binatti, owner of Rudy’s Bakery and Cafe, experienced a huge loss in business when New York State closed down non-essential businesses starting the third week in March.
Although the bakery, which is the oldest operating bakery in Queens County, was allowed to stay open for people to purchase carryout items, “hardly anyone” was stopping to buy fresh-baked goodies to take home, Binatti says. Meanwhile, the café side of their operation – like other restaurants in NY- was prohibited from allowing customers to dine indoors at that time. Equally concerning, says Binatti, “Our delivery service app orders went down drastically because people were scared and concerned about ordering outside food. And, since there were no longer any large social gatherings our advanced cake orders all got canceled.”
Binatti was scared herself—both for the survival of Rudy’s Bakery and Café and for the safety of her staff and their families. Most of the restaurants and coffee shops in the area—including some name-brand franchises—had closed. She closed the shop for a week in April, then met with her staff to discuss the situation. “We made the decision together to stay open. We decided we are a family and we needed to be open to serve our community,” she says.
With the decision to reopen, Binatti “took a step back” and thought through how to move forward with store hours, staffing, production, and safety.
Focus on Community and Customer Relationships
One of the reasons Rudy’s Bakery is the oldest bakery in the area is that it kept pace and with the changing demographics and food of the community while also keeping in touch with its German roots. When the bakery first opened in 1934, its Ridgewood location was home to many Germans, Irish, and Italians. Today, there’s a large Polish and Latin community as well as a vibrant millennial artistic community. Now, the treats Binatti and pastry chef Cristina Nastasi offer customers include not only old-world favorites such as the Bienestich, Jelly Doughnuts, and Black Forest Cake, but also delectable such as croissants, frittatas, and panna cotta, Nutella Linzer Tarts, and Chef Cristina’s famous Oatmeal Marshmallow Sandwich Cookies. The bakery also has a line of vegan and gluten-free products.
Because the bakery is so well-known in the community, and the community is so important to its success, Binatti realized that to recover from the effects of the pandemic on their business, the business would need to focus on community needs and capitalize on the loyalty and word of mouth of their local customers.
Customer Focus Pays Off
Recognizing the sacrifices made by the medical community during the pandemic, Rudy’s Bakery began donating baked goods to medical workers at Wykoff Hospital in Queens which was a COVID Hotspot. When the bakery’s loyal customers heard about the baked good being donated, they chipped in, making it possible for Rudy’s to bake for the ER staff, the local EMTs, and even the FDNY.
When the shop reopened after that first week, they were greeted by many of their loyal customers who were happy to see the bakery open and ready to serve the community. Because many people were working from home, Rudy’s delivery app started to pick up, too. “People needed their Rudy’s coffee and dessert fix,” says Binatti.
Added a Care Package Option to their Website
Because of the increase in requests for deliveries, Rudy’s started their own delivery service. Then, former customers who had moved out of the neighborhood, started to call, wanting baked goods sent to family or friends who were still living in or near Ridgewood.
“We received a call from a customer who relocated to Florida, whose daughter was living in Ridgewood. She wanted us to deliver a birthday cake to her daughter, “ says Binatti. That call led to Chef Cristina suggesting Rudy’s offer a Care Package options on their website, and the shop began receiving calls from all over the US. “People have called from Philadelphia to Washington, from Iowa to Connecticut—we even had an international call,” she says. “People were calling to send their loved one’s gifts, to celebrate birthdays, graduations, or even to help uplift people’s spirits. To date, we have delivered all over Brooklyn, Queens, Long Island, and even Manhattan.”
Met Customers’ Needs for Small Portions and other Options.
Rudy’s Bakery started to attract new customers because many local businesses were closed. “They welcomed us to their daily lives because we were here to serve them and give them hope,” explains Binatti. “This was not just about delivering bread, desserts, etc. We were appreciated as essential workers and the customers were extremely grateful.”
Communicating with these new customers (as well as their loyal fans) led the bakery to make some additional changes in their offerings. “In addition to our Care Packages, we decided to add more small portions and individual desserts, breakfast, and lunch options. As there were no larger group gatherings, we had to accommodate a single person and small groups and still keep our menu interesting for all our customers. We pivoted and we succeeded,” Binatti says.
Advice for others
Binatti says her advice for others is to “Put safety first and keep moving forward. Believe in your customers, and community support. Don’t give up on your passion to serve people and keep them happy when they need it the most.
“Take a step back to see what your business is asking of you and come with a new plan and system. Don’t be afraid to think out of the box to keep business afloat.”
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About the author:
Janet Attard is the founder of the award-winning Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Follow Janet on Twitter and on LinkedIn