Aris Silzars Display Technology Consulting



A Great Cup of Coffee...October 1999

"Here, let me make you a cup of coffee." Gianni motioned us to follow him as he got up from behind his desk and walked over to the kitchen counter that was an extension of his modest windowless office. On the counter stood a number of commercial-grade espresso machines of varying levels of complexity and production capacity. A large coffee grinder was positioned between the espresso machines and the stainless-steel sink. An adjacent refrigerator completed the equipment array. "Let's use this small machine that I think will suit your needs perfectly. However, please note that the coffee holder and steam wand are of the same heavy commercial-grade design as in the larger coffee-house machines."

Thus, began our adventure into the world of coffee making and espresso machines.

As Gianni continued his demonstration, first came the precise grinding of the recently-roasted coffee beans, followed by the careful tamping of this now wonderfully aromatic powder into the fine-mesh metal filter basket. Next, came the steaming of the milk that, with a slight repositioning of the steam wand, could be used to create either a cappuccino or a latte. From Gianni's running commentary, I finally learned what the difference is between the two. With each step, Gianni continued his tutorial covering the range of topics from the importance of filtering the water, to the need to control the coarseness of the coffee grinder, to how to adjust the quantity and stiffness of the milk froth, to yet other subtleties, since forgotten, for the process of making repeatably excellent cups of espresso, cappuccino, or latte.

I don't think it would have meant much to Gianni, but I wanted to congratulate him for his excellent understanding of manufacturing process control. I'm sure he wouldn't have known how to respond to my comments regarding "process windowing" or "statistical process control" but intuitively he was doing exactly that. He knew what the "incoming inspection" criteria were for each of his ingredients. He knew at each step what to look for to know that his process was in control, and if anything went wrong, he knew how to relate a particular symptom back to its cause.

Of course, the concluding step in the demonstration was the taste test. As Sally and I each sampled a cup of the product, we had to admit that Gianni had indeed made the best coffee we had ever tasted. As we migrated back to Gianni's modest and paper-cluttered desk, he proceeded to tell us the rest of the specifications of the machine and then wrote out the quotation.

Well, things are never totally perfect. The price was somewhat higher than we wanted to spend. We told Gianni that we would go home and make some measurements to see if the machine would fit our kitchen counter. While in itself this was a true statement, there was an agenda item left unspoken -- the one concerning the price.

Perhaps, by now you may be wondering, "How does one stumble onto a small business selling espresso machines from a one-room office in a nondescript office building, among car dealers and other merchants with big flashing signs, on a busy arterial, more than twenty miles from Issaquah?" By using the Internet, of course. Being the very thorough person that she is, Sally had started the process of learning all about espresso machines by not only looking in specialty stores but also doing a search using our computer. She quickly learned that most of the specialty stores weren't so special after all. Most of the clerks didn't know the products they were selling, the products were not all that great, and at least here in Seattle (Latte land?), the prices ranged from too-high to exorbitant.

In doing her research, she found many Internet sites that claimed to cater to coffee connoisseurs. Some were much better than others, and investigating them allowed Sally to identify the better machines, with their corresponding distributors and sales offices. Also, once the models of most interest to us were identified, it was easy to find the lowest prices being offered by the mail-order (Internet-order?) houses.

By the time we visited Gianni, there were three or four brands of machines that, from their specifications and prices, seemed to meet our needs. Clearly, one of them was Gianni's machine. Unfortunately, Gianni's price was -- also just as clearly -- too high. An east-coast Internet-order dealer offered the same machine for about 20 percent less, and there would be no sales tax to pay, only shipping. Among the other machines under consideration, some had interesting features and would possibly provide better overall value.

Naturally, we tried to be very scientific about our decision. But after our visit to Gianni, each selection discussion ended the same way: "Wow, that was sure a great cup of coffee that Gianni made for us." Specifications be damned, that was coffee with a memory. Not only that, we liked Gianni as a person, and as an extra inducement, he had promised to put us on his delivery route for the same delicious coffee beans that he had used for our demonstration.

But, what to do about the higher price? A more than 25 percent differential (including the sales tax) was clearly more than we wished to pay for one great cup of coffee and a friendly personality. On the other hand, we did not think it would be fair to Gianni to just disappear and, using the knowledge he had so graciously imparted to us, buy the same machine from someone else. It was time for some honest discussion.

We called Gianni and explained the situation. We told him what price was being quoted by the large mail-order house over the Internet. We also told him that we would very much like to buy from him and would also use him as our coffee supplier in the future. To our pleasant surprise, and without too much fussing, Gianni agreed to match the lower price. He said that this left him very little profit but that perhaps our future coffee business would help to make up for some of the lost revenue.

Are we happy with our purchase? Absolutely. We're still refining our process-control skills, but our cups of coffee are almost as good as Gianni's and at $0.25 for each cup instead of the $3.00 at the typical upscale Seattle espresso shop, we are already well on our way to recapturing our investment.

In completing this "search and acquire" transaction, we made use of the Internet, retail outlets, and a specialty distributor. The Internet got us started and provided plenty of general information on the important features of these products, and we were able to do a pre-sorting of what would meet our needs and to obtain detailed technical and price information on each model. However, we could not examine the quality of construction or try out the operation and feel of each machine. The Internet got us started but could not meet all of our needs.

This is not a temporary situation that will soon be fixed with more sophisticated software, search engines, or faster computers. It's an inherent limitation of the Internet, just as it is with mail-order catalogs. The Internet can never replace a showroom or a live product demonstration. (For this same reason, the SID Symposium and Exhibition are going to be around for many years to come.)

The retail stores should have been able to meet our need to examine the operating features of each machine. But what we found instead was a limited number of models, typically of inferior quality, and sales personnel who couldn't tell us much more than the price and available colors. Not one person in these "specialty" shops was able to give us a knowledgeable demonstration of the products they were selling. And even that would have been a long way from tasting a real cup of espresso made with each machine. In just a few weeks of relatively modest effort, Sally had become more of an expert on espresso equipment than these sales people.

Is it the strong economy that has caused stores to hire people who don't know and don't care about the products they are selling? If there is no customer service, for what purpose does the store exist? If it's simply to warehouse products until someone walks in and makes a purchase, then the Internet will win on convenience and price each and every time. (By the way, have you tried to find a parking spot in downtown Seattle, or any other large city, recently and would you like to know how much they charge once

Then, there was Gianni. With his enthusiasm and knowledge, and with his willingness to take the time and effort to show us what could be done, he captured our attention and our loyalty. He distinguished himself from the others. He made for us the two greatest cups of coffee we have ever tasted. How could we not give him every opportunity to meet our needs? The Internet led us to him and the Internet gave us negotiating leverage, but the sale was made by Gianni demonstrating the true meaning of customer service: having product knowledge, being willing to share it, and being willing to invest some effort in building a relationship with a potential do find one?)

Today, the Giannis of this world seem to be part of a vanishing breed. But, I think that instead of placing them on the endangered species list, the Internet will cause the opposite to happen. The stores with the uninformed clerks will be the ones that will not survive. The Internet and "mail-order" (WEB-order?) companies will soon cause them to go under. What will replace them will be "centers of expertise" -- relatively small enterprises based on providing what the Internet will not be able to provide. The Internet will facilitate the communication links that will allow these expert-based businesses to thrive in spite of competition from the large retail chain-stores. We will discover the benefits of these centers of expertise and the Internet will conveniently allow us to find them. How can we make intelligent product choices otherwise, especially for those products that are new to us, or for those that we wish to select with extra care?

As we discussed in last month's column, we technologists are just now beginning to understand the benefits and the limitations of the Internet. The financial community will take much longer to catch on. The Internet cannot do it all. I like e-mail, but not all the time. I like that it is almost free -- for now. But some of the time, I would rather make a personal call than compose a message on my computer screen. I would most likely use the telephone and FAX even more if they were also almost free. Of course, e-mail is especially convenient when you are spanning many time zones and when you are sending messages to multiple recipients. The ability to avoid direct confrontations would, by some, also be considered an e-mail benefit. Thus, the Internet becomes another communications tool to add to the ones we already have.

The Internet has given us virtually instant and world-wide access to information and products. It is breaking down the few remaining barriers to a true world economy. Anyone now can find the best and cheapest source of a product anywhere in the world. There are few remaining local price anomalies. Merchants and buyers now use the Internet to instantly establish what everyone else is doing. That can be both a positive and a negative. It is now much harder to find localized bargains but also easier to find a product's fair market value -- which is especially important for those dealing in collectibles.

The Internet will encourage the revival of smaller businesses, which will be able to provide their customers with the information and services that cannot be obtained any other way. And just as with a cup of coffee, have you ever been truly "Wowed" by a display from an examination of its specification sheet? I think for most of us seeing and believing aren't so different than tasting and imagining. Therefore, I salute you, Gianni, for showing us the future of retailing, real customer service, and how it can work interactively with the Internet.

In keeping with the theme of multiple paths and multiple choices, this column always provides you with several convenient ways to communicate. You may reach me by e-mail at Email, by telephone at 425-557-8850, by FAX at 425-557-8983 and by mail at 22513 SE 47th Place, Issaquah, WA 98029.