Management consultant Steve Hopkins used to chug Starbucks coffee. Then, in 1997 -- just out of curiosity -- he took a two-hour seminar on rare, choice teas at Todd & Holland Tea Merchants in suburban Chicago. After hearing store owner Bill Todd explain such fine points as leaf size and sipping, Hopkins became a convert. These days, he often offers Assam black tea instead of coffee to his clients. "Just the process of brewing tea and serving it to someone injects an ease and relaxation into the discussion," he says. And, more important -- to Todd, at least -- Hopkins has spent a hefty $4,100 at the store since that class.

Like other small-business owners, Bill Todd has found that such experiences can be a big boost for customer loyalty and sales. "Our seminars actually grow customers for us," Todd says. Classes can be taught by owners or visiting experts, for free or for a fee, on an occasional or regular basis. When done well, they can elevate a store's image and channel valuable feedback from customers.

What's the appeal? "The economy is doing really well, and when people have money in their pocket, they start to look at expanding their minds," says Jeff Creighton, CEO of EduPoint.Com, a Costa Mesa (Calif.) Web venture that lists 170,000 adult courses nationwide. Increasingly, he says, classes for adults are being offered in settings other than colleges, and that includes businesses.

For small businesses, classes can be a bulwark against competition from cheaper superstores. "Once you develop a personal relationship with the customer, he is less inclined to go somewhere else to save a few pennies," says Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce. That's a lesson that hasn't been lost on big, impersonal retailers, which use classes to show how friendly they can be. Home Depot, for example, shows customers how to install tile and lay carpet; CompUSA teaches how people to use Windows 98.

In Marin County, Calif., the independent Book Passage competes against discount giant Barnes & Noble, the bane of many a small bookstore. Its secret weapon: dozens of writing classes in such genres as memoirs, poetry, travel, and fiction. It even offers French, German, and Italian classes for its travel-book readers. "People who take classes here become very loyal customers. We have survived very well, partly because of that," says Elaine Petrocelli, the store's owner.

How do you know if offering classes is a good choice for you? The key issue is time: It's an extra burden on already pressed entrepreneurs, especially if you teach the classes yourself. And they have to be enjoyable: You need to love the material and be good at imparting it.

The next question is whether you want classes to be a moneymaker in themselves, a way to draw in new business, or an occasional perk for your steady customers. Three times a week, top chefs from the area and beyond come to The Cook's Warehouse in Atlanta to teach cooking classes. Owner Mary Moore estimates that the $35 per class fees comprise 20% of her gross revenues and lead to 10% of her sales. "Every time we make a sale, we ask if they want to register for a class," she says. One customer is Guy Arledge, a corporate communications director who first heard the pitch when buying a spatula. Forty classes later, he can dish up filet mignon with Bordelaise sauce and has spent about $2,000 on top-of-the-line cookware. "I'm fiercely loyal to the store," he says.

Passion for the mother country inspired Pamela O'Flynn to offer free Gaelic classes on Thursday evenings to her customers at the Rose Pub & Restaurant in Santa Rosa, Calif.: "We like to think of ourselves as a mini-Irish cultural center." The students are often of Irish descent or planning trips to the Auld Sod.

Where to hold class? The store is usually the best choice. At The Quilt Patch in Tecumseh, Mich., owner Kathy Seal teaches in a room connected to the sales floor and encourages customers to come any time they want help or company. Says Seal, whose class fees account for 20% of revenues: "My goal is to make this the 'Cheers' of quilting. You walk in the door, and everyone knows your name and the project you're working on." Or you might want to teach at a local learning center, handing out discount coupons after class. If you have several locations, that might be a better solution than trying to drum up a full house at each spot. You might not get enough people in either place, and the logistics would be a nightmare.

If you don't have the expertise, inclination, or time, you'll need to recruit local teachers or line up visiting celebrities. When Anna Boggess, manager of Nomadic Notions, a bead shop in Austin, Tex., needs an instructor, she scopes out her clientele. Her goal is to find someone who produces beautiful beadwork and "makes every person walk out feeling they're special." You can pay teachers by honorarium, in merchandise, or on a sliding scale based on class size.

What's the best publicity? Newsletters and prominent point-of-purchase displays are common. Local newspaper ads and flyers distributed at noncompeting stores also supply students. Be sure to offer participants extra incentives to buy, such as a 10% or 15% discount the day of the class. But the best payoff may be the feedback you get from this built-in focus group. It was in his seminars, says Bill Todd, that he heard customers complain that they couldn't brew a good cup of tea on business trips because of coffee oils in the glass pots in hotel rooms. His solution: A durable plastic traveling teapot that now sells briskly. For an entrepreneur, nothing quite hits the spot like a nice brisk sale.

By Meg Lundstrom in New York

SIDEBAR: Doing and Teaching
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