I talked last week with someone who is about to invest heavily in a new concept. His business plan centred around the recognition that his first-year sales were likely to be the best he would ever have. After that his sales would decline year-on-year and would only be boosted by an injection of capital every three years or so. Even then, sales would not return to the heady heights of his first year.
This is an alien concept to every operator I know, where like-for-like growth is usually the Holy Grail. With costs escalating year-on-year, many of them above inflation, a fall in sales has a direct impact on the bottom line. This is as true for the vast leased pub companies with venture capital backers as it is for the independent operator with a large overdraft.
This year is likely to be a challenging one for sales growth. Licensing reform will be distracting. Making sure that a business has the right licence in place for the future will cost some operators dearly in terms of time and money. Some operators will also be thinking ahead to life with a smoking ban. Others will be thinking about a summer without a major sporting event.
So, if most operators cannot afford to be as radical in terms of business planning as my intrepid entrepreneur friend, what can they do to guarantee sales and profit growth?
As usual, marketing any business to increase sales is all about common sense. It isn't about marketing jargon. It's about having a plan that can be implemented by those with a lot on their plate and marketing at the back of their minds.
Here's what those of you directly managing pubs, restaurants or hotels can do now to make a difference:
1 Take some time to understand the day-part split of the business. Which are the most important sessions? Which customers come in when? What do they spend and what do these different customers want at different sessions?
2 Act like your customers. If you have the time, read what they read and watch what they watch. It helps to understand the other demands on their time and money.
3 Take some time out. It's difficult, but running a business can be all-consuming - and that's the problem. Use the time to look objectively at the business. Where does it need to improve and change?
4 Step into your customers' shoes. What do they see when they park, walk to your building, walk in your building, sit down or buy a drink? Does it match with what you want them to see and experience?
5 Ask a friend. Is there someone who hasn't been to your pub or restaurant who could act as a mystery visitor and give you feedback on what's great and not so great? Particularly when you're not there.
6 Go to the supermarket. What are your customers buying? What are the trends? Sometimes, retail promotions can be a source of new ideas.
7 Visit your competitors - honestly. Some of them will be doing great things you can copy.
8 Know your location. What is happening in your community that you can become part of?
9 Ask your customers what they think. Some 90% of customers don't complain and one less visit a month can quickly turn into no visits a month. Customers will say what they think, but only if they are asked and only if you seem genuinely interested in their answers.
10 Be brilliant at something your customers want and need.
Marketing to drive sales should not be hard work. Just a small step in the right direction can reap great rewards.