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Morning Briefing Strap Line
Fri 4th Dec 2015 - Friday Opinion
Subjects: Turning pub noers into pub goers, winning and keeping food awards, and getting to the heart of brand strategy
Authors: Kate Nicholls, Glynn Davis and Ian Dunstall

Turning pub noers into pub growers using the feminine touch by Kate Nicholls

The customer is always right – the customer is king. Two truisms that were drilled into me when I started working in the sector and which were very much to the front of mind as I attended the very first Pub Goers Conference in October.

Now, I have always had a bit of a problem with the idea that the customer is always right. Not because the principle is wrong – far from it – but because I spent lots of time when I first started working in the sector in rooms of men confidently (and often wrongly) telling me what women wanted, or in marketing meetings talking about different ways of segmenting the market, but always looking at our existing customers only.

It seems obvious that, in an increasingly competitive market, with next to no customer loyalty, we need to look outside our existing customer base. The latest research from Cardinal suggests that even those calling themselves regular pub goers and eating and drinking out on a weekly basis say they only visit their favourite pub two to three times a year.

So the fact the starting point for the discussion was looking at non-goers and interrogating their views, concerns and needs was music to my ears. And to paraphrase Cardinal’s research, customers fall into two groups – pub growers and pub noers.

Pub growers might not be firm customers, but they crucially identify themselves as potential pub customers and visit the pub at least three times a year. The good news here is that they have a going out habit – not always to pubs, but they are eating and drinking out – and their frequency of going out has increased and they intend to go out more often. There is 11% net growth in frequency of going out amongst this segment, so confidence is returning, particularly among Generation X and Y – the very markets many of us worry are turning away from going out.

The pub noers are those who don’t visit pubs frequently – less than once a year – and worryingly those people are much more pessimistic about their personal circumstances. They are going out less and less – almost two-thirds think they will go out less in the coming year and that is all forms of going out, not just pub visits. As always, the real competition is not pub versus casual dining versus fast casual, but going out versus staying at home.

There is a real polarisation between these two consumer groups and worryingly an increasing and growing sense of alienation with our potential customers – those who haven’t been to the pub in the past year are less and less likely to come back as time passes.

And when you look at the root cause of that alienation it is clear that their views of the pub are rooted in the past – dirty toilets, unsmiling staff, sticky carpets, not a good choice of food. These are pub stereotypes none of us would recognise from the modern, dynamic sector we live and work in. They are all ones we would gladly consign to the past – and indeed thought we had – but our pub noers are clearly disconnected from the modern reality.

And here is where my other gritted teeth moment – what women want – comes in. As the chief executive of Saint Nicks Fraser Brown observed, we are still a male originated and dominated sector – and men are far more simplistic and linear (his words not mine!) when it comes to commenting on what they like or dislike about the pub or your offer. He advocates all-female panels for customer feedback to his clients.

Asking women directly what they want and what they think not only means you get more sophisticated and constructive criticism, it will also address the ambience, comfort and service concerns, which are turning too many customers off pubs. So it could be key to tackling the pub noers too.

Two other key stats from the conference stood out for me – the fact that 51% of pub visits always include food, and a similar proportion are meal deals; and that just 26% of drink sales in branded pubs contain alcohol.

This is evidence writ large of the transformation our sector has gone through over the past decade. They probably don’t come as news to any of us operating in the sector, but I guarantee that they would be startling killer facts if presented to those customers who feel pubs are not for them.

They are also killer arguments to use against those other pub noers – some politicians, the police, the enforcers and, more importantly, the health lobby.

Pubs, clubs, bars and restaurants are not just night-time economy businesses, they provide valuable services throughout the day for tourists, residents and office workers – society generally and the cultural life of the community. They generated 8% of net new jobs in the last year, in all regions and for all skills but crucially for young people. And they paid more than a third of their turnover in taxes – funding vital public services.

So we have to work hard to address the “misperceptions” of actual and potential customers – our sector is broad, inclusive and progressive – and to ensure relevance. Get it right and we can turn those pub noers into pub growers.
Kate Nicholls is chief executive of the Association of Licensed Multiple Retailers

Winning and keeping food awards by Glynn Davis

For over a decade I judged an annual industry pub food awards and a key question I asked each short-listed chef was what they were most proud of achieving over the past 12 months as this could significantly enhance their chances of winning the award for that particular year.

The problem was that it was almost a pointless question because I always knew what the answer would be before the words had even left my mouth. Running through my mind was ‘please don’t mention the ‘c’ word’. But without exception the chef would proudly respond with that very word: consistency.

For a judge/journalist this is the most unwanted response to a question but to a chef this is the one thing they strive for each day that they don their whites, enter the kitchen and do battle. The further they rise up the rankings in the chef world the greater the importance is placed on this word. To win a major award is one thing, but to keep it requires absolute consistency.

Whether you like it or not the top of the recognised rankings are Michelin and their coveted stars. To win one will absolutely change a restaurant’s business. To win (a maximum of) three will send a restaurant and its chef into the stratosphere. Earnings should quite rightly go through the roof.

But the money will not come from the core restaurant. The typical Michelin-starred restaurant has only a modest number of covers and although you can hike up the prices, you’ll still need to employ twice the number of employees as customers to make it run silky smooth. The money will more likely come from spin-off volume-based restaurants, TV deals, books, and food product sponsorships etcetera.

There can be a big downside to this starry scenario. Adhering to consistency can be a right pain when it acts like a straight-jacket. The fact is, holding onto stars and other such high-end awards can suck the life out of a restaurant. Consistency can stifle innovation. Being scared to play around with the food in order to retain a position on the rankings ladder is a rather unfortunate position that some top chefs must find unknowingly creeps upon them.

Heston Blumenthal won three stars at his Fat Duck restaurant and for all his antics experimenting with food on the television and at his other restaurants the menu at the mother-ship retained some of the same (in) famous dishes for years. Snail porridge was a perennial. Customers undoubtedly loved it (and expected it) and the consistency of the food ensured it kept its stars but what about the chefs creating the same meticulous dishes day-in-day-out.

Would changing the winning formula in any way prompt a bout of indigestion for the inspectors from Michelin who could then punish the chef with removal of stars? This is the worry that can prey upon a highly strung thoroughbred chef.

There is no doubt that cooking at the top level is a combination of art and science. If you strip away the arty bit – involving experimentation and innovation – then it must be a frustrating situation for chefs. Some establishments have managed to stay at the top of the game (and rankings) through constant innovation. The most famous being El Bulli, but this was only possible because for around half the year the restaurant’s doors were shut to customers and a total commitment was made to creating new dishes during this closure period. This is clearly unsustainable – both financially and mentally/physically – and El Bulli closed its doors in 2011, despite undoubtedly having the longest restaurant waiting list in the world.

Maybe it is no surprise that the two countries with the most Michelin stars are the guide’s motherland France and Japan. They both have a rich heritage of food – involving the use of fine ingredients as well as unchanging skills and techniques that are part of their national psyche. What this combines to deliver is a deliciously high level of consistency, which the likes of Michelin lap-up like a cat that has just got the béchamel sauce.

In order to keep the guide books happy while also maintaining the sanity of the chefs by keeping their creative juices flowing in the best restaurants I guess the aim should be to balance the ‘c’ word with ongoing innovation. But as I say this I recognise that if ever a sentence was uttered with ‘easier said than done’ written all over it then this is it. If you think consistency is tough then I guess you need to try also throwing in a little innovation into the water bath to make life truly interesting.
Glynn Davis is a leading commentator on retail trends

Getting to the heart of brand strategy – a ten week MSc programme in one summary presentation by Ian Dunstall

It’s daunting enough to attend a business school lecture or course. But being asked to create and deliver a Strategic Marketing and Brand Management for international MSc students at Surrey University was a fantastic challenge. More than anything, it made me stop and think about what is really important about brand strategy in the hospitality industry.

In an attempt to summarise a ten-week programme, my highlights of the course would be:

1.  A reminder of what marketing is really about – it’s to identify and meet human needs profitably. Which makes all hospitality managers, regardless of functional role, marketeers – far beyond the specialist roles of your company’s marketing department. The marketing team may identify the target consumer for the brand, but everyone has the ongoing responsibility to tune the brand needs for the benefit of the guest.

2.  Great brands position themselves in a way that is truly relevant, distinctive, differentiated and credible. A well thought through brand should be able to articulate clearly its:

• Brand essence – how the brand connects emotionally with the customer
• Brand purpose – why the brand exists for the customer
• Brand values – how the brand behaves to the customer
• Brand personality – the character that the customer sees and feels

3.  Great brands have an emotional connection and association far beyond the functional benefits of their offer. They are a continual story that is never finished. A great example is Dishoom and the success they are achieving. Their concept is based on a core idea (paying loving homage to the Irani cafes that were once part of the fabric of life in Bombay) and each new store is designed around its own individual story.

4.  Hospitality brands are unlike other consumer sectors – we sell service and experience. Our customers leave our premises with no physical product, just the memories of the experience. So we need to ensure our focus is on creating that memorable and positive experience.

5.  The real brand ambassadors are therefore our servers, chefs and hosts who manage and interact with the guest’s experience. The rest of us are back room staff and facilitators – we can influence the guest experience from afar, but we are powerless in the actual delivery of it. So we need to ensure that a large part of our marketing effort is to motivate and inspire our internal brand ambassadors.

6.  Marketing is about finding the magic that achieves brand advocacy, where guests fall in love with and want to share positive stories and recommendations about their brand experience. And the social media age is the perfect opportunity for this. There is an inevitable role of marketing communications to create initial awareness and trial of the brand, but the real focus is to ensure that the brand is developed to a status that creates strong advocacy.

7.  Many of us are now managing middle age and old age brands that are far older than their target markets. McDonald’s is in its 70s, PizzaExpress and Dominos are in their 50’s, even Nandos is approaching the 30’s. Older brands may have the benefits of site scale, established operating systems and brand awareness. But there is an inevitable life-stage cycle from birth to death, so these older brands need to be regularly focusing on rebirth or revitalisation to keep their brands alive and relevant.

8.  And the external market environment changes so swiftly. Technology product companies are so exposed to the risks and benefits of this. Think of the demise of once powerful brands like Nokia, Blackberry, Blockbusters and Kodak, or the revitalisation of Apple since 1997 – when it was a loss making company with declining market share. The bricks and mortar location advantage of the hospitality sector protects brands to some extent from such transparent and accelerated boom bust cycles, but it also can cause complacency and status quo protectionism – hospitality brands can protect short-term performance with pricing and cost control but that can distract management teams from the need for harsher re-appraisal of brand strength and long-term relevance.

9.  Its relatively common practice for mature brands to lose their direction at some point – they get distracted by opportunism or lose the focus on why they really exist for their guests. But great brands can recover by refocussing on the brand core. Remember Starbucks who in 2009 symbolically closed all their stores for the day to refocus on training their staff on what their most important priority was – great service of great tasting coffee

10.  Successful brand revitalisation typically requires three core elements. To restore brand relevance, i.e. recapturing the brands founding values and distinctiveness that the guest fell in love with. Then to reinvent the brand experience in a way that is relevant for the current and future market. And then to refocus and re-engage the organisation behind the cause and brand ambition. The brands that do this most successfully are those that had a strong founding brand positioning that they are able to successfully modernise. Look as evidence at the turnaround success of TGI Friday’s around the positive core of the emotions of that Friday feeling, and the emerging success of Pizza Hut Restaurants in the UK, with the refocus on taste freedom and American spirit.

11.  A case study that I think provides a great illustration of the thinking behind brand revitalisation is from outside our sector – Mini. When BMW purchased Mini they ended the production of a technical platform in 2000 that was initially created in 1967. They then created a totally new vehicle technically relevant to the modern market – but with the brand values, personality and identity firmly rooted in the founding brand concept. Without the luxury of closing production lines and starting afresh, how can hospitality brands take this inspiration and translate it into their own brand revitalisation

12.  Examination of the changing needs and aspirations of each consumer generation shows how fast the market is changing – and how reactive brands need to be. Current vogue is to understand and satisfy the Millennial market – but even they are ageing now into their 30’s – the next focus will be on Generation Z who are now emerging into their late teens as independent hospitality brand consumers

13.  And finally the lecture series spent a lot of time examining the brand evolution of the hotel sector. In truth branding is a relatively new and untapped science for this sector which has been predominantly about estate strategy, finance/ franchisee management and reservations/ loyalty systems to date. But increasingly hotel groups are having to apply real brand management skills to create meaningful differentiation and distinction to their offers, both against competitors and within their own portfolios

Ian Dunstall is a brand development consultant working with a range of retained and ad hoc clients across the leisure sector, including Pizza Hut Restaurants (UK). He has a background in senior marketing roles both nationally and internationally. He was previously director of concept development for Mitchells & Butler, with roles including the revitalisation of Toby Carvery and the creation of Miller & Carter.

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