Diversity : The key to longevity

During my time in this industry I have worked and been part of many business models within our trade,  from pubs to nightclubs, cafes to restaurants and hostels to hotels.  The late nineties and early noughties were a time of target markets, demographics, social status and an array of other buzz words to describe the direction in which a licensed premises had undertaken.  But in this climate, can we still afford the luxury of desire over necessity?

Over the coming months I aim to address the issue of diversity and how ultimately it is the key to sustaining and indeed developing our business.  This month, I will be focusing on the positive effects of diversity on the nightclub industry in Ireland.

Historically, the Irish nightclub market could be categorised into four areas:

Over 18’s:    Appealing to the young working professionals

Over 23’s     Appealing to the now virtually extinct Yuppy crowd

Over 30’s     Appealing to what would commonly be referred to as “The Golden Oldies” crowd (a phrase that bothers me more now than it did 10 years ago, for the life of me I cannot think why!).

Students:    Aged 18 to 21/22 years old, with a tight budget and big expectations

Nightclubs of the late 90’s and early 00’s opened under the ambition of targeting their chosen demographic.  With blinkered eyes these venues pursued “our crowd” with grit and determination.  Deviation from “our crowd” would be avoided at all costs so as not to pollute or contaminate the product on offer.  Don’t get me wrong, focus and singularity of mind are paramount to success, but is it not time to remove the blinkers and look at the bigger picture?  I would challenge you to identify a venue that has survived the last three years whilst only appealing to a single market demographic.  Indeed each of the four markets mentioned has been decimated by the lack of disposable income available due to high levels of unemployment nationwide.

Diversification is the key.  Your target market will not increase in size, as more people arrive to the 18 – 22 category a similar if not equal number of people graduate from it to the over 23’s market.  This of course, is a cycle that happens right through to the point where those in the over 30’s market decide that your music is too loud, the staff are too young and the lights give you a headache....  A single market is finite, diversity is the key to success.  Here are 4 steps to securing your new revenue stream.

Step 1

Analyse your current trading hours:  this needs to be done so you can accurately assess what nights are currently under performing with your current demographic.  If you are only open Friday and Saturday and these numbers are reasonably solid and with little room for improvement, then investigate the feasability of introducing a new trading night.  Be sure of your breakeven point for operating a new standalone night, this will help you decide what market is best to target and indeed whether it exists in enough depth to support your business. 

Step 2

Before you open, assess what your competitors are doing, how they are doing it, on what nights and aimed at what target market.  This research will facilitate your finding a gap in the market for you to attack, should a gap exist.  There are two schools of thought on how to deal with the results in this research: 

If there is no one catering for Market X on Night Y, is this because the market is not there OR

If someone is catering for Market X on Night Y and is at capacity, is this market closed to other venues

The only way to determine this is through local knowledge.  Visit your competitors or employ someone experienced to do this research for you and from this feedback decide whether the market is closed or ready to be attacked.  If there are 800 people out and available in the market you wish to attack on the night in question, what percentage of them will you require to breakeven.  This equation and the results will vary case by case.  Do not rush any decisions, the last thing any venue needs is a loss generating night to be introduced.

Step 3

Leave your immediate area.  Operators in neighbouring towns, cities and counties may provide you with ideas for events, entertainment and offerings that are 100% new to your market.  Several of the countries leading nightclub operators have taken to visiting London, New York, Las Vegas etc. from which they extract information for potential new trends so as they are ready for what people will want in 2 years time, providing them with longevity.  But for now, start with the city next to you.

Step 4

You have decided what night you would like to introduce.  You have chosen your target market for this particular night.  You have firmly established the breakeven point and are confident that it can be achieved.  The next step is to make sure that your proposed night will not affect your regular clientele.   Your analysis will need to include:

•    Will my regular clientele and proposed clientele mix on the night in question

•    Will my regular clientele encounter my proposed clientele in passing en route to other venues on the night.  i.e. “I walked past Marks nightclub last night, it was full of XXX”

•    Will the marketing plan I propose to use to promote the new night be visible to my existing clientele and will it cause them concern over their next visit.

•    Am I devaluing my business model in the eyes of my core clientele

Conclusion

You have now addressed the potential hazards of introducing a new market.  You have a comprehensive marketing plan and the resources and staff to start this night and grow it over the coming months.

 
Take encouragement that some of the most successful venues in this country currently target multiple markets.  I have previously worked with a venue that operated two student nights in the early part of the week, one live music night, two regular weekend nights and a gay night.  The success achieved was due to diverse and broadened market base.  I worked with a venue that operated a 70’s & 80’s night on Tuesday, dance music night on Wednesday, live music night on Thursday, commercial music Friday and Saturday and live music again on Sunday.  The success achieved was due to a diverse entertainment programme appealing to a wider target market.

Diversity, the key to long term success.