G'day Reader

Another week goes by with more businesses going bust & people burning out

It's a metaphorical 'bombing' of the industry, allowed by our governments, as the big corporations price gouge citizens' reducing their:

• discretionary spend - the bit that we rely on
• desire to go out and have fun - in fear of spending
• demand for services - diminishing as budgets tighten

It's no wonder we're facing:

• record levels of businesses going bust
• record levels of human burnout

It can be:

• overwhelming
• exhausting
• stressful

trying to 'fill a sink' from a tap that's turned on full with the flow slowing down.

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Einstein Was A Smart Guy

It was Einstein who said,

You can't build a business by constantly putting prices up on the same items you're selling in a market where customers have less money.

Your customers have less money in their pockets.

You want more of their diminishing budget for the same thing.

At best, you'll see the same customer faces less often.

They're your loyal customers, despite you possibly thinking otherwise.

They must love your place to keep coming when they have less to spend.

At worst, you'll stop seeing some customer faces completely.

For many of these, you won't even notice you're not seeing them.

For the ones you do notice, you might tell yourself they're staying home.

They haven't got any money so they're just not going out.

Most of these customers, who have stopped visiting you, have:

• found other places to spend their money
• had enough paying more for the same, or often for less
• having tried other places, have found better value for money

This change in behaviour was researched well by the supermarkets (who spend money on this type of research and we don't)

By late 2022, a few months into the high inflation period we are still in, many supermarket customers had switched to the discounters.

Did they not like their previous supermarket anymore?

It didn't matter. They got tired of paying more for the same, or often less (suppliers reduced quantities per package AND put prices up)

The same has happened with many customers in hospitality.

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Square pegs in square holes

The external environment has changed. Significantly.

Imagine the square peg fitting nicely into the square hole.

Your hospitality business felt like that previously. It just 'worked'.

Well, the hole has got wet and the wood has swollen up.

The peg doesn't fit in at the moment.

You can wait for the hole to dry so the peg fits again.

Or you can shave a bit off the sides of the peg, so the peg fits the hole

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Change the shape of the peg to fit the hole

That's what 're-positioning' a product or business offer is all about.

Changing the shape of the 'peg' to better fit the hole.

From a business process perspective, it's a strategic marketing action.

Right now, continuing to put prices up to sell the same thing is like hitting that peg (that no longer fits the hole) harder with a bigger hammer.

Something is going to break.

What's likely to break is:

• the business
• the human spirit
• both at the same time

If you could avoid either or both of those outcomes, would you?

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Reposition your venue/company

Is this something you feel you need to consider doing?

If it is then you'll need to:

• analyse your potential market (it's changed in the last 2 years)
• analyse what you currently offer (what's working, what isn't)
• consider a few different possibilities
• safely test out some of the changes
• choose the changed offer you want to run with
• promote the changed offer to (the possibly new) target market

You can achieve a 'strategic change' like this within 3 months.

Don't guess and 'shoot from the hip'. It's less likely to work.

Be methodical, but be committed to the change process.

Whether you're a:

• business owner
• multi-site leader
• venue general manager
• head chef 'driving' a menu
• or other profit-accountable leader

going through this process will provide you with:

• options to reach lapsed and new customers
• strategies to make existing customers less likely to leave
• a better sense of what makes your business, venue/menu work

It's a powerful process.

When I worked in big UK groups in the 90s as a director of marketing, this is one of the processes we'd do within an estate of 1800 pubs and restaurants

It's the process I used when I was headhunted from London to Melbourne, as CEO of a start-up group for an ASX100 corporation in 2000.

It's the exact same process I used when I built my own group for 12 years becoming a multi-millionaire within 5 years.

I highly recommend you consider whether this is something that might help you reduce the risk of the business you own or work for, going bust.

And, it's a process that gives you purpose, meaning and direction, giving you something to aim for, rather than feel like you're waiting for the ship to sink.

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If you don't survive you can't thrive!

There aren't enough customers spending enough money to keep everybody's business alive right now.

But, there are enough of the right customers, with the right amount of spend, to keep your business alive so it and you can thrive IF you position your business to attract them. That requires re-positioning your existing offer.

If you've seen fewer customers visiting and a diminishing average spend, you might benefit from repositioning your business/offer.

This process won't only improve your cashflow now, it will develop a strategic skill in you that you can use repeatedly to succeed and thrive in the future.

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Hope you have a great weekend.

Let's create a thriving Future of Hospitality, together.

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David

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David Carruthers
Founder, Future of Hospitality​

PS. If you want to learn how to reposition your business or 'customer offer' reply to this email with "REPOSITION" and I'll send you some info.

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