Don’t Disrespect Your Core Demographic:

By: Chuck Kelley
Member of Laguna Strategic Advisors

What is the biggest mistake you ever made? Mine was missing a business opportunity for the wrong reasons. I was distracted by assumptions and ignored the signals.

Early in my career we had converted a restaurant and lounge into an action lounge (disco) with a small gourmet restaurant. I was the restaurant and lounge manager. From memory, the lounge could accommodate 350 comfortably, had two dance floors with one elevated backgammon/gaming areas and a state-of-the-art DJ booth. The restaurant was glassed in and overlooked the elevated dance floor.

The concept caught on instantly and revenues far exceeded expectations. On Friday and Saturday nights we were taking in two to three times previous highs. We had lines 100 deep waiting to get in the lounge – more demand than we could handle and still keep the fire marshal happy. The restaurant was doing well and the customers loved watching the action on the dance floor while they dined. We were the hottest club in the area.

However, senior management was concerned. The club customers weren’t compatible with our hotel guests – they were locals and didn’t appear to mix well with the overnight guests. We had also had a few incidents that served to reinforce this incongruity.

After a little push back we agreed to try and change the mix of customers in the lounge. We put in a cover charge for the locals and changed the music (less disco). We were successful in eliminating the ‘undesirables’ in no time – the locals quit coming and moved on to another club. Key takeaway: don’t ‘diss’ your core demographic or they’ll ‘diss’ you but hightailing it elsewhere.

The problem was that we went from having to control the door to insure we didn’t exceed capacity to being virtually empty on prime Friday and Saturday nights. We had invested in an action lounge and then made the prime prospects for our expensive venue feel unwanted. There really wasn’t another customer source to fill up our brand new club.

The bartenders and cocktail waitresses had warned us that this would happen and we didn’t listen. Even some of our regular hotel guests asked us why we changed. Despite the objections, you see, they liked the action and hung out just to watch.

We missed a management opportunity. In hindsight, the correct approach was to find a way to work through the incompatibility issue and maintain the revenue stream.

Many years later we were operating a hotel in a prime Spring Break location. We had a few incidents and our owners starting saying that they didn’t think the spring break crowd was right for our hotel. That sounded familiar – don’t make the same mistake twice. We pleaded to hold on this is a ‘management opportunity’. If we didn’t get the Spring Break business during this time of year we would have nothing.

We had to work out a solution to manage the business in everyone’s best interest. In consultation with the hotel management team we developed a plan that included:

Prior to check-in, all Spring Break groups went through an orientation on the do’s and don’ts – we communicated the rules of engagement.

Everyone was advised that we had a two strike rule – one warning and eviction on the second incident.

Everyone signed a pledge confirming that they understood the rules and the consequences.

We set aside quiet areas for the regular hotel guests that were off limits to the Spring Break groups.

We added additional security personnel who also went through the same orientation as the Spring Break groups – everyone knew the rules.

We made sure that there was a senior hotel management presence at the hotel on a 24-hour basis. The Manager on Duty had the decision-making authority – they were the only ones who could issue an eviction decision.

Occasionally we had to make an example of someone who just didn’t get it, but on the whole the groups played by the rules and still had lots of fun. The quiet areas got very little use – our regular guests actually enjoyed being where the action was and watching the fun as long as it didn’t get too crazy.

In the end, everyone was happy. The students had fun and enjoyed a memorable Spring Break. The parents and chaperones were thrilled because we helped make their jobs easy. Our regular guests enjoyed their stay. Above all, we made good money and our owners said thank you.

Will you recognize a management opportunity like this when you see one? To me, a management opportunity is when the right answer is not a simple yes or no. It is when there is a lot of gray between the black and white. It’s when you need to see the possibilities and get a little creative.

Be sure to listen to all the signals and remember your employees – those closest to the action may have the best read. Don’t be distracted by all the peripheral noise coming up, down and sideways. Have all your facts in hand and be prepared to take a stand or at least put the boss on notice as to the potential consequences. Good business isn’t always pretty and sometimes it is our responsibility to tidy it up so we can live with it and continue to enjoy the benefits.

As Published