New Concept

Our Upper Westside neighborhood is filled with great businesses and constantly changing. There’s always a new business opening nearby and whether it’s a new restaurant, spa or store it keeps the neighborhood interesting. Unfortunately, with new businesses opening every month, there are usually businesses closing. I decided to write this after noticing one of my favorite restaurants has disappeared from the neighborhood and I believe it’s due to a lack of a strategy to grow the business.

I walk my dog, Bo, a different route every day and we recently walked by a new business under construction on one of the side streets. On our way back a man outside bent down to greet Strategy to GrowBo and we chatted for a few minutes. (walking a dog, people correctly assume you live in the neighborhood) He was the chef for this new business and his partner, working inside, was going to run the front of the house. They were “bootstrapping”, having invested their own money an doing the construction work to renovate the restaurant themselves.

Their “4Fusion” cuisine concept was interesting. The dishes fused together cuisines from different cultures like Indian/Thai or Greek/Italian. The “4” was an option of 4 base ingredients of either beef, chicken, fish or vegetarian as the base for the dish. New York is a great place to test a concept and this sounded unique but it was also confusing.

No Strategy

I have extensive experience working with startups and for 8 years managed sales and customer success for Citysearch. If you are not familiar with Citysearch, at one time it was the #1 review site for SMB’s and restaurants were a primary category.

citysearch-logoIn this role, I met and worked with thousands of small business owners across the country. So, I was naturally curious about their plan to promote the business and strategy to grow.

There was no plan. All the investment in money and sweat had gone into the opening and bringing this vision to life. They felt that being half a block off Broadway they would get enough foot traffic to create interest in their very unique concept. They had not put any thought into promoting the business other than creating a Facebook page that had no following or content to attract one. After wishing him luck and promising to come to the restaurant when it opened, Bo and I headed back home.

I did eat at this restaurant but I didn’t think it would create the buzz they were anticipating. Knowing the passion, money, and effort they had put in, it was heartbreaking to watch this business slowly fail and then finally close.

Risky Business

Working with so many new business owners, I feel like I can foretell if the business will be open in the next 2-3 years. There was a statistic our marketing team shared with me in 2005, that 70% of restaurants fail in the first 1-3 years of opening! It sometimes feels like this is true in NYC.  Reading restaurantowner.com I found some research conducted by Cornell and Michigan State University. They concluded that after the first year 27% of restaurant startups failed; after three Strategy to Growyears, 50% of those restaurants were no longer in business; and after five years 60% had gone south. At the end of 10 years, 70% of the restaurants that had opened for business a decade before had failed.

These are frightening numbers proving that the restaurant business is not easy and the entrepreneurs that open restaurants have ambitious courage.

I noticed a common thread in the restaurant owners that succeed and thrive. They open businesses to serve a particular audience or have a customer base in mind that they are targeting. Knowing more about their customers with every visit, order, and transaction. Using data to enhance the customer experience to bring them back more, spend more with each visit, referral friends and write positive reviews.

This is where I think the 4Fusion owners failed before they opened. The owner was a chef with an idea he really believed in but it wasn’t a concept that was understood or desired. His focus was the concept, not the customers.

Successful businesses engage their customers online and offline to continuously improve their experience with their business. They pull data from every source available and integrate tools that use machine learning to start to really understand their customers and build relationships that foster loyalty increasing both visits and spend.

Grow or Close

In that same UWS neighborhood, I often wonder why some restaurants open and fail and others stay for years. Last summer, Ikanari Steak opened (and closed) a location on Broadway by the 79th Street subway station. This is a popular steak house in Japan and they are expanding into the US market (think quick-serve steak house) I met with the owner, he only spoke Japanese and we communicated through an interpreter. Their belief in the concept was so strong they felt it will take off anywhere they opened one.  After spending a small fortune on this location it closed within months of opening.Strategy to Grow

Shortly after, I was invited to the opening event of a location near Grand Central Station. The owner told me he thought the location would do well with the business lunch crowd. This made sense, he targeted the area for the audience it would attract. They used

incentives to collect cell numbers. Leveraging POS data they created personalized messaging and sent it timed to bring customers in a few times more each week. This was a winning strategy to grow continuing the conversation with customers outside of the dining room.  

Blocks away from the failed UWS Ikanari location is Fred’s, named after the owner’s black lab Fred. This restaurant has been in the neighborhood since 1997 and always busy. This is a perfect example of a restaurant built and centered around its customers. Fred’s portrait hangs in the bar area along with a couple thousand framed photographs of neighborhood dogs. My dog Bo has a coveted space in on the wall. They engage their customers, learn about them, communicate with them and 20+ years later, continue to attract new customers. They know their customers and make them feel appreciated. There is a customer-centric, data-driven strategy behind Fred’s and the success is undeniable. A targeted email from Fred’s easily changes our weekend brunch, lunch or dinner plans.

After 15 years of meeting with restaurant owners, the ones that focus on data and have a customer-focused strategy to grow by leveraging that data, seem to beat the statistics.

Bo
“Bo”

 

 

 

 

 

 

 

 

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