Inclusive or exclusive? We operate our boutique hotel and restaurant in a competitive region and we’re always looking for things to set us apart. I was reading the story recently about Kettner’s Townhouse Restaurant being closed to all but their members and guests. I am interested to hear your thoughts about being inclusive or exclusive and whether exclusivity policies could be a point of difference for my business?
A: Talk about a big question for a short article, but it is certainly an interesting one. The issue of exclusivity and inclusivity is a complex one, not least because for every guest who loves the kudos of exclusive benefits, there is another who will consider it snobby. Traditionally, true exclusivity has been the domain of the rich and famous, and there’d need to be a monetary incentive for you to even consider it; either through higher prices and increased revenues or through membership fees to cover any anticipated costs. Either way, it is usually associated with upmarket establishments, and the ones who have a reputation that carries weight; the histories are littered with exclusive members clubs that didn’t work out.
If you think you have, or can build, the reputation required to carry an exclusive price tag, and feel that there is an appropriate local market in your area, the next thing to consider is investable losses. It is rare that a members club will be profitable in the short-term, so you really are considering the long-game if this is your choice. Exclusivity is all about uniqueness and prestige, and you’ll need to be offering something special to convince others of your value. Kettner’s was ‘lucky’ in that they had enough local footfall and reputation to build a membership base without exclusivity before introducing the exclusivity, but frequently membership and exclusivity go hand in hand. That means you’re likely to see a drop in revenues in the short-term to gain a boost or loyal member base in the long-term. Can you afford to take the risk?
Assuming that you like the idea of being an exclusive guest-member establishment, the next thing to consider is your current and coveted guest profile. If your restaurant revenue is almost exclusively guest diners, then adding exclusivity and a membership for locals could be a really good revenue boost. If however you have succeeded in attracting a good, local demographic, then you need to consider whether they are the likely clientele to opt for a membership, and if they are, what you would need to be in place to attract their spending with you. Location, scope, benefits, ambience, all will need to be considered in terms of your culture and values to align your business (or not) with your prospective membership.
Supposing that you do opt for a membership, what then? Well it’s all about value, networking and an evolving approach. First, start with a focus group of potential members and ask them what they would consider to be valuable and then what they would consider to be a fair price for that value. I’ve worked with a hotel recently who has exceptional spa and gym facilities open exclusively to guests and members; they’ve opted for limited users per session i.e. no more than 30 people in the spa at any one time, regular free guest passes, two free treatments per month and a quarterly member exclusive and they are selling like hotcakes. The value here comes from the facilities though and you are talking about creating value for a restaurant and bar, when there’s plenty of choice around you. So how then are you going to attract and retain your membership?
Next, you need to network. This is all about connections and you need to utilise and leverage your existing connections and work to build new ones. Consider who in your region is an ‘influencer’ not in the sense of being social media famous, but in the sense of being connected to those you need to be connected to, and send them an inclusive invite to join your membership for free. Connections bring connections, and adding an ambassador programme could really help leverage your contacts. I was an ambassador for a hotel near me, and was given 50% off food and drinks every time I bought colleagues to the hotel. It was discreet, I was well looked after and the GM came to see me every time I was in. I introduced loads of business, and it wasn’t even an exclusive membership either.
Finally, you need to adapt and evolve. Unless you are operating in an old-school business district with the entrepreneurs of old, then no one really wants exclusive to be synonymous with ‘stuffy’. Instead, they want to know that they can get a quality and consistent experience, but at the same time are enjoying the very best and newest of experiences. Evolving menus, expanding benefits and a consistent level of service are a must.