Marketing tips: The rules of attraction

03-Apr-2012 - Last updated on 12-Mar-2017 at 02:24 GMT

Related tags New customers Good Customer Managing director

I watched Billy Elliot last week — I know I’m a bit behind, but I always wait until the DVD is £4 in the supermarket. When I watched it I realised how much life has changed in a generation.

In the film, children shared bedrooms, music was played via a record player, toilets were outside and houses were draughty and cold.

Everyone shared one living room as there were no laptops or TVs in bedrooms, so there were plenty of reasons to go to the pub.

Now homes have double-glazing, central heating, televisions and computers all over, as well as ready meals and cheap alcohol. As the home has improved, publicans have had to raise their game.

Another much-changed area is marketing — it is everywhere. Everyone is competing to attract the same customers to their space. So how much should pubs spend on attracting customers and what is their custom worth?

Before doing any marketing, the offer has to be good enough to attract new customers and turn them into regulars, as well as keeping existing customers happy.

Value of dining customers

Guests who visit for Sunday lunch every week are worth more than the average, and those who only come in on their birthday are worth less, but averages are a good place to start.

The average customer comes to eat once a month. Half have one course, half have two courses and the average group size is three. So with a main at £8 and a second course at £4, they spend £30 each month, or £360 a year. If you make 50% margin on that customer (including product and labour), then you make £180 profit on every new customer in one year. Over their lifetime they are worth 10 times that (a complex bit of maths, which I won’t bore you with), and therefore a new food customer is worth £1,800.

So, what would you pay to attract them? I would pay at least £90 or six months’ profit. In a similar way to banks, which will spend a fortune on attracting young customers who will stay with them for years, it is worth investing in new customers for pubs. Proving the rule, I am still with the same bank I started with many years ago.

And for a drinker? Assuming the drinker comes in twice a week and drinks one and a half drinks at £3, that is £9 a week (£7.50 less VAT), which magically comes to the same £30 a month. Therefore, a drinker is worth just as much as a food customer, but there are fewer of them around.

How to attract them

So a new customer is worth £180 in the first year, whether they are a drinker or a diner, and a £90 investment would still see a £90 return. But how much time do we spend? In my opinion, not enough.

I meet some publicans with more than 1,000 people on their customer database who advertise events on toilet doors and at eye-level in the pub, send monthly emails out and have great A-boards outside attracting people in. But I also meet publicans who do none of that.

Like everyone, I am good at some things and not good at others, but being the boss has advantages. These marketing tools are so important to pubs and if you don’t have time, delegate the tasks because they should all be done.

Of course, they will have to be paid for, but the value is immense. The biggest failure is not to do anything at all and to keep thinking that you might do it one day.

It is time to recruit new customers — they are worth it.