Tuesday, March 27, 2012

How to Create a Permanent Business Asset

Here's a marketing lesson you'll want to devour, from a Wall Street Journal story about a popular San Fransisco deli ...


The owners of Wise Sons Jewish Delicatessen started their business with a dream: to bring traditional Jewish foods such as hand-sliced pastrami and house-smoked trout, to San Francisco.

But the economics of opening a location—costs can range between $300,000 and $500,000 for a 1,500-square-foot space with a liquor license in San Francisco—pushed the young restaurateurs to launch with a more temporary approach: the pop-up.

Pop-up restaurants [are] temporary eateries that set up shop for a few days, weeks or months in spaces such as hotel lobbies or other restaurants that close for the night.

Start up costs: About $2,000 to $2,500 a week, which covered rental space in a commissary kitchen, ingredients, and liability insurance, and was equivalent to what the partners, who worked without pay, earned during each service.

The Wise Sons pop-up soon began gathering crowds and garnering attention in the local press. In late February, just over a year since starting the pop-up, which still operates once a week, the partners opened a fixed location in the city's Mission District.

The obvious lesson? If your idea is good and you work hard, you can turn humble origins into grand success.

But there's another, more-important lesson buried in the story ...

Pop-ups also appeal to established restaurateurs such as Bill Chait, managing partner of Sprout LA, which operates six Los Angeles restaurants.

Pop-ups are an ideal way to reach a younger audience, he said. For Mr. Chait, who was already paying for the location and some of the staff salaries, input costs were minimal, and he made a margin of about 20% on each event, he said.

"The circle of people we have in this universe, it's our target market. It's social-media driven and younger," Mr. Chait said. A mailing list of more than 4,000 names accrued through the pop-ups "are big diners at our restaurants" now, Mr. Chait said.
Get that?

Chait used his temporary restaurants to build a permanent asset -- a mailing list of more than 4,000 customers. And they're coming back to dine at his permanent restaurants.

Chait is the only restaurateur in the article to mention a mailing list. My guess is Chait will be the only one in business 5 years hence -- because he's the only one building a permanent foundation.

A mailing list and/or customer database is the most valuable asset you can own. It's a rock upon which you can build a business that lasts.

You may have 1,000 followers on Twitter, but Twitter owns them -- not you.

You may have 1,000 friends on Facebook, but Facebook owns them -- not you.

If you don't have a customer database or mailing list, any success you have now is temporary. In the long run, you will get owned -- by the competition.

Bio: Kevin Donlin can help you grow your business and enjoy the breakthrough results your hard work deserves. If you're interested in boosting your revenues and profits, please click here.

1 comment:

  1. Great post Kevin!
    This simple key of collecting data and building a list is a great 1st step.
    I'm amazed at how many companies are not doing this.
    Thanks for sharing :-)