Achieving Bottom-Line Goals With PromotionsMay 7, 2013 By: Alissa Ponchione
There are no guarantees when it comes to planning profitable promotions, explains Vinny Di Nino, director of sales and marketing for RMD Group, which owns three nightlife venues in San Diego. “We treat each promotion like its own separate entity, looking at it from a financial standpoint,” he says.
The first step in making sure a promotion will achieve a venue’s bottom-line goals starts with creating a profit-and-loss statement, Di Nino says, focusing on what the promotions cost in addition to what the venue has to pay for it. “We work backwards and see what kind of revenue we have to generate to make a promotion profitable,” he adds. That way, if the promotion isn’t working out in those early stages, they can change course.
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However, if the planning stage isn’t fully developed, then the promotion won’t take off. “Whenever something fails, it’s always been about poor execution,” Di Nino says. “It was our staff and team who didn’t know what they need to do,” or it was poorly promoted.
Partnerships can be crucial to the success of a promotion. An industry veteran for 16 year, Mel G, owner of Florida-based MelG Group Hospitality, says the first thing to do is involve the liquor companies in promotions. “This could be promo girls with buy-back options or strictly on case sales or both combined,” he says.
To get a good partner, Mel G says the concept of the promotion and the audience it’s geared toward can help identify sponsors. If it’s a high-end promotion that’s targeting a wealthier demographic, then luxury companies like Mercedes or Lexus might be interested in helping out.
Although the RMD Group will host promotions that they put on themselves, they also partner with a promoter or sponsor to help alleviate costs. Partnering with different promoters or sponsors brings “in a different network or group of people,” Di Nino says. “You can spread the demographic around.” The RMD Group does a lot of performance-based promotions, where door money can go straight to the bottom line, helping offset some of the costs.
Di Nino and his partners crowd source social media before an event to survey the reaction from the demographic. By giving their fans the options about certain DJs they want to see, RMD Group is able to gain feedback in real time from their network, he says. They also keep a close eye on what their competitors are doing in larger markets like Los Angeles and Las Vegas and “adapt to that,” he adds.
Additionally, on off nights “doing a recurring promotion can be valuable,” Di Nino says. “It builds momentum and a reputation as the spot to be (on that specific night). “That definitely has value. It will pay for itself over and over again if you invest in it early on,” he says.
“If you repeat the promo every day or special days, you’ll realize that your sales will be growing according,” agreed Mel G.
For special one-off events, Di Nino suggests rebooking someone that proved popular. That’s as close to a guarantee as a club owner can get. Capturing data from text, email and social media marketing can help determine if people are interested and willing to spend money on a promotion. Building a database and data harvesting “makes it so much easier to push promotions to an existing database.”
Because there are so many promotions out there, “there are no limits on promotions,” he says. “You can do anything you want: Happy hour from 3 a.m. to 4 a.m., as well as at 5 p.m. to 8 p.m., too,” depending on state regulations.
But, no matter the planning and strategizing before putting a promotion in place, Di Nino believes an owner can never know how a promotion will turn out. “I would say there isn’t any guarantee” until you try it.