Subjects: Dictatorial approach not helping Sam Smith’s, creating a F&B proposition relevant and meaningful to Generation Z, CRM – the answer to survival is right under your nose
Authors: Glynn Davies, Ann Elliott, Victoria Searl
Dictatorial approach not helping Sam Smith’s by Glynn Davies
On arrival at the bar in the Princess Louise pub on London’s High Holborn, I was informed it was cash only. This struck me as pretty odd when most hospitality businesses seem to be going in the complete opposite direction and becoming cash-free. It was even odder when the barman would not take my old paper £20 note, suggesting the pub was now only accepting the polymer versions – even though they were legal tender for another couple of weeks. It seemed it was cash-only, but only certain cash!
I’ve long been a fan of Sam Smith’s pubs in the capital because it has some real gems and has, over recent years, committed serious amounts of investment to return some of its properties to their original Victorian splendour. These include the Princess Louise, Duke of Argyll, Fitzroy Tavern and The Windsor Castle. Each of these beautiful pubs have had their multiple rooms which face onto central bars reinstated, and they sparkle with their cut glass windows, chandeliers and shiny decorative tiles.
I’ve long recommended these pubs, along with other gems like Ye Olde Cheshire Cheese and Cittie of York, to visitors to the capital, but I might have reached the end of the road following my £20 incident. It follows on from my shock at finding the bottled beers – I’m particularly a fan of Sam Smith’s Nut Brown Ale – had been reduced in size during covid-19 from 550ml to 330ml, but the price remained the same, which was already quite punchy. And this comes on the back of a reduction in beer choice in certain Sam Smith’s pubs (what happened to the India Ale on draught?), and I’m still reeling from the change the company made some years ago to the recipe of its wheat beer.
These are arguably minor quibbles from a single customer, but it might be the thin end of the wedge because elsewhere, there are more serious problems for the company. It has arguably been able to get away with its eccentric ways of operating for many years, but the current climate of chronic staff shortages and cost-of-living crisis is making it increasingly difficult for it to continue having everything its own way. The rules involving no mobile phones, music and televisions as well as a ban on customers swearing and no admittance to children – combined with modest salary levels – is making it ever harder for the business to attract management to its pubs.
Sam Smith’s had been rationalising its estate as a result of the pandemic, with around 25% of its properties being boarded up, but adding to its woes is the inability to find managers for many viable pubs. They now sit closed with ‘staff wanted’ signs pinned up in the windows. The Sir Gawain & The Green Knight in North Wales is one such pub that has been seeking management for some time, with locals suggesting the issue deterring applicants is the odd rules Sam Smith’s imposes.
In the company’s home town of Tadcaster, five of its seven pubs are closed, awaiting new management. It is a similar story in other towns and even in major cities and busy areas, with enforced closures in York, Whitby, and Scarborough as well as London, where I’ve been informed the Red Lion, near Carnaby Street, has suffered from these management shortages.
This sad situation highlights just how tough it is to find people right now, and how businesses maybe need to make life easier for themselves by taking a less dictatorial approach with their personnel – and in Sam Smith’s case, their customers too. In these times of great choice for employees and customers, there is significantly more attraction to those businesses that empower their teams rather than operating a command-and-rule type operation.
Should times get even tougher for Sam Smith’s, it could always sell off some of its prized London properties. We might be in a period of great economic uncertainty, but I’d bet you £20 (polymer, of course) that the company would have a queue of takers around the block for its crown jewels if they ever came to market.
Glynn Davis is a leading commentator on retail trends
Creating a F&B proposition relevant and meaningful to Generation Z by Ann Elliott
This week, I was contacted by a large international business wanting to rejuvenate their workplace food and beverage offer. With a team of largely under 30-year-olds, they believe their current offer lacks relevance, inspiration and meaning for this age group – a mix of Millennials and Generation Z. They want their food and beverage proposition to become a positive reason for their team to come back into the office.
This then, is a very open and fascinating brief – simply create team happiness through their food and beverage in its broadest possible sense. It means really understanding their customer journey and their use of food and beverage from the moment they leave home to the moment they return. It means looking at new, exciting concepts and developing new ones, considering delivery and click and collect, potentially developing food kits to cook at home and thinking how people eat at their desks, in communal spaces and in meetings. Not just for now, but for years ahead.
Of course, it is far too simplistic to think just in terms of Millennials and Generation Z. Anyone who has children knows how different they can be even when born close together. The key is to find common themes for their food and beverage while developing offers which allow personalisation. Alice Thomson in The Times this week pointed out one of these key themes – the difference between the Generation Z/Millennial generations and Generation X and Baby Boomers – which is worth taking note of when thinking about their food and beverage development.
She commented that the mini-Budget was an epic tale of “brutal inter-generational unfairness”, which will leave the young with a burden of debt they will be paying off for decades, while focusing tax cuts almost entirely on the old and rich. Young graduates, she said, will now be the top taxpayers in the country. A graduate who earns £50,000 a year will pay a 51% marginal rate, a higher rate than the 42% paid by top-earning bankers with bonuses. The cost of renting a flat in London averages £1,898 a month, which is probably one of the reasons why 28% of 21 to 35-year-olds still live at home. Not surprisingly, perhaps only 9% of 18 to 24-year-olds will vote Conservative.
She quoted Gallup’s global workplace report for 2022, which showed that only 9% of young British workers were engaged in or enthusiastic about their jobs, ranking the UK 33rd out of 38 European countries. “Their long-term concerns are increasingly treated as irrelevant by an older generation that myopically focuses on the crises they have created,”
it said.
IFIC’s 17th annual 2022 Food and Health Survey commented that Generation Z seek foods which give them more energy, improved sleep, emotional or mental health benefits and digestive health. Mindful eating is one way in which they manage stress. They are also more likely to follow a diet or eating pattern, calorie count, snack, avoid sugar, eat cleanly and/or eat a plant-based diet, and be more committed to environmental sustainability than older generations. In terms of information on their food and beverage, Generation Z has the highest level of trust towards family members, friends and ordinary people they perceive as doing good.
As they say: “From their perceptions on health to their most trusted sources of health information, it’s clear that Generation Z stands out – not only in their behaviours and decisions, but also in the factors that influence them.” All these facts, and many others, need to be considered as part of a deeper understanding of how this age group will use their food and beverage in the future.
Their flats are now being built with minimal kitchen space. Lobby areas now include cold rooms for Ocado drop offs, spaces for Deliveroo deliveries, shelves for Amazon deliveries and laundry areas for dry cleaning returns. This is a generation that won’t cook but will want food when they want, where they want and how they want – using technology to help them do so. I am looking forward to developing a workplace for their food and beverage proposition which is relevant, meaningful and inspiring for this generation.
Ann Elliott is a hospitality consultant
CRM – the answer to survival is right under your nose by Victoria Searl
I was too busy propping the bar up in the name of operational excellence to have watched Friends during its nineties and noughties heyday, but even I’m aware of the emotional rollercoaster underpinning each character’s quest to find the perfect partner. And nearly 20 years after its finale, I don’t think I’m spoiling anything by remembering that the answer was right under the nose of at least 60% of the gang – Monica fell for Chandler and Rachel fell for Ross.
And this got me thinking about how we approach marketing in our industry. Turning to a never-ending stream of shiny new technologies in the hope of discovering an unlimited supply of silver bullets, when the answer to truly effective marketing with a provable return in investment has been right our noses all along – our customer database.
At this point, there’s a good chance you’re settling in for a pleasant read, safe in the knowledge that you’ve done the work – you’ve got yourself a gleaming customer relationship management (CRM) and have been chucking names and email addresses into it with happy abandon for months or even years. It’s only a matter of time before that bad boy starts making you an absolute ton of money, right? Wrong.
Your CRM is not a 3D printer, churning out hungry and thirsty people clutching fistfuls of £20 notes whenever you need them. Your CRM is an incredible machine, (especially if you’ve signed up with Airship!) but like all machines, its output depends entirely on what you put in.
Fuel
If fuel powers an actual machine, it’s data which powers your CRM – specifically proof of presence data. We want data which proves someone was in your building or has bought something on your website. Social and other ‘vanity’ data might give everyone at HQ a warm fuzzy glow, but it's not going to help you here. So, what makes good data other than proving presence?
We live in the era of personalisation, so anything that can help us tailor our messaging is worth capturing and holding onto. You’ll need a good spread of demo and geographic (name, age, gender, location), behavioural (recency, frequency, visit times, product preferences, spending habits) and psychographic (the data which captures the ‘why’ behind the behaviour such as identity, mindset, environmental consciousness etc) – and for as many people as possible.
Materials
If a machine needs materials to work with, your CRM needs content. And we’re not talking the content you feel very pleased with, which beautifully articulates how great your brand is and why someone should choose you. We’re looking for the kind of content which takes your overarching messaging and transforms it into something more relevant for the recipient.
So, let’s say your overarching messaging is around your new menu. We want content which not only enables us to deliver the parts of the new menu messaging most relevant to the reader (for example, highlighting the vegan dishes to those who have bought vegan products before), but really drills down to the reason behind that behaviour (care around the environment, animal welfare or even health or allergies).
Objectives
As a regular viewer of BBC’s Inside the Factory, I can attest to each machine knowing exactly what it’s there to make, and your CRM is no different. Sending an untargeted, impersonalised email out with the hope that it will ‘drive some significant sales’ is a bit like studying for 20 minutes and expecting a first – it happens to the gifted, but even then, not very often.
You need to know how your database is made up (in terms of your key groups and their value) for you to know the action you are trying to drive. Has 30% of your base lapsed? That’s going to lead to a different approach and expectation of result to an email you send out to the group who were in for lunch yesterday. Segmenting your base and being realistic about the actions you hope to drive enables you to build a strategy and see the results of your efforts far more clearly.
Operator(s)
In every episode of Inside the Factory, we see that even the smartest of machines have a manual operator who maintains the quality and consistency of output, feeds in the appropriate materials or fuel and quickly makes tweaks when production starts to go a bit awry. Your CRM is no different. Effective email marketing is almost a full-time job when done right, but the return should speak for itself.
So, as the impact of recession looms ever closer, the key to survival (and even prosperity) for most hospitality businesses will be found in your database. It’s time to shore up your relationship with your key groups and give them compelling reasons to stay right by your side as they become increasingly careful about where they spend their cash. Whether in matters of love or liquidity, the answer is often to be found right under your nose.
Victoria Searl is founder of DataHawks, which provides marketing intelligence and services to the hospitality sector
