I like to think of myself as a a foodie in training. The "in training" tag will ways stick with me because I'm just not as adventurous as others. There are certain things I'm not willing to try just to see what kind of taste journey they might provide. I know I'd learn something if I opened my mind and allowed it to go to different ways, bend in different shapes and view the same things in utterly new and clever ways.
Which brings me to Grant Achatz (rhymes with rackets), currently at the helm of Alinea which was just named the 7th best restaurant in the world and the best restaurant in America (here). Every real foodie (unlike moi) was already atwitter on Twitter -- couldn't resist that play on words -- about the news. Then, our friend Chef Achatz decides to do the following: leverage the already positive buzz and increase its hang time by announcing a whole new concept (on Twitter) called Next Restaurant. The basic premise is that the menus change by season and will either be inspired by a certain location in the past or some location in the future. You can read more in the FAQ page. It's interesting.
The reason why I'm talking about Chef Achatz is more than just because he's a food rock star. What I want to talk to you about is that for this new concept, they are selling tickets to dine. Yes, tickets. I'll let them explain it for you (taken from their FAQ):
"Instead of reservations, our bookings will be made more like a theater or sporting event. Your tickets will be fully inclusive of all charges, including service. Ticket price will depend on which seating you buy -- Saturday at 8pm will be more expensive than Wednesday at 9:30pm. This will allow us to offer an amazing experience at a very reasonable price. We will also offer an annual subscription to all four menus at a discount with preferred seating."
Holy smokes. Where do I even begin to talk about this type of marketing strategy? Similar to my Best Buy mobile posts (here and here), I've listed these in no particular order... Just the order they occur to me.
- Groupon. Groupon offers deals on shopping/dining with the caveat that enough people have to "buy" it for the offer to get activated. It's what they describe as "collective buying power" for entertainment. By selling tickets, Chef Achatz has created a closed loop Groupon. He gets to control the following: the number of tables at any given night as well as the pricing. Some nights, there might not be as many tables which they will control via their closed loop reservation system. One wonders if some Groupon offers are loss leaders for restaurants. He's eliminated that possibility in this scenario because he's sharply managing his margins using Groupon's operating model. A "take that" approach to Groupon. Genius.
- Loyalty Program. Their annual subscription is really a buy in loyalty program. If you peel away the semantics and look at the structure, you'll see what I mean. The value add is exclusivity: if you purchase in advance (a la Groupon), you are guaranteed preferred seating at an attractive price. This is no different from buying into a frequent shopper program. The company uses your pre paid subscription to fund day to day operations -- and probably gets some interest benefit, too! Your subscription is a liability on their books, of course, but the interest on the money earned more than covers it. Smart.
- Positioning. I'd like to focus in on this sentence: "This will allow us to offer an amazing experience at a very reasonable price." There are a couple of factors at hand.
- The first is that there's been a ton of research to suggest that buying patterns or how consumers think about buying have changed permanently because of this recession. Fine dining has definitely suffered: lower traffic, lower average restaurant ticket, etc. The success of Groupon rests on this behavioral shift. Chef Achatz knows that to maintain a steady flow of traffic and increase his reach among diners, he has to discount a certain percentage of time. The logic is that a certain percentage of something is better than 100% of nothing. The way to position that is to sell tickets and explain the ticket price differential (the Wednesday versus Saturday). Clever.
- The trick with the differential is that Grant Achatz is a very valuable brand. There's a risk to watering himself down too much despite the fact he needs to ensure steady revenue for longer term success. The solution? Mask the subscription, discount or Groupon style offering as if this is a study in flexibility. They're not calling it an offer. They're trying to demonstrate that they are nimble. Also Clever.
- Urgency. The diner is never quite certain for which night they'll be able to purchase tickets. There may be smaller numbers available one night and larger numbers the next. The restaurant also says that it will have two walk in tables every night. It's almost like a trip to Las Vegas. This does two things: first, it makes the diner try and try again. The sense of elusiveness is too much to resist. Second, it naturally drives people to purchase the subscription to relieve them of the suspense.
I'm sure there are a million more marketing and/or business strategy elements here that I've missed and it would be great to have your two cents here. The long story short here is that this is a very clever treatment to expanding into a new concept and virtually ensuring its success based on how its operated over and above the cuisine itself which is sure to be excellent. Very left and right brained thinking -- you have to admire it.