In my last post, I wrote about restarting the start-up process for the business I want to open. First I wanted to open a brewery, but now I want to open a taphouse. Dreaming up these businesses was the easy part, but understanding what to do next was less clear. My instant gratification personality told me to go find a location, but my advisers steered me in a different direction.
One of the first things to do, they said, was to get to know my competition. As an avid beer drinker, I already have a good idea of which businesses I’ll be competing against, so I put a few of their names down on paper:
- The Parkway Tavern
- Red Hot Tacoma
- Doyle’s Public House
- Airways Brewing Beer & Bistro
- Oddfellas Pub & Eatery
There are hundreds of pubs, taverns, bars and restaurants around me, so why did I choose these particular ones? 1) They offer products and services similar to what I want to offer. 2) They are geographically situated near locations I’m considering. 3) They have proven to be popular with customers. 4) I have been a repeat customer at each of these businesses.
I entered the business name and city into Yelp’s search engine and examined the results. In addition to reviews, Yelp provides basic information that a customer would want to know, like business hours and amenities, so I built out a template in Excel to keep track of some of the common information I wanted to compare.
Then I plugged through every review for every competitor on the list and I recorded each time a quality was mentioned positively or negatively. I built the list as I went along and the template filled out substantially.
Tallying reviewer comments took some time, because you often have to interpret what someone is trying to say and tie it to a specific label. Certainly, it’s not a scientific process, but I’m sure some marketing company somewhere has turned it into one.
Many of these qualities were common to all of the competition, but some were specific to one business. Finding unique qualities and quantifying the number of people who talked about those qualities really helped me understand the identity (or story, as a marketer might call it) of that business. It also became clear very quickly which common qualities, like friendly and attentive service, customers look for in their pubs.
Using this template, I can move on to profile businesses within a more specific geographic location, or ones that have not met their customers’ expectations, or ones that share the same “unique quality”, all of which can help me better understand how I might be more successful with my own business.
What I Learned
A few clear facts emerged during this first run at competition comparison: 1) People expect pub food at a pub, and having good pub food means they are more likely to come back. 2) If you’re going to serve food, people really notice if you also offer vegan, vegetarian and gluten-free options. 3) People will come back if they feel they are getting a good value. 4) People want to have entertainment options.
I suppose none of this should come as a surprise, but it changed my thinking about a number of things:
I didn’t want to open with an in-house kitchen, but now I’ve heard it loud and clear: People expect to have food with their beer. I knew this, really, but my answer was to locate in an area where there were plenty of take-out options from restaurants nearby. These kind of off-site food arrangements seem to be awkward for the customer, though, and I would sacrifice a lot of potential revenue if I wasn’t providing the food, myself. If John Taffer is right, customers are likely to spend 52 minutes more in my taphouse if I have food available. So, in addition to profit on the food, that would typically include another beer.
I was blown away by the number of comments related to diet-specific concerns. I should understand this because, hey, I’m lactose intolerant. I tend to avoid certain menu items when I eat out, so why wouldn’t someone else do the same? My real takeaway from this, however, is that having good and plentiful diet-specific options really makes you stand out.
One business in particular received props again and again for the value they provided. Their food is cheap and easy to prepare, which allows the business to keep prices low. The tantalizing preparation options really engage the customer and encourage them to come back for more, which they will because it’s such a great value! This will be a challenge for me: How can I create a similar value?
Finally, people want to have entertainment options at the pub. Originally, I envisioned a quiet place with nooks and crannies for people to tuck themselves away with a book or a tablet or for a quiet conversation. Well… that’s what I would want, but I think I saw maybe one comment about how great it was to be left alone in a bar. Instead, dozens of reviewers talked about shuffleboard, pinball, pool, darts, TV and movies. “I loved that we could play a game of Boggle!” said no one, ever, apparently.
And that’s a perfect example of why research is important — it encourages you to compare your expectations against real data. What you like isn’t necessarily what will sell. Your niche may not be much of a niche. Your target market might not be what you think it is.
Next up: Where should I set up shop?