Hi!
You may not know about my start in nightclubs.
For 3 years, I was involved in nightclubs around the country.
I did almost every job you could imagine.
I say that this is where I learned how to really be a marketer.
I’ve told the story at conferences about how nightclubs taught me pricing: “Which gin do you prefer?”
Over the weekend, a friend sent me a NY Times piece about nightclub closings in NYC and asked my opinion.
I figured I’d share it with you.
I think this is right.
The NYC real estate market is the only one where the real estate costs would be accurate, but in the article…yes.
Insurance costs have been going up on everything. I don’t know the exact nature of jury rewards in NYS, but in other markets, we are definitely seeing insurance rates creeping up.
I don’t know if that is due to expenses in other parts of the insurance business or because of losses in other parts of the business, but the costs are going up considerably for most types of insurance.
As for drink prices, I’m guessing there are two things going on:
- Like the article says, people are drinking less.
- Second, people are drinking higher quality when they drink at all. The cost difference can make these premium drinks less profitable as well.
Third, NYC has a lot of weed shops now…and that’s where folks are getting their kicks. They call it California sober.
For You:
- Nightclubs are similar to other forms of entertainment. You need to make sure that the experience is worth the perceived value you are offering.
- There is a lot of competition for discretionary dollars.
- Your costs aren’t your customers’ concern.
- Be creative in the way that you make money. That will vary based on your business.
Another thing to consider is the economic situation as a whole.
Credit card write offs are spiking. JP Morgan Chase saw write offs hit a 13 year high at almost 4% of their total CC business.
Meaning a lot of customers are in a tough spot.
DW