Friday, May 14, 2010
The nightclub market is more crowded than ever now-a-days.
As with any oversaturated landscape, it gets harder and harder to make a difference in the marketplace, let alone stick around.
Like worried product managers, nightclub entrepreneurs increasingly employ their own gimmicks and tactics in the interest of fast money.
The problem, like any strategy based on shortcuts, is that they come at the expense of lasting brand equity.
One of these tactics is known as "bottle service".
Bottle service is a complete tourist move. It's the process by which anybody can call ahead to a club and reserve a "VIP table." That is, if they shell out a hefty chunk of change for an overpriced bottle of bottom shelf liquor.
The current LA rate is about $300 for a bottle which cost the venue $15 per bottle.
It's a great revenue stream for a club, especially in a time of fierce rivalries and multiple options for the consumer.
The problem with bottle service is that it's a pay-for-play tactic: Consumers can spend a lot of money, buy a couple of bottles, and get seated at a prime VIP table.
But if a consumer is not willing to buy an expensive bottle, chances are they're not going to be sitting.
In other words, if you don't pay, you're marginalized and so is a hefty chunk of the authentic scene at the club.
Now, its one thing to view Bottle Service as a positive revenue source as you create a great brand; its an entirely different matter to view this system as a revenue stream that will create the brand.
Brand value is the most important currency today.
Like when you stay in an Andre' Balazs hotel [Balazs owns such hotels as the Mercer in NYC, Chateau Marmont & the Standard in LA]. You know you can count on a certain experience.
Maintaining the integrity of your brand is the only way to transcend trend.
But here is the real key, if a club has longevity because everyone wants to go there and they are not forcing people to buy bottles, usually they will end up selling more.
Whether it's buying your way in by bribing somebody at the door or by buying lots of bottles; you cannot sustain a great venue anywhere, if people can simply buy their way in.
This is why - "Bottle Service is for Tourists"