gaffneys

gaffneysI live in a small city, Saratoga Springs, NY, whose population and retail business at least double for 7 weeks each year. It’s called “The Season.”

The resort retail business model is to:

– Rake in profits during this short window plus December and a few special weekends and holidays, and
– Try not to lose too much money during the rest of the year.

Note that the chain stores in town aren’t nearly as aggressive and creative as the local merchants who use a variety of business and marketing approaches that some of the more successful owners have fine-tuned during the past 30 years.

Flexible Capacity

While many businesses simply expand their hours and staff by 50%, Gaffney’s is a bar-restaurant that varies its capacity from 2 to 6 venues depending on the crowds they are anticipating due to the season, day of week, time of day, weather, and entertainment. This is a pretty sophisticated equation to get right, and yet the establishment is always properly staffed.

Product Mix

Many remix their inventory two ways:

  • Simply double their inventory by mid June; and/or
  • Bring in higher priced merchandise for the summer crowd.

Liquor & wine stores tend to do both while restaurants are known for adding expensive steaks and lobsters to previously middle-class menus.

Promotion

You see everything that’s used in non-resort cities, plus sidewalk “interrupters” to grab the hoards of curious tourists including restaurant barkers, sidewalk sales, stationary sandwich boards in the middle of the sidewalk, blaring music, and my favorite: A walking cupcake for Betty’s 1950’s style cupcake café that even has a vintage double-decker bus used for events.

Marketing Budgets  

Merchants have two spending approaches:

  • Cut the spending to near zero since they’re getting as much business as they can handle; or
  • Add spending to drive in the maximum revenue because they’ve staffed up and must make their higher staffing costs pay off.

There’s no right answer, although incremental spending is safer as long as there’s a plan vs. simply spreading money around to more options.

Media Plan  

Since the summer season brings in different segments interested in horse racing, classical music and ballet at the Saratoga Performing Arts Center and simply joining a vibrant scene, there is an opportunity to change the marketing plan. For example, each summer there are new newspapers, magazines, and special events, including charity fundraisers nearly every night.

No one plan works for everyone, but every owner must plan and execute different marketing strategies and efforts during the peak season.

Most of my experience has been with multi-billion dollar companies, and yet our marketing decisions were very similar to these small merchants:

  • Filling up the manufacturing capacity to maximize profits,
  • Adjusting the product mix to increase sales and profits,
  • Adjusting the marketing budget to deliver specific opportunities, and
  • Tailoring the media and promotion plans to fit the changing situation.

About Richard Sellers

Richard is Chairman Emeritus of the Marketing Executives Networking Group, founder of Demand Marketing consulting firm, and former Sr. VP of Marketing for three multi-billion dollar companies: CEC, WLP, and Service Merchandise. His early career was at GE, P&G, Playtex, and Marketing Corporation of America. He’s also a volunteer counselor for SCORE assisting small businesses in upstate New York. You can follow his communications about marketing, job search and careers here and at mengonlineENTREPRENEURS QUESTIONS, and on Twitter at @Sellers_Richard.

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"Small Resort City Teaches Marketing Lessons" by @ShellyPalmer

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