Why are successful nightclubs successful?
In the midst of despair there is hope. The nightclub industry has reluctantly counted itself among those business sectors suffering mightily from our economic downturn.
However the recent purchase of Ruby’s nightclub and Oxygen as part of a four-venue €4 million deal (The Woodman and Muldoon’s pubs bring up the rear) by the Carlow-based McLaughlin family of Dinn Rí fame came as encouraging news.
Surely such an investment in these times shows light at the end of the nightclub tunnel?
“We see the recession as an opportunity to go forward,” says the General Manager of the Dinn Rí Group Eugene McGovern, “We felt that there was a market there, an opportunity there. It may take a couple of years to realise our investment but we do expect it.
“We’ve also invested very heavily in Carlow – about €3 million in the last 18 months,” he continues, “We completely refurbished existing properties and added on another piece to the Foundry at Dinn Rí called The Theatre where pre-booked parties can come and get waitress service.”
This has proved very successful, especially on Saturday nights where the 180-capacity plushly-finished zone overlooking the rest of the club is totally booked out.
Nevertheless Eugene agrees that it’s tough out there.
“Our business is down” he agrees, “but all you can do is try to control how much it goes down and try to get your share of the market that’s out there.”
The management has looked very closely at their business over the last two years and invested heavily. But some factors are beyond nightclubs’ control including rising commercial rates and insurance costs, the smoking ban, the growth in drinking at home and the mounting expense of getting a night out to a club. For example the Taxi Regulator’s fixing of prices has removed the competitive transport element and the Dinn Rí’s reduced charges on the door have failed to make a difference, says Eugene.
During all this time none of the Dinn Rí’s staff have been laid off. Instead management has cut other costs such as that of food, beverages etc.
The club is now run over four nights.
Students from Carlow IT and Carlow College, the two Third Level colleges in Carlow (where the mix is anything from 18 to 35 or 36), predominate Thursday nights.
Dinn Rí’s Tower Live venue runs in conjunction with The Foundry and the live music profile of The Tower means an older age profile for this venue.
Marketing for the Dinn Rí used be done principally at General Manager level (Eugene himself). About nine months ago, however, management realised that nightclub marketing is very specialised and eventually took on a marketing person two days a week. As a result, they’ve now taken on a Marketing Assistant on a full-time basis.
“We see marketing as being a hugely important part of it,” says Eugene who points out that marketing has become a lot more complex.
A lot of business comes via their website and so at the moment their new marketing strategy focuses on the website they built about two years ago.
“Also having club membership enables us to contact our customers,” says Eugene, “We’ve a facebook with 3,000 members and that’s not even a commercial facebook but simply a staff member’s who has 3,000 ‘friends’ on it.
“Last year we set up a discount system for the two colleges here including reductions on admission to the nightclub and other businesses in town. It has 3,500 members and we see that growing – we see it doubling in size in the next 12 months and this will be added to by new students to the tune of 1,500 next September. We use a texting system to communicate with the students on the student discounts.”
The biggest obstacle to the industry moving forward has to be the licensing situation in regard to the lack of a nightclub permit.
“It’s quite extraordinary, our being a member of the European Community and nightclubs here still having to close at 2am and 1am on a Monday morning,” says Eugene, “We’re fighting hard for a nightclub permit. We’re on our third Minister for Justice over the last 10 years, we’ve had promises and promises but no one has had the ambition to change the law on this. The nightclub business will continue to struggle unless a nightclub permit is brought in.”
Still, Eugene remains upbeat about it all. And in this he is not alone.
Over in Galway, both Central Park and Halo are experiencing consistently strong trade, according to Paula Feeney, who’s responsible for Sales and Marketing for the Central Park Group.
“While we certainly have been aware of the effects of the recession on the discretionary spending power of our customers, we’re proud of the continued success of both venues,” she says, “With different target demographics for both clubs, we’ve been very successful in maintaining our customer base here in Galway.”
Central Park targets the 18 to 23 age group and Halo the over 23 market. The two clubs not only welcome locally-based customers but being in Galway, they welcome national and international tourists each week too.
Having been in operation for 22 years, the Central Park Group avoids what she terms a “Fire Fighting” approach to nightclub management. Instead it works to strict operating procedures and long-term marketing strategies.
“We believe in the strength of our brands,” says Paula simply.
The clubs employ a “varied marketing mix” from press, radio, below-the-line activity and customers’ interaction to viral marketing.
“Event management is also key and we run high-impact theme events on a regular basis,” she says.
Trade has been going exceptionally well too in Reardens Bar & Havana Browns nightclub in Cork where they too have always traded well on their name.
Sinead O’Mahony, who’s responsible for PR & Marketing for both clubs, explains, “People have always stayed loyal to us and we see many visitors to the city being directed to us”.
Its nightclub customer profile runs from 21 to 30 years-old.
“Depending on the given night we would have a variation on the customers that would frequent the bar,” says Sinead, “Monday, traditionally, is a great industry night: bar workers, hotel workers and also shift workers. Mid-week would see a lot of students. Wednesday and Thursday would see a lot of emergency service personnel, Friday and Saturday nights – a lot of professionals, office workers etc. Sunday nights have a lot of GAA customers in the bar and club.”
As with all businesses, nightclubs have had to make some changes and step up to the plate in offering customers more for their money.
“Because we are a late bar and our trade would have always been quite late, the slowdown in early trade hasn’t affected us,” says Sinead, “We notice that a lot of customers are coming straight from home into the bar around 10.30pm whereas before they may have come from smaller bars a lot; now, they’re taking to the drinking at home before going out.”
The same goes for the nightclub. Often, customers are coming from home straight to the club which opens at 11pm.
“We also have a VIP Lounge in the nightclub where we offer customers that extra special treatment: a hostess, table service, private bar. This area is quite popular and groups such as birthday parties, hen nights etc would book it months in advance to get a seat”.
Rearden’s in-house marketing team focuses primarily on advertising in-house.
The premises already have a large customer base and they aim to keep them coming back.
“We have a huge database that we would text on a weekly basis, keeping them up-to-date on gigs, promotions and events that are happening in the bar,” says Sinead, “In-house posters provide us with another medium to get our message across. We run a membership database in the nightclub so again we can contact our members through e-mail, text or letter. We also run an up-to-date website and facebook to cover the social networking aspect.”
Sinead believes that Rearden’s needs to maintain what it has and ensure that the premises remain run-well and that its entertainment is fresh and what people are looking for.
“There is a lot of competition out there,” she agrees.
“We’ve brought in a few big-name bands as well as tribute bands that play Wednesday, Friday and Sunday and they have gone down a treat so I think that if we could put on some bigger names, people would really appreciate it. Same goes for the nightclub: a few big name crowd-pullers always go down well, so this is something that we’ve been looking into a lot.”
Earth nightclub at the Westcourt Hotel in Drogheda was originally opened on the 12th of July 1994.
“Although it was still running successfully with the same management team for many years it was obvious that the club needed to be updated and compliant with the smoking ban,” explains General Manager Sandra Carney, “Our customers of late were certainly more travelled and knowledgeable of the entertainment business than ever before.”
Now, following a complete overhaul, trade at Earth is up 20 per cent on last year and growing each week.
“We have to invest in the décor of the nightclub so that it appeals to everybody,” she says of the renovation which has a plush feel to it and which has considerably enhanced its sound system.
A great deal of work has also been put into promotions and event parties, she adds, “… which seems to appeal to our customers in a time of doom-and-gloom. We also had to revisit our admission prices to encourage people just to come out. Thankfully, we haven’t had to drop our alcohol prices”.
Earth’s customers range from 18 to 50 with a very successful ‘Oldies’ night on Thursdays.
Friday nights are a little more ‘dance’ while “Saturday night is one where anything goes and there’s a little more for everybody,” she says. Sunday nights are more laid back with a little bit more R&B played.
“As you can see we’ve tried hard to give to everybody, not alienating any particular market.”
Earth has a membership system and a full-time promotional team.
“We use newspaper, billboards and on occasion radio to help market the club,” she says.
But with the fall of the national pub trade has come the realisation that people are more inclined to have a few drinks at home and then go to a nightclub as witnessed by the amount of taxis pulling up outside Earth on a constant basis.
A large investment is also going into the Barrocco bar in the Westcourt Hotel, one of Earth’s major feeder bars.
What comes across from talking to this sample selection of successful clubs is the importance of pursuing excellence in certain aspects of the business: the ability to match venue to age profile, the importance of being relevant, the facility to pre-book special areas in a club, reinvesting in the premises and renovating — and the absolute necessity of keeping communications between the club and its customers open and stimulating.
It’s also important to look forward rather than back and plan for the future on an ongoing basis. Above all, what these nightclubs seem to have operated from of late is music to the consumers’ ears: value-for-money, value-for-money and value-for-money.
The Chief Executive of the Irish Nightclub Industry Association Barry O’Sullivan is first to admit the immense challenges facing the industry.
“We know that the nightclub industry is more investment intensive than any other sector of the licensed trade” he says, “as our members point out the licensing cost of €410 per night is a huge burden and the trend of more and more people choosing to drink at home is a major challenge. This is further compounded by the absolute necessity to offer customers better value for money which does not necessarily mean cheap drink. The best operators are trying to find out what ‘value’ means to their customers and are trying to be inventive about delivering that value.”
He’s keen to point out that nightclubs need to stick to what they are good at.
“There is no doubt that the dancing, music, entertainment and boy-meets-girl factor being offered in nightclubs cannot be easily replicated at home and those, in my opinion, are the key selling points of nightclubs.”
It is also clear from the industry leaders that the offering and communication about the offering is critical.
“Nightclubs have to be dynamic in how they promote their venues and the successful operators clearly use membership systems, texting systems and social networking channels to hit their target audience.”
