By Gregg Hollmann, “Party Professional”
“Bar Rescue” on Spike TV is one of my favorite shows. Bar consultant Jon Taffer practices a no-nonsense, confrontational leadership style to transform underperforming bars into winners. On the educational front, Taffer focuses on the science of running a profitable bar. Bar science involves using systems to maximize revenue, contain costs and generate positive customer reactions. The show is also hugely entertaining, with Taffer launching into a tirade when uncovering negligence at a business. These transgressions include insect infestations in the kitchen, bartenders who over-pour drinks, owners who drink on the job, and underperforming employees.
The bar and mobile DJ businesses are not exactly alike. There are important similarities however. Bars and DJs are both in the “entertainment” business and rely on talented staff to provide a consistent, high quality experience for customers. Branding and customer service are also critical in each industry for a business to shine among a glut of competitors.
Listed below are ten lessons that DJs can learn from Jon Taffer of Bar Rescue. These lessons have been gleaned from Jon Taffer’s 2013 book “Raise the Bar – An Action-Based Method for Maximum Customer Reactions” and my own observations as a long-time viewer of the show.
Evolve or Perish
Businesses that seek out Taffer’s consulting services are typically once-successful businesses whose owners failed to evolve with the times, or else neglected their operations. Symptoms of a declining business include a shrinking customer base and tightening cash flow. If your once-successful DJ business is in a state of decline, then you need to take a critical look at the reasons why.
The Right Type of Passion
At least so far as the bar business is concerned, Taffer doesn’t necessarily believe the adage of “do what you love and the money will follow.” Instead, he states that the greatest shot at success in the bar business comes when an owner loves business. The successful owner should be passionate about digging into the numerous operational aspects of the bar, ranging from accounting to inventory to marketing.
Similarly, being a skilled or passionate DJ will not necessarily make you financially successful in business. DJs who lack a proper business background are advised to increase their knowledge by reading books (such as Publisher Stacy Zemon’s book “The Mobile DJ MBA” (available on www.test.promobiledj.com), joining a local DJ association, or attending educational seminars at DJ conferences.
Branding and the Power of the Re-Brand
Taffer stresses that your brand is what your customers think of you, not what you think of you. In other words, it is a mistake to create a brand that is a monument to yourself but that fails to conform with market reality. For example, one bar rescue client enjoyed a premier location just off the Las Vegas Strip but clung to an outdated business model stressing blues music. The bar was re-branded by Taffer as “Bar 702” with 702 referring to the local area code. The new brand was critical in attracting a critical mass of local residents and casino workers. Taffer almost always re-brands his Bar Rescue clients, either changing or tweaking their business names to properly align the brand.
DJs should periodically examine the branding of their business to ensure that it is current and relevant to their target market. For example, does your logo and branding reflect the fact that you now offer Photo Booths and furniture rentals?
Design Your Business and Systems to Create Favorable Reactions
Taffer stresses that human beings rely heavily on emotion in decision making. This statement also applies to individuals who claim to make decisions scientifically and void of emotion. He stresses, “customers don’t make buying decisions logically, relying solely on ‘objective’ factors such as price, features or functionality. The emotional component of decision making is one you can and should play on.” Creating profitable customer reactions often doesn’t require spending big bucks. For all businesses that Taffer consults for, he determines what customers want and expect, and what kind of reactions he wants them to have. Then specific strategies are put in place to “manipulate” the proper reactions.
As DJs, how can we create reactions in prospective clients that make them abandon their pre-conceived low budget for DJ entertainment and select a higher-end package? (Hint: photos and videos are great tools to excite prospective clients). How can we motivate past clients to refer our services or to leave a positive online review?
Taffer argues that pricing should be determined by real data (i.e., costs) and that business owners should not be afraid to cross a line where a number becomes unacceptable to a customer. Rather, business owners should raise prices to preserve profit margins and increase the “perceived value” of their offerings. As per Taffer, “the whole point of perceived value is selling to customer desire, ego and fantasy.” Elaborating further, Taffer states “if you are in a marketplace that accepts a $22 hamburger, you’d better come up with a burger that is worth that price.” Viewed another way, when a customer complains that prices are too high, what they are really saying is that the experience being provided by the business is not worth its price.
For DJs, pricing is a highly controversial topic and many of us gripe about being undercut by competitors. Rather than join a “race to the bottom,” instead DJs should maintain or raise prices and focus on increasing the perceived value of their services.
Know Your Numbers
In diagnosing the ills of a troubled bar, Taffer takes a look at the financial books. More times than not, the owners don’t have a solid grasp of their numbers and will not know important ratios such as food costs divided by food sales (this ratio should be less than 30% to run a profitable operation).
As DJs, we should command a strong understanding of our numbers. As an example, for that $2,000 WeddingWire advertisement, what is it costing you as a percentage of wedding sales? Or viewed another way, how many advertising dollars are you spending to acquire each wedding booking? What do your overhead costs (rent, insurance, office supplies, etc.) represent as a percentage of sales and per job? What is your average profit margin per each type of job that you perform? What was the return on investment on those 24 wireless uplights that you purchased last year? By having a strong grasp of our numbers, we can make more informed business decisions and keep our operations profitable.
Taffer advises that owners hire for attitude, not experience. As per Taffer, “the problem with traditional approaches to human resources is that they place too much importance upon industry familiarity and too little on identifying the personality traits necessary to really drive customer reactions.” DJ companies seeking to add staff are prudent to compile a list of desirable characteristics in new hires and interview around these criteria. Recruiting a new DJ with the right attitude is often a better choice than hiring a seasoned DJ who brings with them entrenched habits and the wrong attitude.
In the hospitality industry, the word “training” is common, but Taffer differentiates that he teaches employees to work in the business. “Training is behavior modification; it takes too long.” Imposing too rigid service standards can dampen the great personalities that you took great care to hire in the first place. As DJ company owners, we should allow our DJs to put their own unique spin on an event, rather than insisting that they run their parties exactly like the DJ company owner.
Don’t Drink on the Job
The goal of operating a bar/restaurant is to run a successful business, not to drink on the job and hang out with friends. Taffer sees too many bar owners going into business for the wrong reasons, and these businesses inevitably fail. DJs are wise to remember that while working in fun, social environments, our ultimate goal is to entertain guests, not to indulge our own needs for food, drink and entertainment.
Managing Problem Clients
In any business, there are difficult, hard-to-please customers. Taffer advises that business owners cultivate a new patience with these difficult customers by acting as you would with a difficult relative. Demonstrate kindness, patience and respect to deal with these clients more effectively.
The ten lessons described above are the tip of the iceberg. There are a wealth of valuable business lessons to be learned from the regular viewing of Bar Rescue. If you’ve yet to check out the show, I strongly recommend it. If anything, you will enjoy the intense and passionate personality of Jon Taffer when he digs into underperforming bar owners. Regarding his patented screaming, Taffer confesses in the book that it is calculated and only done given the compressed timetable for a bar rescue (five days). Taffer recommends that business owners not scream at their employees.
To view past episodes and a show schedule, visit www.spike.com/shows/bar-rescue