Annoying the existing customer

I had an interesting chat with one of the ex-directors of Pizza Express the other day. The substance of the interview will appear elsewhere so I won’t blow the gaff, but for me one of the most fascinating points was his view of the existing customer. You know, the one who’s been with you since you had your first premises (or in his case restaurant). You opened this terribly trendy place in Kensington or Chelsea and all the upmarket people who liked these best-kept-secret type places flock to you. The quality is great and you realise there could be some more money in this if you play it right.

So you start to franchise, but your core customers stop coming to you immediately.

The reasons are straightforward and to do entirely with snobbery. The top echelon (self-appointed of course) simply won’t come to anything that looks like it’s part of a more substantial chain. They don’t like the idea that other people will be allowed in; people who dress differently, vote differently and people who find they can buy from the same menu in Penge as they can in Primrose Hill. The question is what to do about it.

The answer – and this was the bit I found most interesting – was to market aggressively to your new audience and let the other ones go somewhere that charges more for the same sort of service. A lot of franchisees and franchisors I speak to spend a lot of time wondering how to sustain interest among their existing clientele and the brutal answer is that it can’t be done. A chain is by definition a radically different business from a standalone place with some social cachet.

There’s a lot to be said for a good chain of outlets, whether it’s done through a franchise or wholly-owned branches. The customer should always know what they’re going to get; if you send a child to Stagecoach to learn to act, dance and sing and move house you’ll probably find there’s another one near you offering a similar if not identical service. If your child refuses to eat anything when they’re out except the margherita pizzas from Pizza Express and you’re on holiday in Margate then the Margate branch (apologies if there isn’t one, this is purely an example) will have an identical product to the one they’ve accepted before.

The thing to do is to revel in these similarities and consistencies. They’re a good thing for the right customer, albeit difficult to manage for the proprietor who has to monitor hundreds of restaurants so that they’re using the right amount of cheese topping.

They are of course a disastrous thing for the original customer who wouldn’t go anywhere as standardised as that if their lives depended on it. But then, sticking with that customer whilst trying to expand is probably a good way of scuppering the business plan completely anyway.

Guy Clapperton is a freelance journalist who specialises in small business issues and has written for the likes of The Guardian, the FT and the Daily Mirror. Guy has written about finance and franchising for SmallBizPod. http://www.guyclapperton.co.uk