Strategic marketing and negotiation approaches in club promotion

Club Promoters - Strategic Keys to Success

Given the forces of globalization and market liberalization, combined with the continually increasing demands of all categories of stakeholders (e.g. customers, employees, business partners, governmental and non-governmental institutions), and the developments in terms of technology, it was only natural for the competition within the business community to significantly intensify. Today's organizations strive to achieve points of difference which will offer them a better perception within the market, but achieving this differentiation becomes ever so difficult. What is then left is striving to offer the highest quality of the sold merchandize. But what if the organization does not sell material items, but services? Their competitive strategy would revolve around attracting as many customers as possible and delivering high quality services, with the aid of skilled and obliging staff members.

An interesting example in this direction is given by the clubbing industry. However clubs do sell material products, such as sodas, coffee or alcohol-based beverages, they primarily function due to the services they offer. In this instance then, clubs sell the possibility to have a good time, to hang out with friends, to listen and dance to some good music or even to view a concert. Clubs also help individuals make a fashion statement and offer their target market a sense of belonging. To explain the sense of belonging, take the example of 25-year-old attorney. At work, she has to be professional; at home, she has to be responsible; but at night, she may go the club and hang out with the people she wants, those with whom she shares common interests outside work or domestic chores.

A general look at the clubbing industry points out its increases over the past years (Malbon, 1999). In order to cope with the intensified competition, club owners implement a wide series of strategic approaches. One of them is that of hiring outside consultancy. This mostly refers to club promoters, specialized individuals, who will help organize and promote the club or an event occurring within the club. The club promoter is paid on percentage based on the success registered by a clubbing event. It can come to a commission of $1,000 a night, making this profession one of the highest paid ones. The interest of the economist can easily be raised by this profession and he could wonder as to the strategies implemented by the club promoter to achieve success. The following pages will try to answer this question, mostly in terms of marketing strategies and negotiation with the club management.

2. About Club Promoters

As it has been pointed out in the introductory part, the emergence of club promoters has been due to an increased competition within the industry. Aside this however, it was also due to several social changes. These mostly refer to individual and group preferences in spending leisure time. "What to do on a Saturday night is now a complex question. The proliferation of new club nights and dance music genres has blown this area of the nightlife industry wide open" (Kent, 2002).

Club promoters come to answer this question and their purpose is to attract new customers and generate loyalty from the already existent customer palette. "Club promoters organize shows, book bands, venues and look after publicity, often designing, printing and distributing flyers. They don't always make a lot of money from club gigs, as they are often put on to promote a new record" (Brophy).

The position of club promoters is generally assumed by young adults, most of whom are males. Women find it extremely challenging to succeed in the nightlife industry, generally as they are discriminated against. "Female DJs and promoters face discrimination and an uphill battle for recognition and respect from their male colleagues" (Hutton, 2006). Women however feel that they can do a better job that their male counterparts as they work harder and they have to make increased efforts to prove their worth. Also, as Fiona Hutton points out, women customers of clubs support the woman DJ or promoter and this further helps in creating a more pleasant environment and developing more fruitful relations with the clients.

However the gender issue within the nighttime entertainment industry is an interesting one and deserves further research, this paper will focus on the club promoter as a unisex individual and will address the general skills and strategies of a club promoter, regardless of gender. There are six compulsory requirements for a promoter to succeed: they have to proactive, outgoing and manifest a strong desire to make money from partying; they must learn people's names; they must treat all guests and VIPs, and they must hire a photographer (Squidoo, 2008).

3. Marketing Strategies of Club Promoters

The most important thing for club promoters is their ability to create a pleasant environment, in which the individuals feel at ease. This environment will offer a sense of belonging, which is beneficial from two standpoints. First of all, it ensures the return of the old customers and the consolidation of a loyal customer base. Then, through word of mouth, other individuals will hear of the atmosphere created in a club and will desire to become part of it. But the sense of belonging is not sufficient to continually attracting new and old customers. They have to be shown a good time in order to return. For some individuals then, the club is their way of making a statement; it is their way of standing out from their ordinary lives. Ultimately then, the job of the club promoter is to create a desirable environment, offer a sense of belonging, show a good time and allow the opportunity for individuals to make a statement. All these have the final purpose of attracting customers and consequently increasing the profits of the club, and are generally achieved through a concomitant implementation of various marketing strategies. The most relevant of these marketing approaches are discussed below:

Promotional Strategies

Just like in the common understanding of the theoretical concept, promotional strategies within the nightlife industry refer to the offering of several deals to consumers. But as the economics books teach us, there is no perfect theoretical recipe and each entrepreneur has to adapt his knowledge to the particularities of a given industry or situation. Successful club promoters have understood this and have customized the scholarly suggestions to the requirements of the field in which they operate.

Club promoters implement numerous promotional strategies to attract customers. Simon Kent (2002) for instance points out that they even "produce their own merchandise to go with the club, such as clothing and compilation records of music." By doing this, they create a sense of unity and a better integration within the clubbing community. Also, these items can easily be perceived as fashionable and can on their own attract clients. Say for instance that an individual who has been spending his Saturday nights at club a finds out that club B. is making customized T-shirts, with a picture of the customer. The picture to be used has however to be taken inside the club. The retail price of such a T-shirt would be modicum, but it would present an advantage - whilst the front of the T-shirt will have the picture of the customer inside the club, the back side will contain an advertisement for the club. It could state its logo and its contact information. Presented with such a situation, it is highly likely that the individual will switch to club B. In the detriment of club a. This marketing strategy is extremely powerful for overcoming competition.

Another promotional strategy used by club promoters, with the support of the club management, is that of offering the customer price discounts. Such a strategy is multifaceted and has to be adapted to the unique requirements of each club and each situation. An example of discounts to new customers is that of offering the third round of beverages on the house or the offering of fifth complementary bear after the purchase of the first four. In terms of loyal customers, club promoters implement a different approach, most commonly materialized in the offering of a complementary bottle of the customer's favorite beverage.

Future benefits

The next strategy used by club promoters to attract customers is an extremely interesting one. Customers are not offered any benefits on the spot, but the promise of future advantages. For instance, at the end of the night, when the customer receives the bill for the consumed beverages, he could also be given a discount coupon of 10% of his bill. He would only be able to use this the next time he returns to the club, say club C. Therefore, the following week, the individual has to choose the club to go to. Considering that he has had a good time the previous week at club C, and he also has a financial advantage of once again going there, it is likely for him to choose the respective club again. This strategy is useful not only in overcoming the competition, but also in consolidating a loyal customer base.

Customer relations

Club promoters manifest an increased attention to details and they directly interact with club clients. They therefore get to know the customers better and gain superior skills in satisfying their needs. This is mainly useful for the already consolidated customer base. Given that the club promoter is familiar with the preferences of a loyal client, he will be able to offer him his favorite beverage on the house. This will further increase the client's satisfaction and make him even more loyal to the club.

A vital aspect of customer communications is that of knowing every customer by name. However this is rather impossible, it can be achieved in the case of loyal clients. "Sounds kind of stupid but remember this, people really feel special when you know their name...especially when you just met them or when you've only met them once. Everyone likes to feel important and knowing people's name makes them feel important. it's not always easy to remember everyone's name when you meet them (especially if you've been doing a lot of partying that night) but try your best to work at this...it'll only benefit you" (Squidoo, 2008).

Aside interactions with the already formed customer base, the club promoter also engages in communications with the potential customer. In this instance, they create fliers and hand them out on the street. Promoters often design these fliers by themselves and they contain references and advertisements to the club, but also at least one specification of an issue which will attract the individuals to go to the club. It could refer to a promotional offer, the guarantee of a good time or a concert to be organized.

Besides fliers and street banners, club promoters also design advertisements which will be aired on numerous media channels, including television, radio or the internet. Online marketing has become an extremely popular technique of addressing the clients and this can be achieve through emails or advertisements hosted on tertiary websites, as well as the development of a club website. Promoters will also encourage club managers and owners to engage in conversations with the customers. This will make the clients feel welcome. Foremost, the ability to talk to the owner will better allow the customers to identify and associate with the successful figure of the club, further increasing their satisfaction, the chances of their return and the future sustainability of the club's profits.

Ultimately then, club promoters implement all promotional and customer communication strategies presented by the economics and marketing textbooks. All these endeavors could be considered as promotional strategies, but have been included in this section as they play a vital role in communicating with the customer, getting him familiarized with the club and raising his interest.

Events

Another means of attracting customers is through the organization of special events. To successfully achieve this, the promoter has to once again use his relationship with the clients. In this instance, he would engage in conversations with the clients and find out the bands or singers they prefer. He can also retrieve the necessary information by conducting a poll. The process has to be discreet as not to disturb the guests. An efficient way of achieving it is by offering customers piece of paper with the bill, asking them if they would like to state their musical preferences.

The promoter will then be able to contract the band or singer which is most requested and organize a concert within the club. This strategy is useful in two meanings:

It further increases the satisfaction of the loyal customer base, who feel cherished as the club has organized a concert with their desired band

The concert will attract new clients.

However it is less common, some promoters organize other events outside concerts. They could refer to acts of stand-up comedy or special celebrations. These would however have to occur in comfortable rooms, separated from the rest of the club, also known as snugs. This strategy has a dual benefit. First of all, it attracts customers by allowing them to celebrate birthdays or other occasions within the club, where they can have drinks and dance in an intimate setting. Then, the snug is also useful as the special occasion does not interfere with the average night of clubbing and does not disturb the rest of the customers.

4. Negotiating with the Club Management / Owner

There are two distinctive issues which have to be discussed by the manager of the club and the promoter. They refer to the remuneration of the promoter and to the expenses to which the manager will agree in order for the promoter to be able to implement his strategies.

The payment arrangement is generally simple - the promoter receives a percentage of what the club had earned through an event. The negotiation part refers to the actual percentage. This is often fixed, but it can be changed. The outcome depends on the negotiation skills of each party. The system does however present some advantages. The percentage payment then means that the promoter will be directly interested in having the event succeed and bringing money to the club. Then, since the club management does not have to pay the promoter upfront but as a percentage of his registered success, they will better trust the endeavors of the promoter. Simpler, the system of payment in percentage increases motivation and trust between the two business partners.

However the payment of the promoter may be a matter of reduced complexity, the spending budget on marketing activities is a different challenge. Club promoters often encounter difficulties in getting the club owners to agree to the necessary costs. The latter often believe that the club promoter should be able to register success without spending large amounts of money. The club promoters have to argue their claims by proving the worth of the investment.

An example in this instance could be given by a luxury club, frequented by wealthy customers. To ensure the satisfaction of the loyal customers, the club promoter would suggest the offering of a complementary bottle of champagne. And this champagne has to an expensive and high quality one, which requires increased funds. If the manager does not approve of the funds and forces the promoter to offer a cheaper bottle of champagne, the wealthy clients might be insulted. As a consequence, they may not return to the club, causing as such the loss of loyal and wealthy customers. The final argument of the promoters then is that the management of the club does not afford not to make the investments in increasing customer satisfaction, mostly because the losses would be larger than the required investment.

Promoters are often aware of the resistance they will meet when setting the budget with the club owner and they therefore set a high level of the costs. They are then able to lower some expenses according to the desire of the manager and still close a deal that will ensure sufficient funds.

Another issue which is often a matter of debate between club promoter and manager is the lack of desire managers and owners have in directly dealing with customers. However, club promoters believe this interaction to be important for business. The manager could easily argue that interaction with the customer is what he pays the promoter for, but the latter could counter-argue that the customers may feel cherished if the manager takes some time of his busy schedule to interact with them. The ultimate argument of the promoter is that with a reduced effort in time and energy, the manager would himself be able to increase customer satisfaction, generate loyalty and ensure reliable future revenues.

5. Conclusions

The clubbing and nighttime entertainment industry has been increasing throughout the past years, generating as such the need for developments in this area. A response to these changes has determined the occurrence of club promoters, or specialized individuals who attract and retain customers. Clubs sell a good time, a statement and a sense of belonging, meaning then that the club promoters have to emphasize on these features.

The strategic approaches implemented by club promoters are numerous and varied. Some of the most relevant courses of action followed by them include promotional strategies, constant communications with customers through both traditional as well as online channels, the offering of current and future benefits, the organization of special events or the assurance with entertainment.

The job of club promoters is rather challenging and the occupant of the position has to possess numerous theoretical skills, but he must also be 'street smarts.' He must be able to negotiate with the manager and other partners, such as suppliers or hostesses. Ultimately however, the promoter has to be a serious and reliable individual, who is able to gain the trust of the audience.