‘Starving Crowd’ Is The Lifeblood Of Your Business
Posted by Sant Qiu in : Singapore on October 5, 2007 , trackbackCrazy Horse, that famous topless revue from Paris, made its first Asian debut in Singapore in December 2005. Hailed as the largest Crazy Horse venue in the world when it was opening, it garnered the same front page attention when it announced its ‘demise’ thirteen months later.
Interestingly enough, when Crazy Horse was opening, I made the comment that it will not last long in Singapore (The France and Last Vegas outlets are big hits). Being a marketing consultant, I have a knack of being able to tell what works and what won’t in business. Many times I pass by retail shops and I’ll just know that they will not last long. And in the case of Crazy Horse I am again proven right.
So then, is it possible to increase chances of success? Absolutely! This reminds me of a question one of my mentors asked me…
“Sant, if you are in a “life and death” situation to sell as many burgers as possible (if you succeed your company can live on another day, if you fail, your company must close down), what is the ONE most important thing that you would want to have?
- Crowd pulling advertisements
- A persuasive, marketing & trained sales team
- Mastering the use of 101 closing techniques
- An irresistible discount offer
- High traffic location
- Fantastic customer service
- Strong referral program
- etc…
(Think about this. What would your answer be?)
A few important strategies came to mind. But he saw my expression and reminded me…
“If you can only have one thing. What would it be?”
I remembered thinking there are so many different strategies and so many factors to consider, selecting just one would be really tough. Before I could give him my answer, he told me the answer:
“A starving crowd!”
And it hit me like a ton of bricks! That is absolutely right! It is so simple and it is so utterly and completely true! And this truth is so simplistic that most people just missed it, like I did. This is probably the most important marketing tip I’ve ever received.
So what has selling burgers got to do with Crazy Horse’s closing? Here’s what:
When going into a business, most people think about the many different strategies. The retail mantra: location, location, location; the marketing strategy; the budget; the decor and renovation; the promotions, etc. But a lot of times they just miss the biggest thing: the starving crowd. Is there a starving crowd for this business?
Just take a look at some of your neighborhood malls. You may observe that some of them seem to keep changing hands. Here’s the typical scenario:
1. The inspired entrepreneurs wannabe go to some Asian countries like Thailand, Vietnam, [any other place you can think of] or source over the Internet;
2. They see beautiful, cheap, unique things that they think can be sold locally;
3. Enthusiastically, they get a shop/pushcart at their nearby mall;
4. They renovate and decorate the shop (usually with borrowed money);
5. They import the goods and finally open the shop;
6. Only to find, there is no starving crowd buying their stuff. The rent is killing them and ultimately they bail out.
Crazy Horse, believe it or not, is the same story as any of the above. It is just done with BIGGER budget, BIGGER location, BIGGER everything. Here’s the familiar scenario again:
1. The Powers that Be go to France or Las Vegas;
2. They see beautiful, unique Crazy Horse performance and think the concept can be sold locally;
3. Enthusiastically they get a big venue (a building) at Clarke Quay;
4. They renovate and decorate the building;
5. They import the concept, the dancers, etc;
6. Only to find, there is no starving crowd watching the girls strut their stuff. The rent is killing them and ultimately they bail out.
The missing critical component: The starving crowd
If there are much MUCH more tourists in Singapore, maybe it might work. If it had opened in one of the Integrated Resorts (which are targeted to be up by 2009 and supposed to bring in millions of tourists) it would have worked, because there will be a starving crowd. But Singaporeans will not frequent such place, especially with such expensive pricing—tickets are a minimum of S$85 and go to as high as S$250 per person. They might go there once for the experience and never come back again.
However, after the organizers announced its imminent closing, it is experiencing full-house shows. People are going for the ‘once for the experience’ experience. These people are not the starving crowd.
Any business, from big, medium, small to start ups, will lower their risks tremendously and increase their success by first ensuring that there is a starving crowd.
Along the same vein, there’s currently this novelty theme restaurant that just opened a few months back called Aurum by The Clinic. It has opened in the same area where Crazy Horse used to be and its claim to fame?
True to its theme of giving diners the ‘clinical’ dining experience, the restaurant serves food in surgical trays. You enter through a ‘morgue’, sit on golden wheelchairs, sip drinks from test tubes, infusion drip packets and syringes, and dine from kidney dishes and surgical trays. And the price is targeted at the higher end of the market. Any starving crowd (in Singapore) will probably lose its appetite.
However, if the food is really great, then there might be some redemptive qualities that would perpetuate its survival. If that’s the case, it would probably tone down its theme to focus on its food.
Another redeeming factor is that it is a bar-restaurant-disco. Bar and disco people love radical themes. It might get enough starving crowd from the night scene to compensate. It will need to play out. But for it to survive and prosper, it will need to change to accept what the local starving crowd wants and give it to them.
[…] of big companies continue to commit such sins. I’ve written on this in previous articles (eg. the Starving Crowd […]
Dear Sant,
I’ve read your article and I agree with your views that the presence of a “starving crowd” is indeed important for any business.
I am currently managing a start-up that is probably similar to the “aspiring entrepreneur wannabe”, but we sell garment necessities that everyone would want to wear/use everyday. e.g. underwear, towels, socks, etc. I have very strong supplier/sourcing support and the prices that I offer should be attractive to locals.
However, I found that there was no “starving crowd” after I opened shop. Sure, there were those that came back time after time to buy from us, but the exposure of the shop was probably to little since the location was not prime. Or is it just another excuse I am making? Or maybe the product mix and low prices don’t really create “starving crowds”? Maybe you could shed a little light on this.
Thank you in advance.
Warmest Regards,
Daniel
Hi Daniel,
Your description is pretty brief and vague, so my suggestions will be generic in nature. I’m assuming that you are doing B to C retails instead of B to B wholesaling. There are a couple of things you need to check:
1. Is your prices really attractive IN COMPARISON to what is available out there / what your competitor is offering?
2. Which segment of the market is your garments aimed at? If you’re targeting the lower end (with lower quality products), even if you lower your prices compared to your competitors, it might not make a huge impact in sales. But if your products are of high quality and are aimed at the higher-end market, then by offering lower prices than usual, you will attract good loyal clients who will help spread the word.
3. If your products are of high quality and target the higher-end market, but you still don’t get enough crowds, then it’s probably because you don’t market yourself enough. That’s why you haven’t reach your critical mass yet. Especially for non-prime locations, you must do more marketing to attract people and make it a unique destination where we people are willing to go to look for great things. To do that you must be more radical to grab people’s attention. Think about how you can get favourable media attention. You need to get your brand in people’s minds.