Severnson building business 'one customer at a time'
Editor's note: This is the third in a series of Montana Tavern Times features on progressive Billings licensees who are showing substantial sales growth in this economic downturn. Read on to discover ways these owners are achieving success.
Craig Severson - Pepper's Bar and Grill and Treasure Creek Casino
Severson is one of those progressive licensees who refuses to participate in the recession. His business last year was up 30 percent over the year before. The first quarter of the year set new records.
He says he builds his business one day at a time, one customer at a time.
"If I can get each customer to visit one additional time per month, I'm up 10 percent; if I can get them to buy one more beer per visit, I'm up 25 percent—one more visit, one more hour, one more beer," Severson says. It's all about getting them in the "joint" and keeping them there, keeping them entertained.
"I'm anti discount," he says. "It defeats the purpose" of being in business. "Price is not the driving factor whether someone is going to your place or someone else's. If you run a crap bar, no low price will fill your place; if you run a great bar, people will pay top price. Do you really want the discount shoppers anyway?"
He has also embraced the latest in video amusement devices. He's running the Silver Streak Bowling, The Golden Tee Golf and the Big Buck Hunter consoles.
"These new amusement devices help us achieve our goals," Severson states.
He points out there are several advantages to the new games versus traditional pool or darts.
First, these new devices earn income per player rather than per game played. Four customers can play one game of pool, but with these, each player pays. And he says pool is a relatively slow game, unless you have the space for several tables.
Peppers did have a pool table but it was taken out in favor of more seating and equally amusing, better earning games with much smaller space requirements.
"The spend-per-customer is three or four times greater than pool," Severson says.
Peppers has now begun to establish league and tournament play on the games, with the winner earning a weekend at Chico Hot Springs.
But he points out, "The owner must be invested in the tournaments and leagues. Don't expect your vendor to do all the work or pay the cost. If you've got an investment in it, you'll work it. Your vendor can maybe help with some point-of-sale marketing, maybe provide a trophy, but you have to do the organizational work yourself and you should furnish the grand prize.
"A bar owner should actively recruit the best players, build a good team, build pride in your bar.
"These things will build traffic and make you money. But the most important thing is it keeps people in your place. It's a tool to make money with."
Severson is operating an ATM, a digital juke box, a bar-top trivia game and his other amusement devices via high-speed broadband. Some of the units are set up for wireless play. Regardless, it is important to sort out your high-speed communications links now because this new age has arrived.
Tim Carson, president of Amusement Services which vends the devices, says that "connectivity" is what is driving video amusement to "a new level."
"The devices have come so far in terms of animation, speed, graphics and accuracy," Carson says. "They are close to simulating the real thing (golf, bowling, shooting). It makes them that much more appealing."
But amusement devices are just one aspect of what is driving Peppers to record revenues month after month. Severson, too, believes in promoting on-premise events.
Recently he purchased a pay-per-view package for the no-holds-barred Ultimate Fighting Championships (UFC). The event lasted three-and-a-half hours and cost $1,500 but penciled out in the black, even though Severson decided against charging a cover.
"Or, if I charge a cover, I might give them a $7 drink coupon. That way, they've bought their first two drinks before they even come through the door," Severson says.
He's also a believer in "four walls marketing." That is, he promotes heavily within his business with posters but mostly talking up coming events to customers and depending on them to do the word-of-mouth advertising.
"When I bought the place, I spent $120,000 on advertising the first year," Severson says. Last year (his fourth at this location) I spent $3,000." He does a little print and even less broadcast.
He also embraces modern communications methods to spread the word. He promotes his events on a web-site and does an "e-mail blast" to over 200 customers and friends to promote lunch specials, his 4 p.m. happy hour and so on, and does the same thing with his cell phone's text messaging power.
"Here's the bottom line as I see it," says Severson: "Times are hard and are going to get harder. We've got to get back into the bar business. We've got to go back to work now. The gaming machines won't support you. You've got to promote; you've got to motivate your staff.
"Some places are going to be fading away. Those who survive are going to be the ones who are creative and really work at it. You've got to make something out of every opportunity. You don't need to run big promos. Just find a reason to have a party. But the promotion and its presentation are important.
"And you've got to be known for something; find or create your niche...as long as you're known for something."
Peppers runs a Halloween party, Wednesday night is "kill the keg night," they have a St. Patrick's Day bash in June (and raise the price of Jameson's), a Cinco de Mayo party (and raise the price of Corona), celebrity bar tender night (call and ask him about this one!) and plenty more.
"You've just got to create energy," Severson says. "When customers come in here, they maybe don't know what's going to happen, but they know something is going to happen."
"But you can't live on promotions alone," Severson notes. "Promotions are there to keep interest high. But you need to run a clean business, build personal relationships with customers...know your customers."
As for the Oct. 1 smoking ban, Pepper's has long had an outdoor deck that will be improved to enhance comfort in inclement weather.
And Severson feels the change to smoke-free will bother older customers most. "The younger ones aren't really a problem; they grew up smoking outside. I think we'll see the hit in the casino that may last three years. It will affect seat-time for smokers. But there will be more people quitting so it will be less of an issue all the time
"My response is to really get the bar rolling; go back to work and back to fundamentals. It's a different market with a new clientele, a more demanding customer who wants more than cold beer so clean your place up, hire attractive, friendly help.
"The way I see it, we're privileged to have a customer. We need to show them more appreciation. Run the place for your customers, not for yourself. If a customer is happy, they'll advertise for you (and you know what they'll do if they're unhappy).
"Ask them: 'What is the one thing you really like about my establishment?; what is the one thing we can improve?'...then do it!"
"The bar business has changed. I start at 6 a.m. and work seven days a week. I'm going to fight for my customers; give them a reason to come here first. These times are going to separate the men from the boys. Be ready to fight, fight, fight.
"I'm going to compete my ass off; it will be friendly but I intend to win."
Source: The Montana Tavern Times, May 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte MT. 59701