This story is a tough one to write, but one that can be a great lesson for those in the restaurant industry. It’s about a Houston restaurant that for 27 years served the best, authentic South Louisiana food, created memories for notable guests such as Anna Nicole Smith and her then billionaire husband, Olympian Carl Lewis, many of the Houston Rockets, Astros and Texans, national politicians, film entertainers, and me.
July of last year, The Magnolia Bar & Grill closed its doors.
Sure lots of wonderful eating establishments come and go, but this one was special. The Magnolia Bar & Grill was where my marketing career began. I was a bit younger, 22 years old to be exact, and learning the ropes of the marketing world. I had the fortune of being a hungry marketing professional while they were in need of help with marketing their restaurant. The restaurant was brand new and I was happy to barter my marketing skills in exchange for delicious food. And so the beginning of a great opportunity and relationship was born.
The restaurant did not close because of a weak brand, nor was it a business failure. The restaurant was a tremendous financial success and the brand will live on for years to come. Jody, Jimmy and their devoted team earned their place in the minds of the market by consistently delivering a fun experience, mouth-watering food and solid service; this brand, I know, will not be forgotten by both the customers or the media. They earned endless accolades in the national, regional and local press including: “Best Restaurants in America” in GQ Magazine. They were featured in The New York Times, USA Today and numerous In-flight magazines, and were regularly awarded for best brunch, best seafood and best outdoor dinning in local publications.
The Magnolia Bar & Grill closed because the location and surrounding neighborhood significantly changed. These shifts did not support the brand product, its pricing and the target audience. Their lease was up and it was no longer a good business decision to continue operation.
The restaurant business is one of the toughest industries to succeed in. Margins are slim, customers are fickle, competition never stops, and bad weather can waste thousands of dollars in perishable food inventory without notice.
So how did the Magnolia Bar & Grill prosper for nearly three decades, live through a few serious recessions, a fire, a roof caving in after a rainstorm, a Gulf Coast cholera scare in seafood, and at least three hurricanes?
They built the business, and their restaurant brand with these five important strategies that you too should consider following:
1) They leveraged publicity, and word of mouth referral while limiting paid advertising. From the early days when I had an active role in the marketing of the restaurant to this past year, resources were allocated to support channels of influence by what others said, not in paid advertising. This meant if there was $2,000 to spend, it would be resourced to fund a media event, a customer new menu/tasting party or to stay active with the concierge’s association. Paid advertising was very limited. Third-party endorsements were key.
2) They recognized that discounting can be a kiss of death. Even in the toughest economic recessions, there are negative brand associations with certain discounting practices. Buy one, get one free, may bring in traffic spike, but, it’s not the customer you may necessarily want. The Magnolia believed there were better ways to appreciate and give value to a customer, other than to de-value their product and brand.
3) They gave back and often. From the End of Hunger Network, to cultural arts organizations and hundreds of other nonprofits, The Magnolia Bar & Grill gave food, time and support year after year, even in the early days when they were not profitable. This goes back to my 1st point, in leveraging your publicity and word of mouth.
4) They embraced and practiced the principle that great brands are built on experiences, not a single menu or product item. The Magnolia Bar & Grill had kick-butt gumbo and the best crab fingers around, but the leadership and team knew they were selling something much bigger, an experience, a memory and a great time. Equal focus and investment was applied to all touch points, the music, the staff training, the menu, the lighting, parking and Website.
5) They knew when to hold’em and when to fold’em. As difficult as it was closing this institution down, The Magnolia Bar & Grill had lived its course. They have so much to be proud of and had contributed significantly to the local economy and community for 27 years. As a business, leadership should never lose sight of the balance and math of the operation, the costs verses profits, and market changes versus brand image and critical momentum.
Will the equity of the Magnolia Bar & Grill brand re-sprout somewhere in the future? It’s hard to say. Jody Larriviere and Jimmy Gossen also successfully own and operate Louisiana Fine Foods, a wholesale seafood company, and Jimmy G’s, a casual seafood restaurant by the George Bush Intercontinental Airport in North Houston. I will keep you posted, but hope you can learn from their branding choices in order to make smart branding decisions for your restaurant.
Karen Post is a internationally recognized branding expert. For over 30 years, she has worked with businesses, trade organizations and professionals to help them create or improve their brands. Her experience spans diverse industries and includes working extensively with independent restaurants, national restaurant chains, chefs, caterers and food suppliers.
Post has appeared in international media outlets including: Bloomberg radio and TV, CBS’s The Early show, National Public Radio, The New York Times, New York Post, Financial Times, Entrepreneur Magazine and Success Magazine. She has also a regular contributor to FOX TV in the Florida Market and
Karen is the author of two published books, Brand Turnaround (McGraw-Hill 2011) and Brain Tattoos: Creating Unique Brands That Stick in Your Customers’ Minds (AMACOM 2004) and is active blogger on business and marketing matters.