Reactivating a moth-balled business operation, particularly one as complex as a major club isn’t just as simple as opening the doors and turning on the lights, taps, machines and grills and away you go with “business as usual” (BAU as they say) efficiency and outcomes. Despite the damaged economic conditions, the Federal Government and State Governments have indicated that they will actively stimulate the economy. At this stage and provided the shut- downs doesn’t drive us into a sustained depression, there’s likely to be “pent up demand” amongst our customers.
They’ll be bursting at the seams to get into their pre-Covid activity. They’ll want some light and excitement in their lives; a sense that the war is over and that we can get out again and enjoy ourselves. So be ready for big crowds and some anticipation on what you can offer them to enjoy life again.
Depending on the regulatory jurisdiction, clubs might have to open partially or with social distancing measures in place. Not only that, but it’s likely that some weaker competitors won’t be able to open.
We might find that re-opening a club that’s been in hibernation will be like an athlete going back to the track after some time off with injury. Things will be clunky. Some key staff team members won’t be there to paper-over the deficiencies of new staff. So BAU conditions won’t be what you you’ll get in the immediate post-Covid world.
How do properties balance conditions of large crowds, compromised staff performance and systems that have been moth-balled for a period?
It will certainly depend on your own market conditions but I’m sure some properties will phase in patronage at a managed rate. Here are some of the strategies I would expect early in the re- activation phase:
− Customer prioritisation – Priority to your best customers to re-engage with them. This is difficult. The best operators will be keeping in touch with their customers. Maybe the best customers will be invited to the re-opening events and provided early-access privileges? We’ve seen some properties bonusing customers during the closure period with redemption offers to incentivise visitations when the property re-opens. This could have an unwanted outcome if it isn’t managed well. Bonusing too many with redemption offers might lead to large and unmanageable crowds in the initial days and weeks. It will also impinge cash flows. The strategy could indeed work but just needs to be managed.
− Reduced complexity: I would be surprised if properties open straight away with the highly complex business they closed in March. Menus will be simpler for a period of time. Seating will possibly be reduced (social distancing measures may persist) so seat bookings and line-management (that is, queuing) measures will be crucial. Be prepared for line-ups to get into the car park and then the front door.
− First time back experience: Customers are spoiled for choice. They’ll have lots of options in the immediate post-Covid phase. First “re-impressions” are vital. This is like going into a sudden-death play-off – winner takes all. A bad experience will linger in the minds of customers and great experiences will rust them onto properties that get it right. It’s a challenge and a unique opportunity to impress.
− A chance for a refresh: Now’s the time to spring clean, paint, empty old storage areas and say good-bye to the parts of the business that weren’t working.
− Train the new team: Properties will have a mixture of new and long term team members. Spend some time training the new team. Good training is an investment that always pays off.
− Cleaning and hygiene in the post-Covid world: We are all far more aware of hygiene and cleanliness. Properties that are obviously and overtly clean and hygienic will do better than those that aren’t. I can imagine that great properties will be making short announcements to customers like “please have patience with our team members while they clean our machines in the interests of the health of our valued customers…” Properties may even appoint “hygiene team members” whose sole role it is to ensure public areas are clean and hygienic. The words might even be on their shirts or badges. A brand new hygiene policy might be posted for everyone to see.
Great operators will have plans and contingency plans for the pre and post opening phases. So good planning and clear and consistent communication are vital.
It’s hard for operators to know when to activate parts of a plan. It’s more than likely that government approval to re-open will be given within a week, possibly within a few days, of the date for reactivation. So, plans must be ready to roll and be known by all the management team, team members, directors and others involved in the process.
No doubt, there’ll be pressure in that short time between being given the “OK” and re-opening the doors. Here are some considerations:
− Can our suppliers supply us quickly to enable us to re-open?
− Can we reactivate a workforce, ready to go?
− Do we have the working capital, supplier arrangements or terms and the cash flow to navigate the opening period?
− Does our bank know what we’re doing and that we have a compelling plan? Does our bank support us?
− Will all our equipment and systems work when we need them? There’ll be pressure on 4G networks and broadband infrastructure as the world kicks back in. Will our transactions process? Will our customers have access to cash when they need it? Can the aircon cope? Will our toilets flush? What back-up plans do we have if something doesn’t work?
I’ve heard of some great initiatives that properties are activating to keep in touch and remain relevant to members, staff and suppliers. I was talking with Operations Manager Mick Douros who outlined parts of Hellenic Club’s strategies …
- − They have some highly regarded leased-out food operations. Hellenic set up and promoted the main property in Woden as an order-and-collect drive through quality cuisine outlet. The members are happy, and the lessees are able to keep their businesses operating,
− Hellenic team members are calling members, tapping in to see how they’re coping. They have an older demographic and the connections are hugely appreciated,
− The more vulnerable members, and the Hellenic teams know who they are, are receiving care packages to their door, courtesy of the Club,
− Every staff team member is invited to have a daily drive-through meal for free,
− Hellenic’s Customer Service and Cultural Program for team members continues,
through Team and Zoom, but focusing on personal health and well-being,
− Management teams are conferencing in regularly to run through the plans,
− Parts of the property are being upgraded, cleaned and honed for the reactivation phase.
Technology and systems are vital for the successful operations of properties. We now know, more than ever before, how valuable on-line conferencing is on Zoom, Teams or some other platform.
Real-time collaboration software like Monday, Slack and Asana will be put to great use.
But just making sure that loyalty and POS systems are working, so that the customer experience isn’t compromised, is possibly most important.
The post-post-Covid period (medium and longer term) will be interesting and challenging. We might have to plan for these things, and more:
− Some input prices will vary sometimes daily and by large amounts. Be ready to re-price menus and event packages regularly so that property margins are maintained. What happens if the price of chicken and tomatoes double in price?
− Use the break in operations to get rid of the things or make the changes that you’ve wanted to do for a long time, and that make business sense,
− Be ready for your weaker competitors to make silly decisions. The most dangerous competitor is the one that is almost dead and makes “last-ditched” decisions around strategy and tactics. The race to the bottom on pricing and hand-outs isn’t a race that strong and confident operators enter,
− Some clubs and hotels will unfortunately fail to re-open or fail in the next year or so. You might have a knock on the door from a club seeking your help. The Board might establish policies on what investment opportunities it will examine and how to evaluate these opportunities. It’s sad but some clubs will fold,
− Be ready for higher taxes and don’t be surprised when they happen. It’s likely that GST will go from to 15% and there’ll be a raft of budget repair levies in all sectors. Stress test the business to make sure you can cope with changes and increasing costs