Get your pub Ontrack

Marketing consultancy him! has spent most of the past year gathering the views of 5,000 pub customers. The results show exactly how pubs can improve their bottom line

In 2007, retail consultancy him! launched a syndicated customer tracking programme for the on-trade called Ontrack. In May and June the 2008 study was completed and 5,000 pub/bar customers have been interviewed around the UK and across many of our leading retailers.

Face-to-face interviews were

carried out at pubs, both on entry and exit, to capture customer expectations.

Firstly, some context — 14% of adults, when interviewed in an economic survey in March, said they were planning to cut back their spend in pubs (think how the economic climate has deteriorated further still since March), and many (44% of women, for example) said they had no intention of visiting a pub in the next 12 months.

The on-trade needs to become relevant to today's customers and potential customers, in the same way forecourt shops have changed from "fags and fan-belt kiosks" to successful and profitable retail outlets, selling anything from core snacking products to ready meals and over-the-counter pharmacy products.They have also become service hubs (you can pay your bills there, withdraw cash, top up your mobile phone etc). Would you have believed you would be able to buy a Marks & Spencer ready meal on a forecourt today if you were asked three years ago?

Tom Fender, managing director at him!, feels the ontrade has an opportunity to embrace customer insights better: "Just the other day, InBev's managing director Stuart MacFarlane wrote in The Grocer that he intends to move his company's mindset from that of a traditional brewer to that of a modern fast-moving consumer goods (FMCG) company — that breweries have not historically behaved like FMCG companies." Customer insights should lie at the heart of FMCG strategy and this in turn must drive customer solutions that lead to increased sales.

So, adopting a retailer/customer-thinking mindset, here are some findings from 2008 Ontrack to

show exactly how to improve your

bottom line.

Getting customers to spend more

Customers spend about an

hour and a half in the pub each visit — that's an increase from 2007. So the trade is keeping customers in pubs longer this year (or alternatively, they have lost customers who previously spent just a short amount of time

in pubs).

Most retailers would be delighted to have their customers on their premises for 90 minutes. Are pubs doing all they can to maximise sales while those customers are there? (Do pub staff know they only have

90 minutes?)

Pub customers are still consuming fewer drinks overall than they intended to — three drinks per trip was the intention, 2.9 drinks were actually consumed on average.

And customers spent 20p less than intended.

These figures, 0.1 drinks and 20p per customer, may not sound much, but round it up across

the whole industry multiplied by 365 days.

Spend on food slips by about 6% on intentions.

Those who recognised they spent less than they had intended to spend said, "it was cheaper than I expected" (an opportunity to play with the margin mix?),

or that they didn't buy food when they were going to (in other words lost sales).

Unsurprisingly, 74% of customers arrived intending

to buy beer or cider — but only 71% did. Brewers are losing beer and cider sales through the on-trade. Beer sales should be 4% higher just to meet current customer intentions.

Understanding pub customers

Do you believe pubs are all about the young, free and single customers? A majority (60%) are aged over 35. A fifth are over 55 years of age. Despite current economic conditions, today's over 50-year-olds have never been so wealthy, healthy, technology savvy, and time rich. Are pubs seeing the opportunity here by actively targeting "the grey pound"? Only 38% of pub customers are single — most have a partner.

The most common party composition in a pub is a couple, not a group of guys nor a mixed group of friends. Are pubs creating an intimate environment? Creating a great atmosphere is the second priority for pub customers.

Only 8% of pub customers are with work colleagues. When you learn that 70% of pub customers work full time, do you feel that pubs aren't engaging with local businesses sufficiently well enough, whether it be for a business meeting or an after-work drink with colleagues?

Are pubs as keen to get your company's business in the same way that banks, media companies and cleaning companies want your business?

Most customers have come from their home, most are heading straight home afterwards. How can pubs snap consumers out of their routine? Email local businesses at 3pm to offer a deal or incentive to come to the pub on their way home

at 5.30pm.

Of current pub customers, 30% have children. Many potential customers are parents. Your pub could compete with the local coffee shop, by converting a meeting room into a comfortable and secure kiddie-friendly family zone with a good range of hot drinks (80%-plus margin), soft drinks (50%-plus margin), muffins/croissants (60%-plus margin), magazines and newspapers (25% margin).

There are a number of important considerations for parents to think about when considering where to take their children for food.

Children's play areas, healthy food options, sufficient space and, crucially, the attitude of staff (the latter was four times more important to parents than baby-changing facilities) top that list.

When it comes to smoking, 40% of pub customers like to light up — no change year on year, proving that the on-trade has successfully held on to its smoking customers.

Only three quarters of smokers planned to smoke while they were at the pub; 77% of pubs we visited still sold cigarettes, but only 7% of smokers bought cigarettes from the pub — 12% claimed not to know that the pub sold tobacco.

And yes, only a very small minority of customers said pubs had become worse places to visit since the introduction of the smoking ban.

What's important to them?

When asked why customers had chosen the pub they were in, customers' first over-riding reason was location. Very few mentioned any other "retail appeals" — ie, only 8% said good service. Location (and convenience) is important — but all retail businesses need more than location. The on-trade needs to build brand strength of its own — not rely on brands it sells alone.

Those who use pubs generally say they receive good service — customer satisfaction ratings are quite high. Even value-for-money ratings remain healthy (8/10). Therefore the challenge is to encourage them to visit more often, and get those who are not going to pubs back into them.

Helping customers make decisions

As they enter the pub, 20% of customers don't know what type of drink they will have. Even of those who know the type of drink they want, 12% don't know what brand they will have. Only 55% of pubs had drink promotional messages. A third of pubs did not have any wine list or information on tables to help influence customers' initial buying behaviour; 92% of customers said pub staff did not try to offer a promotion or upsell products. These are missed opportunities.

It seems that pubs need to adopt a more retail-type approach.

A third of food customers know exactly what they are going to eat before they arrive at the pub; two thirds don't, and will refer to the menu. Menus, therefore, are extremely important marketing materials. Is the language, content and copy appropriate for the customers a pub is attracting? What about sponsorship opportunities? Customer satisfaction ratings for food are good, except for the range of healthy options. When selecting from the menu, 48% say local sourcing is important to them. Local doesn't necessarily have to mean from within 15 miles — often it means regionality. When deciding what to pick from the menu, 80% say portion sizes are an importa