I’ve been working with some of our hotel leader recently on the development of new Food & Beverage concepts and along the way, I’ve coined the 5 C’s of concept development, in particular, as a template for preparing high level pitch documents for a new concept. If you have an idea for a new concept and want to effectively pitch it to your stakeholders, start with the 5 C’s:
1. The Catalyst
Why is the new concept a business priority? What internal or external factors are creating the catalyst for a new concept or approach? This could be declines in revenues and profits of existing offerings, the entry of new competitors into the market or the evolution of customer or guest expectations. It is essential when pitching an idea, to Start with Why and make sure you paint a clear picture of the business imperative.
2. The Customer
Too many hospitality operators, particularly restaurants and bars, try too hard to be something for everyone that they end up becoming nothing to anyone because they deliver a generic, bland and vanilla experience in attempt to offer something that appeals to everyone. When designing a new hospitality concept, it is critical to start by defining who your customer is and then designing every element of the concept & experience with that particular customer in mind.
Doing a deep dive into your existing customers is a place to start. Use as much data as you have available to build a profile of your customers based on their demographics, psychographics, prior behaviors and their feedback data. Identify the particular subset of your current customers that you want to target based on the size of the market, their propensity to be attracted to your concept and based on the customer segment that you feel is most underserved by the market currently. This is where the 3rd C comes in.
3. The Competitors
In any business, there are only really two ways to sustain a competitive advantage. The first is to differentiate yourself in the market, and the second is to compete on price. In a world of identical competitors and the commoditization of many parts of our industry, you need to ensure you differentiate yourself from your competitors to avoid finding yourself in a “race to the bottom” on price. So a critical component of developing a new hospitality concept is to analyse you competitors, with specific consideration to your target customer.
Make sure you look at your direct and in-direct competitors. For example, in the case of developing a new restaurant concept for a hotel, it is natural to focus on neighboring restaurants however; it is equally as important to consider other choices that your target customer has. E.g. restaurant delivery services like Deliveroo or UberEats, the convenience story on the corner that offers a coffee and a muffin for $4.00 or the corporate canteen offering your corporate guests complimentary meals in their office.. Consider all of the options your competitors have & identify the gap or where they are currently underserved – this is where there is opportunity to differentiate.
4. The Concept
So now you have a clear view of the business drivers for a new concept, a good understanding about your target customer and an in depth understanding of the competitive landscape, it is time for the tough (but fun) part – coming up with the concept.
Exploring the creative process of developing a new hospitality concept is a whole other process. I’ll explain my process in a future post..
5. The Commercials
Finally, once you have crafted out the elements of your new concept in detail, the final step is to develop the commercial business case for change. This includes modeling the revenues of the new concept and mapping out the cost base of the new concept in order to develop a profit forecast over a period of 3-5 years. The additional profit generated from the new concept (compared to the profits if you did nothing) then need to be assessed against the investment you are seeking to implement your new concept.
So there you have it - the 5 C’s of pitching a new concept – think of them as the 5 high level stages of preparing to pitch a new concept idea to your stakeholders.