Gumbo, small business, profit tips

This story is a tough one to write. It’s about a Houston restaurant that for 27 years served up the best, authentic South Louisiana food, created memories for such notable guests 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.

Last week, The Magnolia Bar & Grill closed its doors.
Sure lots of great eating establishments come and go, but this one was special. The Magnolia Bar & Grill was where my marketing career started. I was a bit younger, 22 years old to be exact, and certainly learning the ropes of business. The owners of the Magnolia Bar & Grill Jody Larriviere, Jimmy Gossen and the Landry brothers had just opened the doors for business. I was there one night having dinner and met Jody, the managing partner. He explained that they were a brand new restaurant and needed some help with marketing. The rest is history as The Magnolia Bar & Grill was my first client as a marketing professional (back then the word branding was not even a business term) and it was the beginning of my journey as an entrepreneur.

Our relationship started as a food for service swap or barter. They had limited cash in the beginning and I needed to eat. Prior to taking them on as a client in 1982, I was earning not much more than minimum wage. So the great Cajun grub was a big bonus. It was also an awakening for my taste buds with my introduction to cayenne pepper, a staple in Louisiana food.

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.

Jody, Jimmy and the dedicated team (From Tommy, the waiters and waitresses, busboys, kitchen staff and bartenders) they earned this place in the minds of the market by consistently delivering a fun experience, mouth-watering food and solid service, this brand customers and the media will not forget. They also 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 regularly were awarded for best brunch, best seafood and best outdoor dinning in local publications.

Magnolia Bar & GrillThe Magnolia Bar & Grill closed because the location and surrounding environment significantly changed. These shifts did not support the brand product, its pricing and the target audience. Their lease was up and it no longer was a good business decision to continue operations.

Restaurant business is one of the toughest industries to succeed in. Margins are slim, customers 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 falling in after a rainstorm, a Gulf Coast cholera scare in seafood and a least three hurricanes?

They built the business, and their restaurant brand with these five important strategies.

  1. They leveraged publicity, word of mouth referral and limited 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 profound negative brand associations with certain discounting practices. Buy one, get one free, may bring in traffic spike, but, its not the customer they wanted. The Magnolia believed there were better ways to appreciate and give value to a customer.
  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.
  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 loose sight of the balance and math of the operation, the costs verses profits and market changes verses 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 whole seafood company and Jimmy G’s, a casual seafood restaurant by George Bush Intercontinental Airport in North Houston. I will keep you posted.