In the nightclub, bar and restaurant industry, there is no greater authority than Jon Taffer, host and co-executive producer of Spike TV’s Bar Rescue. With three decades of experience, Taffer is a two-time winner of the Bar Operator of the Year award, is credited for inventing the concept for NFL Sunday Ticket, and has been behind innovative bar practices such as the “butt funnel,” a narrow entry to a dance area intended to increase customer interaction.
Now Taffer is tackling his greatest challenge — attempting to completely revolutionize the bar industry. His plan? Putting the power of his decades of management experience in the palm of every bar owner’s hand in the form of his new free Android app, Jon Taffer’s The Bar HQ. Jon took some time from his crazy Bar Rescue schedule to tell us why many bars fail, why the good ones succeed, how technology is destroying the bar business, and why technology can save it.
There’s nothing worse than trying to get a bartender’s attention when they’re on the phone, or being told to order through an iPad instead of a person. Can technology actually improve bars?
As the president of the Nightclub and Bar meeting group, I communicate with about 125,000 bars. About 80% of independent bars in America don’t even have POS systems. They operate their business by the seat of their pants. These guys are not software accounting systems oriented.
This is my effort to change the industry.
I wanted to create an app that would change the bar industry. About a year-and-a half ago, I started designing it. I spent about $700,000 on it, a lot of money. I partnered up — believe it or not — I went to Anheuser-Busch, and said, “Guys I want to create an application that’s going to change the industry, and I want it to be completely free.” They said, “If you’re really going to change the industry and you’re ready do it for free, then we will partner up with you as a sponsor.”
This app does everything. It tracks sales by the minute, has over 100 promotions in it. You sign up for the app, and then all of your employees then sign up for the app for free, putting the unique ID code of your bar. Now all of you, and your employees are in your own universe. All of your employees put in their social media coordinates when they sign up, and all of it is kept confidential.
It’s called Taffer’s Bar HQ. The app has a sales tracker that tells you guest sales per hour in real time, as well as a promotion generator. You push a button on your smartphone and a hundred promotions are listed. You pick the promotion you want, let’s say a ladies night promotion. You pick the date it starts, the date it ends.You pick the beer or spirit you’re going to promote, and when you’re done, you hit a button. It creates a flyer, sends it to your mailbox, puts it on your social-media pages, and pushes it through to every employees social media page in about four seconds. It has complete promotion and selection design — it completes social-media management, completes sales tracking and trends.
Scheduling in bars is a pain in the ass, now all of it is done through the phone. You’re an employee, want a day off? Send it through the app on your phone. If you’re sick and need to switch shifts, you send a message within the app. If I need an extra person, I just simply send a broadcast to all my employees’ phones, “Who wants the shift?” Somebody grabs it, the schedule is changed.
Jon doesn’t think all technology is bad.
And last but not least, every month I provide five pieces of training content through the app. Up-selling, cross-selling, whisky knowledge, beer knowledge. If the owner likes it, they can push it through to all the employees to watch the video. All of the Taffer training is done through the app as well, for absolutely free.
It sounds like one of those addictive game apps, but it actually educates and informs instead of just wasting your time.
It keeps you in touch with your business. I’m really excited about it. There’s nothing like it in the world. There’s a desktop version, however, it’s really designed to be with you in your pocket. If your sales trends go down, a push notification comes up on your phone and say you lost 10% of your guests Monday night. And there’s a picture of me stating, “You lost 10% of your guest counts Monday night, these are the tactics and steps you need to change it.” I am coaching them, guiding them, working with them so it’s something you would want to keep in your pocket so we can communicate during the course of the day.
What do you think the next big bar craze is going to be?
Technology has really been invading bar space lately. We now have iPads that the servers take orders from. You put your order in on your phone, and GPS locates you at your table and your server brings the drink. Technology is destroying the bar business. What makes bars work is not food and beverage, but interaction.
Technology is destroying the bar business.
The biggest trends that we’re going to see in the next five years — this is my word — is the “technifiation” of bars. We’re going to start to see that guests are not ordering themselves, they want the servers to do it. We’re going to start to see more human interaction come back, and we’re going to start to see how bars get more relationship driven, and less transactionally driven.
On Bar Rescue you use new technology all the time, what’s the difference?
I love that tech, I just don’t like tech to get between the human being and the customer. Tech to track inventory, manage music, schedules, are wonderful because what they’re supposed to do is free up management to spend more time in the front of the house. I’m not anti-technology, I’m anti-technology that wedges itself between the server, bartender, and guest.
What are your favorite types of tech you’ve implemented in bars recently?
The urinal game that we used recently at Jack’s Ale House is pretty freakin’ cool. It’s not just fun and games; this urinal saves 50,000 gallons of water a year. That’s embracing solutions!
I used to have a lot of fun in bathrooms. I was a consultant to a theme park company, and every once in a while, I’d put an urinal in the ladies’ room. I’d mount it on the wall so when ladies walked in, they’d freeze for a second and think they were in the wrong bathroom. I’d mount a wooden sign on top of the urinal that would say, “Caution, do not flush while seated.” Women would come out of the ladies’ room with a smile on their face. I realized, “Wow, I can make people smile in the bathroom. How cool is that?” That little game that you pee into the urinal and get points is really fun, and it creates an experience where one would never think that an experience could be created. I love that kind of technology.
I’ve been on this quest to make people smile everywhere—including the bathroom.
Also, a tad bit about me that nobody knows: I had the only patent ever issued by the federal government for music management to achieve and design an ambiance in a hospitality property. I’m a nutcase. I had energy-coded, categorized, and otherwise segmented 72,000 songs in a database. Every single one is colored coded by energy level, by key, by beats per minute, and beats per minute curves—and content curves, and left turns, and what I call a ‘weave music program.’ All of this is really really important to bars. When it comes to the technology, delivering music and the science of music—I’m really supportive of it, it’s transaction technology that worries me.
That makes sense. You’re going to love this story about bathrooms. It was my wife’s idea when her father and uncle first opened their bar in Upstate New York—that instead of putting little symbols on the doors for men or ladies—they’d do the chromosomes. A double X for female, and then have a XY for male. It’s so funny to watch people go up to the bathroom—not remember basic high school biology—and not know what door to go into. It actually sparks a lot of conversation because people standing by the doors start the conversation, “Oh you’re new here, go in this one. You’re an XX.” They also print out and post funny jokes in each bathroom. Most people come out of the bathroom laughing.
He made his bathrooms fun. That’s great. Too many bars don’t think that way. My corporate slogan is “Make ‘em smile. You make ‘em smile everywhere.” They should smile when they walk in the front door—and yes, they should smile when they walk out of the bathroom too.
Most owners you work with on Bar Rescue have no prior bar or restaurant experience. What’s the worst mistake new bar owners make?
A bar owner can have a drink or two in a bar when he works at night, but the bar owner cannot be a drinker, per se, and own a bar successfully. It’s a tough business. It’s a business of products that need to be controlled by the second. It’s a cash business — you can be robbed to death. The expenses are exceptionally high. I drink very little. If I have twenty cocktails a year, it’s a lot for me. Alcohol is for selling, it’s not for consuming. If I was a pharmacist, it wouldn’t be a good idea to be into drugs either.
“You’re never going to be a good businessman while you’re drunk,” says Taffer.
The public thinks that the bar is just inherently profitable. Bullshit. It’s not. A bar profit is 10% to 12% if it does a great job. A couple of mistakes and it’s in the red. You’ve got to be a good businessman, not a good drinker, to be in the bar business. And you’re never going to be a good businessman while you’re drunk.
What drink provides the highest profit margin for a bar?
Bottled beer runs about a 25% cost, so if the bottle costs about 80 cents, they’re going to sell it for four times the cost in a bar. Draft beer runs about a 22% cost, a little less than bottled beer. Spirits-based cocktails can run 14% to 17% cost. When you put the two together, the most profitable thing in a bar are spirits. Quote, period, hands down, mixed cocktails.
That vodka cocktail can have half the cost of a bottle of beer in some cases but twice the price.
The most profitable mixed cocktail tends to be made with vodka, which is the least expensive spirit. You take the glass of vodka bar vodka, put some tonic in it, throw a lime on top, that drink is going to cost you 40 or 50 cents. A bottle of beer conversely costs 80 cents for the bar. That vodka cocktail can have half the cost of a bottle of beer in some cases but twice the price. There, you have the bar business.
What about for food?
Food varies. The most profitable food item that you’ll find in a bar is almost always pizza. Even a large pizza with meat toppings on it will cost under two dollars. Imagine you’re paying $16 for pizza and out of the $16 pizza, they’re making $14. Pizza is the most profitable food product in America. So you want to open the most profitable bar in the world? Only serve pizza and vodka cocktails.
What drives you to want to revolutionize the bar industry? Why are you doing this?
I don’t think anyone’s ever asked me this before. The fact of the matter is I have money, I really don’t like traveling 35 weeks a year, I miss my wife, I miss my dogs, I miss my home. I have a tour bus sitting at home that I spent a fortune on that I haven’t seen in a year. Why? The fact of the matter is I really get the opportunity to change lives. You guys see it on TV, but there’s nothing like feeling it. Last week when I walked out of that firehouse, and looked back at what I had done for Josh and his three brothers, was — I cannot tell you how remarkable that feels. I have some gift that I have this ability to talk to people and help them. I have this ability to get them to open up to me and really transform people. I want to do the same for the people that are watching.