Engaging with brands: “People want the entire experience” says Lizzie Ryan of Imbiba
Written by Tim Maynard
10th May 2019
In the latest of our Value Creation interviews, Stone & River caught up with Lizzie Ryan, Director at Imbiba.
“It’s no longer enough just to have a quality product. People want the entire experience.” Having moved to Imbiba as Director last year, after working in consumer mid-market private equity for the previous five years, Lizzie is clear that the hospitality industry has transformed in recent times, driven by consumer demand.
Consumers now look to build an emotional engagement with a brand, and whether proactive or reactive, Lizzie acknowledges that private equity companies have had to embrace this change, which in turn has provided some clear opportunities for growth.
Having launched in 1997 by ex-operators, Imbiba was one of the first investors to recognise this shift, and with its team comprised half with investor backgrounds and the other with operator backgrounds, as well as an advisory board made up of industry experts such as Karen Jones and Graham Turner, Lizzie sees this as a clear benefit for both the firm and its portfolio.
The team consists of sector experts each with great reputations in the market, across key specialisms including property, marketing, finance and team-building. It’s unquestionably a compelling mix as Lizzie explains: “Our operator-led approach means that we understand what the founders are going through. The operators in the team have lived through it, they appreciate the hard work involved and the nuances of the hospitality industry. As a result we can be much more supportive and empathetic as investors”.
"Our operator-led approach means that we understand what the founders are going through. The operators in the team have lived through it, they appreciate the hard work involved and the nuances of the hospitality industry."
Typically, Imbiba looks at investing in propositions that are under 10 sites. “We are very supportive of management teams and their vision for growth. We do not meddle in the day-to-day operations of a company, although we do provide support and strategic advice, especially around key areas such as property, marketing, finance and infrastructure. However, we are very much backing the management’s growth plan. Overall, it is crucial that you are aligned and incentivised to want the same thing. It’s important that management teams don’t see it as them and us. We want to be seen as one team with a shared vision.”
This enables the team to stay on top of latest trends and in addition to the consumer demand for experience, with Flight Club one proposition Lizzie particularly admires, another area they paying increasing attention to is sustainability and provenance. Lizzie notes that millennials in particular are happy to pay more for premium, organic and responsibly-sourced products, although this premiumisation sometimes comes at the cost of frequency. Shifting to more sustainable products or being more transparent about its provenance can be a useful tool to challenge customer’s price sensitivity.
An ethos at the heart of Imbiba is a close eye on consumers. “Good people and good service are pivotal to looking after your consumers, and most importantly, retaining them”.
Yet customer loyalty in the sector has been transformed by social media, Lizzie argues. While it is a powerful tool for engagement, she points out that it’s critical to know who your customers are and engage with them in the way they want: “It’s a valuable asset if you use it in the right way, but it can also destroy you”. Lizzie adds that with around two-thirds of consumers checking reviews before eating out on a weekly basis, it’s more important than ever to not only have a good reputation online, but also be on the right channels that are suitable for the local area.
Lizzie notes that with the lifecycle of brands now much shorter, companies need to invest and innovate to stay relevant, without forgetting their purpose and who they are. “The chains that are thriving, such as Nando’s and Wagamama, aren’t trying to be anything they’re not,” Lizzie explains. “While they’re innovating around their menu, customers resonate with their clear, concise brand”. Having a clear ‘why’ allows you to renew and refresh your proposition, without confusing your customer.
Lizzie says that while the current climate may be unpredictable, there are other core factors that are still important to never lose sight of. These include: site location, investing in the right team, company infrastructure, maintaining a focused brand and excellent customer service.
One area where Imbiba provides particular guidance to portfolio teams is around exit planning. “It’s one thing that is rarely considered at the outset,” she explains, while the need to invest in infrastructure in order to grow can also seem unnatural to some founders. Imbiba also counsels founders to expanding too quickly. “Many of the businesses in the industry we’ve seen fail in recent times have been due to scaling too quickly”, Lizzie says. “They’re over-rented, expanding to the wrong locations and often the brand direction or message is lost along the way. Site location can make or break a brand”.
Lizzie left us with some key points to consider when growing a company. She emphasised the importance in investing in your management team, being careful not to roll-out the brand too quickly, and never forgetting who your customer is.
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