Technology and marketing expert Anthony Contreras, founder of i2i Marketing, says local Austin businesses experiencing higher rents, and other costs associated with their business properties need not worry. He recently revealed how local businesses can use low-risk, high-ROI (return on investment) strategies to retain customers and increase sales in the face of higher taxes and potentially devastating rent increases.
“Let’s face it. The population surge here in Austin is a boom for local businesses,” says Contreras. “But there are side effects too: traffic issues, higher taxes and, as we saw in the case of long-standing local business Amy’s Ice Cream, out-of-control rents forcing relocation outside of the city limits. For local businesses trying to thrive in the heart of town, this is becoming a grave concern.” He further continued, “Austin’s merchants need to be focused on running their businesses and helping their customers. But that’s becoming a more and more difficult task as the threatening trend of unsustainable rents looms large overhead.”
The south Austin location of Amy’s Ice Cream closed October 25th but research shows a number of other long-standing Austin businesses have been affected by higher rents as well. Red 7 and Holy Mountain, two well known downtown Austin hot spots recently experienced large rent increases forcing their closure. Online source listings priced the Holy Mountain property at $8,000 per month – a 45% increase to base rent. Red 7 experienced a similar increase, (55% jump in base rent). These figures do not include taxes, insurance or maintenance. Salvage Vanguard Theater, founded in 1994, was forced to close because of a renewal rate almost 400% higher than the current rent.
“Enduring a jump in rent like that is unacceptable, but it’s the reality. It shouldn’t seal your fate though,” says Contreras. “Low risk, high return strategies and technologies can easily differentiate your brand, manage your most valuable prospects free of competitor meddling, and help ratchet up ROI results. It’s important to look at all possibilities to minimize the impact higher rents can have on your bottom line going forward. That means thinking differently about how to run a profitable business. The first step is differentiating your brand.”
Shawn Porat, CEO of Fortune Cookie Advertising often speaks about the importance of differentiating your brand. He recently wrote, “The most successful brands are experts at differentiating themselves.”
Many corporations use brand and differentiation as a marketing strategy. Steve Jobs and Apple, George Zimmer of Men’s Warehouse, and Richard Branson, founder of the Virgin Group, use “celebrity as leader” branding. This is a strategy largely successful because customers prefer to connect with a person instead of a name or logo. But not all companies need to create celebrity-driven differentiation. Wal-Mart’s branding strategy involves price. IBM and Tupperware create differentiation by other means.
“But it’s a different story when it comes to Virgin and Sir Richard Branson,” says Contreras.
“The problem is most local businesses don’t have the money or wherewithal the likes of Apple or Virgin Airlines to implement celebrity-based competitive differentiation into their business model. Yet today, more then ever, advancing one’s local celebrity is not only affordable and easy to do, it’s an absolute necessity if their local business is to survive,” says Contreras. He further continued, “In high competitive business environments, with higher taxes, and out of control rents, it’s not a question of if but when to start driving competitive differentiation into your brand. And the first step toward that is creating local celebrity.”
Contreras notes not to confuse celebrity driven brand with flying a hot air balloon around the world like Richard Branson. And he cautions, “Creating celebrity driven differentiation is only the first step. Other steps need taken too. Most Austin business experts agree that Amy’s Ice Cream created at least some form of celebrity driven brand, yet were still forced to move the south Austin location.”
Business owners operating in high rent areas who want to learn how to utilize low-risk, high-return strategies to combat the rising costs of doing business should visit Myi2iStrategy.com and request a copy of Contreras’ report, “The Single Greatest Technology Trend in 2016 To Align Your Business With for Brand Differentiation and Unstoppable New Customer Flow.”