Booz&Co. Strategy+Business provided a set of downturn toolkits (distributed by e-mail but available online at the Booz&Co. website) to their subscribers over the weekend and for purchasing professionals Booz&Co. had packaged an leaflet-like memo to the CPOs along with a free digital download of their recent book Sourcing Reloaded: Targeting Procurement’s New Strategic Agenda. Good stuff for anyone willing to get some external input into their current struggles.
On the other end – the smaller scale if you will – let me share the recent downturn and spend management development of Lux Stockholm, one of only 14 restaurants in Sweden with Michelin stars. Lux Stockholm is just a stone’s throw away from both my apartment and office (midway to be precise) located on the diminutive Lilla Essingen in Stockholm. Now, Lux Stockholm isn’t exactly cheap – and the Michelin star does somehow explain that one shouldn’t expect it to be. As one of the leading restaurants in Scandinavia one might also suspect that they don’t cut back on spend much even in the face of recession.
So deem my surprise that as I rode my Pinarello up the street I passed a photocopied A4 poster taped to the garage elevator door (punk-rock-stylee) advertising Lux Stockholm’s waterfront grill patio. Now some might think this is below par what might be expected out of advertising from a restaurant whose dishes start at €20 and go up, but I beg to differ.
Lux Stockholm has just taken Booz&Co advise for CPOs just a tad bit further (though I suspect that the staff at Lux Stockholm have no clue about even the existance of Booz&Co. or any of their insights). Number one on the Booz&Co. CPO memo list is: Aggressively negotiate lower pricing and improved terms in nonstrategic spend categories.
Let’s break this down:
- Aggressively negotiate lower pricing – using the company photocopier for advertising is as close to free as you’re going to get, so it’s aggressive alright. Taping the ads to public buildings using staff (I suspect, some of them live in the neighborhood) is probably the cheapest distribution method available. One out of three.
- and improved terms – talk about print on demand. The distribution is also taken care of. Two out of three.
- in nonstrategic spend categories – one can argue about the strategic nature of advertising, but since Lux Stockholm already received their star in Guide Michelin, most of the strategic advertising and brand awareness could be seen as taken care of. Strategic spend categories for Lux Stockholm is with high probability food related and by cutting down on the costs of nonstrategic categories the staff probably still use the best sources available. Three out of three.
Posting flyers on lampposts and in public places might not be what is expected from luxury restaurants but from a spend management point of view it’s spot on.
