We are doing well.
We've purposely and strategically cut our hours about every eighteen months (on average) and in turn our revenues have increased and our overall overhead has decreased. It all comes down to how you are building your business in terms of positioning, internal marketing, dynamic innovation, etc.
Last year we were 8a-8p Mon-Sat... until July and we changed to 8a-6p. Now comparing 2010 to 2011 through the first week of June, we are several thousand less tickets and several thousand more dollars.
At first glance one might think that increased prices may account for the difference... but not so, this is a greater number of customers, spending more per ticket in 600 less hours of operation.
Now you can't do this overnight, but this strategy has always proven effective if you have the following elements in place.
1) Known and proven market leader in terms of quality - In order to effectively call yourself a specialty shop (if you do), you actually need to be special. Higher quality product, limited product (seasonal, fresh made, etc.) You need to continuously innovate and lead rather than follow. You should price yourself higher than everyone else in the market, yet still be seen as a value. In real terms, you just can't say you're the best in your market, you need to BE the best in your market. Customers will know if you are what you are communicating, and it will damage you severely if you are not.
2) Understands internal marketing - Ambiance, choice of menu items, choice of music, choice of ceramic, pricing, etc. all need to effectively communicate who you are and in the end, the product needs to confirm it. For a small business such as ours, internal (and WOM) are far more effective than external marketing. Use it well!
3) Understands and implements positioning - Be the leader in your category. If not... create a new category by virtue of dynamic innovation and lead that.
4) Word of Mouth promotes and elevates due to the above three. - This is rather self explanatory, but by creating a substantial value proposition for the customer, you will create an environment which fosters great WOM marketing. It's about setting high expectations and creating an experience that exceeds those expectations.
By limiting hours it creates more demand. If you are available all hours to all people, then you are communicating that you're really not that special. Your customers should want to go out of their way to come to your shop, or they should feel a sense of urgency to come before you close.
Always set your closing hours when you are still busy... leave 'em wanting more.
In the end, it's less electricity being consumed, less wear and tear on your body, less labor cost, etc.
Understand how to create the best set of customers by creating a business that only your ideal customers will come to. This is a win-win for everyone.
