Float Centers in Hip Neighborhoods – DSP 199

Do float centers in the hip part of town do better than ones on the outskirts? Graham and Ashkahn are well versed on this in that Float On is in a fairly hip part of Portland.

The guys break down some of the benefits of being one of the “cool” businesses in town as well as some of the serious drawbacks. Naturally, things like foot traffic aren’t as important. Almost no one walks into a float center and hops in a tank off the street. So there are fringe benefits to it, like awareness, but if you decide on going to a different part of town, then you’re not automatically doing a disservice to your brand.

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Transcription of this episode… (in case you prefer reading)

Ashkahn: Hey, everybody. Welcome.

Graham: I am Graham.

Ashkahn: And I am Ashkahn. And this is the Daily Solutions Podcast. Every day, we take a question from the people who’ve submitted.

Graham: And usually, Graham reads it.

Ashkahn: We answer it, if this is the first episode you happen to be listening to.

Graham: No one asked, “What do you do for a podcast?”

Ashkahn: Another episode.

Graham: We’re answering that one-

Ashkahn: ‘Cause we do it every day.

Graham: It’s part of the Daily Solutions Podcast. Alright, so today’s question is, “considering the wide demographic in floaters, does it matter where in my city I’m located? The existing center in town is in the center of the hippest areas.”

Ashkahn: Whoa.

Graham: The hippest areas?

Ashkahn: Yeah, they just like-

Graham: You know something? I was just talking to Derek and he said that we should make fun of the people who submit questions less. I realized that it’s true. I’m very tempted after I read a question to start picking it apart.

Ashkahn: “What kind of idiot sent this thing to me?”

Graham: But we don’t, we love you people who send in questions.

Ashkahn: Yeah. We love the questions. We just like grammar, and…

Graham: I thought you were gonna say Graham. No, so keep sending in questions. I will definitely not-

Ashkahn: No this is good.

Graham: -make fun of them.

Ashkahn: This is a good question. This is good.

Graham: This is a wonderful question.

Ashkahn: Yeah.

Graham: That’s why I did it.

Ashkahn: Sent in probably by a wonderful person.

Graham: The bad questions, you don’t even hear. Man, some of the shit that people send in, though.

Alright, so demographics, does it matter where in the city they’re located? Existing center’s in the center of the hippest areas.

Ashkahn: Okay. So, a location question. So, basically-

Graham: A very adequate categorization there, Ashkahn.

Ashkahn: So, float tank centers are interesting because you’re not a business that relies on foot traffic really, as much as a lot of other storefronts do.

Graham: Even though it’s cool.

Ashkahn: Even though it’s cool, if you were a restaurant or a clothing store, those are the type of places that I think depend a lot on being in an area where people will walk by and be like, “Oh, we should go in this restaurant”, or, “Look at this, clothes in this window!” So, we’re in a pretty foot-traffic-y, hip kind of storefront area ourselves. And still, despite that, the number of people who are wandering off the street and trying to book appointments is not that many. It’s nice ’cause people walk by and they get brochures and you can sit in our lobby and you can listen to people walk by. And one out of 10 people, the Float On derails their conversation and they start talking about floating as they walk by our place.

Graham: And if you’re down the street, too. If I’m at the sandwich shop, one block down, the amount of people wandering by who are still talking about floating after walking by the shop is really cool.

Ashkahn: So, it’s almost like a point of advertising or something like that. You’re almost like a billboard for yourself on a storefront. And that doesn’t exactly lead to people literally wandering in and spending money with you right away like it would for, I think, a restaurant or a clothing store or an antique shop, or those other kind of walk-by retail places.

Graham: I mean, restaurants are kind of interesting too. For a busy restaurant that actually books out, it’s very similar to us. A restaurant is kind of a destination location. There’s a maximum number of people that can go into it.

Ashkahn: There’s a mix of it. The thing with restaurants is people always are eating around other activities. So if you’re going to do something, you’re like, “Oh, we should grab dinner nearby.”

Graham: Not like an hour and a half float.

Ashkahn: Exactly. Floating is the destination. You’d go to float, and you’d grab dinner nearby the float, ’cause the float is the activity that you’re going to do. All of this is to say we have the benefit, as being a float center, of being a little bit more off the beaten path, and not having to worry quite as much about being on that really storefront, foot-traffic-y sort of area.

Graham: Yeah, I would almost say there’s two really big benefits that come from being in central, hip areas. Maybe three. Maybe four.

Ashkahn: Location, location, location.

Graham: I was gonna put a fourth location in there and just call it good, you know? So, one of them is just what you said. Your shop is a billboard. Getting a monthly billboard might be a couple thousand dollars per month. If you’re paying $1,000 extra in rent to be where you are, then you’re getting a cheap billboard. If you’re paying $3,000 extra in rent and billboards are $2,000, maybe you go with more out-of-the-way location and literally get a billboard. So, that causes conversation, right? So, there’s that aspect. It is just when there’s more foot traffic going by you, it looks good to the outside world and conversations get started.

And looking good, I guess, was the second one I wanted to mention. Which is, if you’re in the basement of some building on the outskirts of town, people realize you’re in the basement of some building on the outskirts of town. And if you’re in a hip district, people realize that, too. And there is something that reflects on your brand about being in a cool area and being in a public place, and just occupying that space that people associate with coolness.

Ashkahn: Yeah, people say that all the time about where our shop is. They’re like, “Oh, this totally fits into this street.” It kind of complements the neighborhood that it’s in.

Graham: And so, the third one is just population density, that I was gonna toss out there.

Ashkahn: Before that, one more thing on the second one is that, I feel like there’s a lessening impact on the idea of building credibility for your float center by being in a legit retail street. When we opened, there were so few float centers around…

Graham: Most of them were in people’s apartments.

Ashkahn: Most of them were in people’s apartments.

Graham: -or on the outskirts of town, in some basement.

Ashkahn: And so, there was just something about us having an actual storefront on a real busy retail street that immediately gave the business credibility. When you’re like, “Oh, our business is on this street,” people are like, “Oh, that sounds like a real business.” And that was really useful for us, I think, in the day. And I think it still can be useful. Floating is still a weird thing, but over time, as people learn about it more and there are more float centers, that’s gonna become less of a benefit. But that is definitely still a part of it, right? We’re still offering a kind of weird, relatively unknown, semi-strange service, and you just get some inherent credibility by being a business on a known business street.

Graham: Yeah. And again, that’s not a small one in my mind, that is a nice advantage of it. And so, yeah, population density, like I was going to say, is the third main benefit that I see. In all of our analysis of different float centers’ marketing and consulting and stuff that we do, it really does seem that one of the biggest things that can contribute to you filling up your tanks more than half-capacity or something is just being in an area that has a lot of people. Not even a huge city, just a relatively dense center, or a place where a lot of people are living around.

So, if you are in the center of these kind of hip areas inside a city, it probably means there’s a lot of people that live around there in condos and different high-rises or at least a good amount of apartments, and things like that. As opposed to, the more rural you get or into suburbia, just the more things are stand-alone single houses, less population density, which obviously just means less people who can come in to float who live within a couple miles of your center. And that’s a really big one.

Ashkahn: Yeah, it seems like the distance from someone’s house to a float center is one of the biggest contributing factors to what float center they float at.

Graham: Yeah, and if you do an analysis of our customers and just look at the different zip codes going around, the amount that they’re centered right around the shop just is degrading by radius of how many people come in to float.

Ashkahn: I mean, it makes sense, right? You’re trying to relax, you don’t want to have to drive all the way across town. The idea of floating and then being able to be home in a short drive and keep chilling out is an appealing one, and it can be kind of a deterrent to have to drive a great distance. We hear that all the time from people who open float centers. One of the most common stories I hear is someone got really into floating where the closest float center was 50 miles away from them, and it was so annoying that it inspired them to open a float center in their own town. So, it’s clearly a factor.

Graham: So, I have two downsides, as well. Do you have any more big upsides to being in a hip area besides those ones?

Ashkahn: You get to meet hip people. It is cool. Being in a cool neighborhood, the other businesses around you are often doing cool things and you get to form cool business partnerships, and things like that. We’ve had some fun with just literally having businesses down the street from us or cool restaurants close by to us that it all feeds into itself a little bit.

Graham: Yeah. That is actually very true. Yeah, cool alliances you get to make when everyone else around you is also cool.

Ashkahn: Mm-hmm.

Graham: Yeah. Upsides, any other?

Ashkahn: And you get to work in a cool area.

Graham: Okay, but the downsides that I have are: one, rent, it’s more expensive.

Ashkahn: Sure.

Graham: It just costs more to be in those up-and-coming areas, or especially ones that are already established. You’re gonna be paying a good amount more in rent to move into what’s currently the hip area.

Ashkahn: It’ll make you question how much space you want much more. And it’ll probably make you compromise on space, and you’ll probably have to constantly be dealing with not having enough space.

Graham: And then you’ll, a little bit, hate your decision. So, that’s a big one. Cost is a huge one. And then noise, I was gonna say, is the other really big one, for soundproofing. And it just means, if you move into the center of an area that’s bustling and noisy and crowded, you will have to invest more money into your soundproofing.

Ashkahn: Yeah. There’s just more people, there’s bigger and more cars, there’s public transportation.

Graham: That’s a huge one, yeah.

Ashkahn: There might be rail lines, or subways, there’s often multi-story buildings that you’re gonna have to either be in the first or second floor of, and deal with that.

Graham: A lot more construction, too. There’s more buildings around, there’s more big buildings being constructed and buildings being torn down. And that can contribute to a lot of noise when you’re in these. Again, especially up-and-coming hip areas, where if they’re up-and-coming, it means there’s a lot of old buildings that are gonna be demolished and new, noisy construction going up.

Ashkahn: It just means, think about that in terms of your construction costs. You’re most likely gonna have to invest more money in soundproofing, if you’re in the middle of a hustle-bustle area.

Graham: So, no, you can definitely succeed away from the center of a cool area, especially if you’re not in a hip area, but it’s still relatively populated. That might be something that I look for. If you are moving into a hip area as well, or considering spaces there, looking for something just a little off the beaten path or maybe a little towards the edge of it, where there’s likely to not be as much public transit, not quite as much fear of construction.

Ashkahn: Yeah, it’s off the main strip by a block or something, is a place I see float centers.

Graham: Yeah, but then you lose that billboard side of it, for advertising, people walking by. So, all of it’s kind of a trade-off.

Ashkahn: It’s kind of the nice thing about float centers. You could succeed in either of these settings. If you were telling me you were trying open a boutique clothing store way off the beaten path with no businesses around, you’ve gotta be like, “That’s probably a bad idea. You shouldn’t do that.” But most of your customers are finding you online, or hearing about you from a friend and calling.

Graham: And even if they do find out about you through walking into your store, they often just pick up a brochure and leave, and then go online and read more. They’re not walking in and immediately floating.

Ashkahn: I know. My gut feeling is that 90 percent of our customers walk into our store for the first time when they’re there for their appointment.

Graham: Oh, probably.

Ashkahn: Probably more than that.

Graham: Over that. And again, of the people who that’s not their first time in our store and they wandered in before, almost zero percent are wandering in and then floating right then, right?

Ashkahn: Yeah. That’s very rare. So, there’s benefits to both sides, and the nice thing is you could make either one work. I guess parking is another benefit of being away from the strip. When you’re doing something as long as floating, it’s very nice to have parking spots available, and it’s way easier outside of a crazy part of town.

Graham: And then, on the flip side, public transit is usually easier to get to those places. So, if you’re more isolated, then it might just be harder for a certain set of clients who don’t have cars to make it out to you.

Ashkahn: Yeah, I guess it depends on your city and how big public transportation is, and all that. But you should know that.

Graham: Yeah, and the question really was, ‘can I succeed outside of a hip area?’ And the answer is totally yes. Hopefully, we just weighed some pros and “Kahns”, some “Kahns” for you? Woo-hoo-hoo! Having fun today!

Ashkahn: I guess the other thing to consider in all this is where the other float centers are in town. It’s not something I think you should ignore. There’s often a benefit to trying to balance out the city in terms of where you’re opening a float center. So, that, I would say, is probably a big variable. If you look at the city you’re trying to open in, and you see where the existing float centers are, try to find an area that seems like it’s far away, or it’s not serviced well by those other people. I’d say that’s probably gonna do better than moving in two blocks away in that hip area down the street from where there’s already a float center.

Graham: Yeah, for sure. Again, usually the biggest competitor you have, I usually say, is lack of awareness. But when you’re moving into a district that a float center is already centered at, and you’re moving into the epicenter of that, it means they’ve already probably built awareness around that two-mile radius or so pretty well. So, just in your own interest of having isolated customers who, all of a sudden, if you move in really close to someone, you might have competition. People might be deciding whether or not to go to their float center or your float center. And if you’re even three miles away, all of a sudden, it’s like people who were on the closer side of that three miles have a big incentive to go to you instead of them. So there’s this nice balancing act.

I’ll just say it again: lack of competition that comes with spreading yourselves out a little bit.

Ashkahn: Getting crazy today.

Graham: Woo! So, I got a big mug of coffee today instead of a small mug. Good episode, good episode.

Ashkahn: In conclusion, if you don’t go to the hip neighborhood, you’re not a hip person, and you should feel bad.

Graham: Doesn’t sound like anything we’ve said before. Probably the worst conclusion that I’ve ever heard in my life.

Ashkahn: Alright, if you guys have other questions you wanna ask us, you can go to floattanksolutions.com/podcast.

Graham: And we will absolutely not make fun of them.

Ashkahn: Definitely not. Thank you for sending, everyone.

Graham: Thank you everyone. Thank you who did it today, for sending questions, too.

Ashkahn: It’s very nice.

Graham: Bye everyone.

Ashkahn: Bye.

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