Taste London: Jamie Milner and Matthew Turner
The Taste London founders on generating £2m profit in just three years with their diner discounts idea
On average, the British public eat out at least twice a week and the recession has done little to damage the frequency of restaurant dining. What it has done however, is create a boom in the diner discount industry. Websites such as Toptable and the raft of discount voucher services have profited from the consumer’s appetite for a good deal. One of the most successful ventures in the sector is undoubtedly Taste London, the ‘pay to save’ service which provides customers with a discount card offering up to 50% off in more than 15,000 outlets in return for an annual fee.
Unlike Toptable, the restaurants don’t pay to be part of the network, they simply offer Taste London customers a discount. The idea, adapted by founders Jamie Milner and Matthew Turner from American company Entertainment Book, has been phonemically successful. Launched in 2006, the company is on course to turnover £3m this year and £2m of that will be profit.
“It’s traditional advertising turned on its head,” explains Jamie. “Rather than the restaurants paying to advertise, we charge the consumer which gives us leverage to demand heavy discounts from the restaurants.”
Taste London currently has 100,000 members thanks, in no small part, to lucrative media partnerships with The Metro and Time Out. “We only work with media partners now,” says Jamie. “We don’t pay for advertising in the traditional sense, we work with media partners to leverage their affinity with readers. They get an exclusive offer for their readers as well as payment on the redemptions they achieve. In turn we build our member base – it really does work immensely well for all parties involved.”
Jamie says the involvement with the Metro, which happened about six months after launch, was Taste London’s breakthrough moment. Getting restaurants on board was initially a big struggle. The venture launched with 100 outlets – the result of several months of hammering phones from Jamie and Matthew’s Huddersfield base. “It was a new concept for London so it was hard at first, but as we’ve got bigger more restaurants have come on board and it’s easier to sign them up. Now we’re at the stage where restaurants approach us on a daily basis.”
Leap of faith
Jamie believes his, and partner Matthew’s previous experience combined, created the perfect foundation for Taste London’s success. Matthew had run a bar and restaurant while Jamie was a sales director for a database marketing company in Leeds. “I’d always said I’d start a business before I was 30,” says Jamie. “Our two skillsets were perfect but even though we thought it was a winner, it was still a massive gamble to give up a secure job with a great wage. I had a mortgage, children and a wife and we couldn’t pay ourselves for the first 18 months of trading.”
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Jamie and Matthew put together a three year business plan which clearly set out their revenue strategy. First they’d tap the consumer market and then move on to corporate sales, which now provide a quarter of total revenue. With the help of the government’s former Small Firms Loan Guarantee scheme they secured bank funding from the very first pitch as well as grant from Yorkshire Forward. Jamie attributes the funding success to their ‘sensible’ business plan which showed them losing money for the first 18 months.
The plan now is to double revenue year-on-year while expanding coverage outside of London. “There’s a Taste London restaurant on every corner in London and we want to replicate that nationally over the next two years,” says Jamie. The pair are also investigating the possibility of franchising the concept overseas. Jamie is loath to consider diversification of the concept however. “We could start other lifestyle offers, and on the face of it it’s better for members, but from a marketing perspective it dilutes and takes credibility away from the brand. We’re a diner’s club and that’s the way we want to keep it.”