A celebrity appearance can transform an ordinary business into the hottest shop in town. But if a restaurant or bar owner isn’t willing to wait around for an A-lister to wander into their establishment, they’d better be ready to dish out the big bucks--sometimes as much as half a million for an appearance.
At an upcoming appearance at a mall in Dubai, Kim Kardashian will reportedly command $500,000. Outrageous? Not really, says Mike Esterman, a Hollywood, Calif.-based agent to agent to the stars.
“Celebrities seem to set the tone and pace of new product development and what’s hot,” says Esterman. “Open any tabloid magazine and you’ll see pictures of who is eating what and who is dining where.”
A celebrity appearance can put a small business owner’s restaurant on the same level as a fancy restaurant with a celebrity chef, says Esterman.
“Their place can have as much visibility and have as much cache as a place that would cost 10 times as much for dinner,” says Esterman. “Celebrity appearances can level the playing field.”
Of course not all celebrity appearances carry Kardashian’s high price tag. Rates vary depending on the star power of the celebrity and what part of the world the celebrity is appearing in. Typically, celebrities with a decent amount of name recognition command anywhere from $20,000 to $1 million for one appearance, according to Esterman.
Whether a small business owner has made the decision to buy a celebrity appearance or just hoping for the random, unplanned visit, the product needs to live up to the hype, says Joel Cohen, founder and CEO of RestaurantMarketing.com.
“The bottom line is that it adds some glitz and some hipness to the restaurant, but any spike in customer traffic is not going to last long,” Cohen warns. “There’s a big difference between ‘buzz’ and ‘word of mouth.’ Buzz will only benefit you for the short term, but if you have a good product that celebrities are consistently enjoying, then that leads to word of mouth.”
At Gibsons Bar and Steakhouse in Chicago where dinner for two runs around $200, spokesperson Roxanne Atkins says the restaurant feeds at least one celebrity a week—and the celebrities pay them—not the other way around.
“I’ll be honest, I think the celebrity factor is a perk, but it’s not like we have hundreds of people calling to make reservations as soon as Johnny Depp eats here,” says Atkins. “Our real business that keeps us alive comes from the locals that have been eating with us for the last 22 years.”
Atkins says she has not observed a change in business following a publicized celebrity sighting. However, she says the restaurant sees a lot of tourists during the summer season, and it’s possible they come after reading about Gibsons in a magazine or tabloid as a star hangout.
Atkins stresses that even though having celebrities on site is thrilling, it’s also a challenge when it comes to privacy.
“We won’t allow the press in if we know a celebrity is dining with us,” she says. “Our waiters and maître ‘d will form a human wall in front of people before we let anyone hassle them. But you always have to be on the lookout.”
Adam Hanft, marketing expert and CEO of Hanft Projects, says that celebrity sightings may actually do more for small businesses.
“Think about when Obama went to Five Guys Burgers and Fries,” says Hanft. “When there is some extraordinary juxtaposition between the fame of the individual and the schlockiness of the establishment, it can really put a place on the map. The media love that.”
At the end of the day, it’s how the business manages the celebrity appearance that’s most important, says Hanft. Businesses must continue to work to build buzz and legitimize the brand so it appears as if the celebrity was pointing to a discovery that other people will also find valuable.
“Look at [New York-based bake shop] Magnolia Bakery,” says Hanft. “They had all the sightings and buzz around ‘Sex and the City’, but they didn’t let it die when the series was cancelled. They took on the culture and the resolve, and really legitimized their brand.”
Social media is a great tool for getting the word out when an A-lister stops by, Hanft says. Business owners must be ready to upload celebrity encounters to Twitter and Facebook, as well as on sites like CitySearch and Yelp.
“The Internet can help to keep things alive, but there has to be the perfect alignment between venue and celebrity,” says Hanft. “If you have a hot club and Britney Spears is there, that’s great. If Dick Cheney is there, then it actually may be bad for business, but most business owners would say that any celebrity is good celebrity.”
One business owner who recently felt a real boost from a star encounter is Paul Kolaj, co-founder and CEO of Famous Famiglia Pizza in New York City. After a surprise visit in May from Donald Trump and Sara Palin (who opted for cheese and pepperoni), Kolaj says sales have been up.
“We felt a benefit to the bottom line, and we got some great photos,” Kolaj says. “We also got a real boost that can’t be measured, and that’s the morale boost to the employees and the excitement in the restaurant. It’s been a positive impact all around, and we’re honored they came.”