(Note: This story appears in the July 2022 issue of ED Magazine)
The President, CEO and Chairman of RCI Holdings will offer his unique industry perspectives and prognostications on Tuesday, August 16.
It’s no small feat to get 20 or 30 minutes of Eric Langan’s time. Langan, as many know, is President, CEO and Chairman of RCI Holdings, the company that owns and operates the Rick’s Cabaret club chain and the Bombshells restaurant chain. As such, on any given day you could find him in New York, or Texas, or Florida, or Colorado, or … just about anywhere. If he’s not in the middle of a club acquisition or visiting an existing club or restaurant, he’s speaking to investors (RCI is the only publicly-traded club chain and is listed on NASDAQ under the symbol RICK).
But at EXPO 2022, attendees will have the rare opportunity to have 30 minutes with Eric Langan, as this industry heavyweight will provide the convention’s Keynote Address on Tuesday, August 16, from 12:30-1 pm.
“For the past three decades, the EXPO has showcased the industry’s most prominent figures as Keynote Speakers,” says ED’s Publisher, Dave Manack. “Whether it was Harry Mohney, Michael J. Peter, John Gray, Jim St. John, or even a well- known single-unit owner like Joe Redner (Mons Venus), we enjoy hearing their unique perspectives and prognostications for the industry at large. With so many people approaching Eric over the years at EXPO with specific questions, we thought this was a great opportunity for him to address some of those questions during our EXPO 2022 Keynote Address.”
ED Publications recently spoke to Langan and asked him to address some of the subjects that he will discuss in greater detail at this year’s EXPO in Las Vegas.
ED: As a forerunner in this industry, RCI is setting trends and doing things that other people aren’t doing. What does Eric Langan think the future of the industry is?
LANGAN: We need to move away from what I call the ‘traditional strip club.’ If we continue to do the same thing we’ve always done, we will become our fathers’ and grandfathers’ generation of business. Look at what happened to the Playboy empire, which was based on the magazine. Playboy was once the definition of cool. Now, forget about
it. So, we have to adapt. We have to change. And the chief focus has to be on attracting this new 25-to-35-year-old crowd who’s starting to make lots of money.
ED: How would you characterize this new generation of customer, this blend of Gen Z and Millennials?
LANGAN: They live a completely different life than we do. When they go out, they want to be seen. They want to ‘flex’ as they say. They want a table by the stage or in the middle of the room. They want everybody to see that. They want everybody to wish they were them. They’re going out to party. They want to have the time of their life. The rest of the time they’re working. And they work hard, but their work is often misunderstood. People say, ‘Oh, they’re just on their computers, in their chat rooms, trading high-dollar commodities.” But they are intensely focusing, creating things like blockchain utility. And you have to understand their personality. They’re big on decentralization, and they’re big on influencers. They don’t get their information from reading traditional newspapers, watching traditional TV, or listening to traditional radio. They are on Twitter, Instagram, and TikTok. So when they go out, not only do they want to be seen and heard doing it, but they also want their followers on social media to see them having a great time and partying. Those are the kind of things our current industry hasn’t been set up for. As a result, we are alienating a very large demographic that is our next generation of customers.
ED: If somebody wants to be the center of attention, it can be a bit complicated in a club with a darkened ambiance, which seems to purposely promote anonymity.
LANGAN: That’s the old strip club model. You’re not going to continue to operate forever as a traditional strip club. I’ll give credit where credit is due; the first person who saw this trend coming was Dennis DeGori when he opened E11EVEN. He became a true nightclub with DJs and everything, and then added in strippers. At RCI, our approach is we’re still a strip club, but we’re bringing in the nightclub. We’re turning our strip clubs into nightclubs. We’re not trying to build a nightclub and make it a strip club.
“(Millennials) live a completely different life than we do. When they go out, they want to be seen. They want to ‘flex’ as they say. They want a table by the stage or in the middle of the room. They want everybody to see that. They want everybody to wish they were them. They’re going out to party. They want to have the time of their life.” — Langan
ED: Meaning, it’s the ‘nightclub energy’ you’re trying to tap into?
LANGAN: In markets where we compete with popular nightclubs, we have to compete on a different level. We bring in the nightclub music, the lights, the sound equipment, all the works. It creates a nightclub feel. It becomes a fun party place, especially for younger men who want to flex and be seen. There are big VIP booths right around the stages. If you want to be seen in there, you’re going to be seen in there. If you buy bottles, 10 waitresses with sparklers and bottle service march and dance their way to your table. Very nightclub-scene type stuff.
ED: Does this ‘nightclub’ approach change your clientele in any way?
LANGAN: It’s increased the number of young men and women coming to the clubs as guests. So, we’ve expanded our customer base as well with this 25- or 35-year-old crowd. It’s not like the 45-year-old crowd. You ask a 45-year-old whether he wants to bring his wife to the strip club, and he looks at me like you’re freaking crazy. But you ask a 25-year- old guy if his girlfriend wants to come to the strip club, and he goes, ‘She drags me there.’
ED: What do you think are some of the keys to reaching this demographic from a promotion and marketing standpoint?
LANGAN: In addition to changing your approach to your club, you need to hire somebody who knows social media. You’ve gotta get into social media. I don’t know if you have to get into Web3 (Ed’s note: incorporating blockchain technology in everyday internet uses). I don’t know if you have to jump in as deep as we are. We’ll see how it goes. But for this new demographic, social media is the key to reaching them.
ED: Despite all of the tech available at the fingertips of the youngest customer demographic, nothing on the internet or even in the ‘metaverse’ can ever replace live human interaction.
LANGAN: Most people don’t get it. They think we’re in the sex business, but what we do has nothing to do with sex. It’s got to do with human interaction, and you can’t replace that with the internet. I can’t touch you on the Internet. I can’t engage any of my other senses. All I have is verbal and sight. And with so much catfishing, I don’t even know if it’s really you, I don’t know who I’m really talking to. And even if I can hear and see you visually, the brain does not process two-dimensional senses the same as it does with three dimensions. That’s why, at least in the near future, there is nothing that exists that can replace the human-to- human interaction that happens in our clubs every day. And that’s another major selling point to the new generation. You can’t get out and be seen and party on your phone or your computer. But you can do it in our clubs.
ED: Some clubs have offered food, but I’ve also heard over the years that food is a loss leader (Ed’s note: loss leader is selling a product/service that isn’t profitable in the hopes of attracting a customer base). Is that because clubs just aren’t set up to be successful selling food, or are they just not doing it right?
LANGAN: Depending on your market and your customer base, food can be very important. You don’t want individual or groups of customers to leave your club, get something to eat, and not come back. I think we as an industry know the club business, but we don’t know the restaurant business. In our clubs, where we weren’t making money on food, we got rid of our kitchens. We DoorDash it. I don’t need to lose money to try to keep customers in my business when they can have any food they want.
ED: Many clubs do have kitchens and/or sell food in some fashion. What advice can you offer to those clubs who are hoping to do better numbers on their food offerings?
LANGAN: If you decide to offer food, you have to know what you are doing. Our Bombshells division has absolutely nothing to do with our Nightclubs, but it serves as a good example. When we started it in 2013, I thought our club people could run Bombshells. Within 90 days, we had to make some immediate changes. I was fortunate enough to find David Simmons (RCI Director of Operations for the restaurant division). He was extremely experienced in the restaurant industry. He came in and made Bombshells the success it is. Since then, we’ve followed that formula. As a result, our club related restaurants, like Rick’s Steakhouse in Rick’s Cabaret New York City and the new Rick’s Steakhouse in Scarlett’s Cabaret Miami, all make money for us.