The Lexus people get a good marketing bang for the bucks they're spending in Memphis. They get to park a brand-new Lexus in the front of the restaurant, to change all the signage, and to plaster "Lexus Lounge" logos on staff uniforms and on menus. More importantly, they get up-close-and-personal exposure to people with enough discretionary income to buy their pricey cars.
"With the Lexus Lounge we hope to offer premium seat holders an experience during a Grizzlies game, concert or event that identifies with the Lexus standard of excellence in customer satisfaction," says Lexus of Memphis owner Stefan Smith. "We will bring a small part of what Lexus of Memphis has to offer into FedEx Forum to engage the citizens of Memphis and our current and future customers."
What gave Lexus of Memphis the idea? In part, it's because they know of the payback Lexus of Atlanta has gotten for the naming rights deal it cut at Atlanta's Turner Field, home of the Atlanta Braves. But there it's a Lexus Level of the ballpark; the 8,000-sq. ft. Braves Chop House restaurant wasn't part of the agreement.
How much did Lexus of Memphis pay for naming the restaurant? No dollar figures were given out for the Lexus Lounge naming rights deal. But let's put on our thinking caps and dream a little bit, shall we?
Don't bother dreaming the impossible dream. You're not going to get deals like the ones they give out for major league sports, where the average annual naming rights agreement brings in $3.1 million per year. Companies that spend at this level are unlikely to be interested in buying naming rights to a mere restaurant.
But why not dream the achievable dream? Think about the companies who spend big bucks to secure the naming rights to minor league facilities. The average naming rights fee for minor league stadium deals is approximately $280,000 per year. There are more than 100 such deals in place, and they involve minor league baseball, minor league hockey (and, yes, junior hockey), minor league soccer, even three for minor league tennis. When companies are concerned with boosting brand recognition and having close ties to someplace cool where they can entertain clients, doesn't the town's hippest restaurant or its most-happening sports bar seem like a better place to invest marketing dollars than the town's minor league tennis courts?
To be sure, you'd have to work your way through a lot of "What If" situations before cutting your naming rights deal. Would you want to sell naming rights to your entire restaurant or to just part of it? Or maybe to just your bar? How long? How much? It's virgin territory, but we know now that the next naming rights deal to a restaurant won't be the first. And we're betting this first one in Memphis won't be the last.