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Marketing success with the Rule of 95/5

By Nick Shanagher

Rao’s is a New York restaurant open since 1896 where you only get to eat if you are invited by a regular – think Woody Allen, Robert De Niro or Al Pacino!

Will Guidara, the author of Unreasonable Hospitality and former owner of Eleven Madison Park, says it took him years to wangle an invitation. What made it special was there were no menus.

“Instead, a guy called Nicky the Vest pulled a barstool up to our table and told us our options. It was a conversation – or felt like one, though you somehow always ended up eating what Nicky thought you should eat.”

My friend Pete once took me to a restaurant in the hills above Lucca, where he lived at the time, and we left our beaten-up car next to a collection of expensive motors parked in a field and walked up a steep hill into a small hut. We all ate the same food.

These remarkable experiences lie at the heart of great marketing, Guidara argues in his book that explains how Eleven Madison Park rose to become the world’s number one restaurant.

The key is his Rule of 95/5. Manage 95 per cent of your business down to the penny; spend the last 5 per cent ‘foolishly’.

He learned the Rule working for Danny Meyer when, aged 24, he took over running the cafes at the Museum of Modern Art in New York. After a year, he decided to launch a gelato cart in the Sculpture garden, and he wanted it to be perfect. He negotiated a low price on top-quality gelato from Jon Snyder, who uncovered a company in Italy making tiny blue spoons.

“How amazing could a plastic spoon possibly be? You’re going to have to trust me on this: they were paddle-shaped, extraordinarily well-designed and completely unique. They were also preposterously, heartbreakingly expensive,” writes Guidara.

Nothing else would do. Guidara’s boss narrowed her eyes when she saw the spoons, asking how much they cost. We will see about this, she said. But when the numbers came in at the end of the month, the bottom line showed the investment worked.

The Rule of 95/5 became one of his central operating principles. One he believes all businesses can learn from.

Take, for example, the calamari at Ruth’s Chris Steak House in the Westchester Marriott, a franchise restaurant. You cannot order the calamari. You could only get it if they sent it to you. That calamari was, by definition, priceless. But it was always there – every night – a gift waiting for a customer.

Identify the recurring moments in your business and build a tool kit your team can deploy without too much effort, Guidara advises. In this way, you will develop a reputation that generates repeat custom.

Nick Shanagher | UK Business Advisors (

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