Reverse Cover Charge

Most bars and clubs charge 5, 10, 15, 20 dollars at the door.  A bunch of that goes to the promoter: the person supposedly responsible for bringing the people there. In a live music venue, it goes to the band. Instead of spending money on advertising the dj or the "theme", fire the promoter and tell people to sign up at the website to get paid when they show up. Then, pay $5 to the first 200 people that show up. Net. Net. It is the same cash spent. Or maybe it is even less.

(Further,  if they signup, you can now market to atleast 200 more people.)

Scenario 1: (What happens today.)
Advertising: -$1,000
Promoter gets door.

Scenario 2:
Advertising: $0
$5 for first 200 people: -$1,000
Number of people that spend $5 more dolllars (or more than 5 more) than they normally would at the bar: 200 = +1,000

So, what if a nightclub advertised that they'd pay people that show up?  All these other details are flexible. Firing the promoter may be a bit extreme. Not meant to detract from  the rebate.  The rebate idea is sufficiently interesting to generate a lot of buzz, with our without a promoter.

Anyone want to try it? "We pay you! Fridays"

Comments

[Mark]

Peter,

I've been reading your blog for a while because I'm tangentially in the same industry and some of the things you've written about are, you know, a little off-the-wall. But this is easily the (sorry) dumbest thing you've written.

One of the key to a club's success is its "cache." The whole promoter thing, VIP lists, etc, however ridiculous it is, adds to the feel of exclusvity or just that this is "the place to be."

Paying people to attend simply reeks of desperation. A club that did that would be shuttered a month later.

BTW, the numbers don't work as you described. In the club world, a promoter rarely gets the whole door. If someone brings in a party at an off-time - say an afterwork singles party which I happen to have a lot of experience with - then that person can keep the whole door because people are only there to attend his event. But that "promoter" doesn't work for the club, he works for Acme Singles Company.

A true promoter who is employed by the club itself rarely if ever keeps the entire cover charge. And a true club that paid its patrons to come, wouldnn't be a true club for long.

[Peter Caputa]

I do know most of this. Thanks for the clarifications. I started the post with an idea. And was trying to support it. After thinking about it some more, I agree, that it is pretty dumb idea. Duncan raises some good points here too. Basically, saying the same thing about 'cache':

"The other thing to think about is that clubs with something that people want, don't have a problem getting the cover charge from people. People don't have a problem spending money on things they actually want. A cash incentive might devalue the product in some eyes."

I am glad to see I've got you out of lurk-land, though, Mark. I am learning that there are more and more people reading my blog that are involved with events and promotion. Promoters, like the clubs they promote seem to invent their own 'cache'. But, I find they are all just lurking around observing each other and emulating what others do.

I find myself wondering sometimes whether there are any promoters/clubs willing to try new online marketing approaches?

If I find one more promoter that uses constant contact and runs their site off of phpBB and thinks they are internet marketing geniuses, I think I might throw up.

[Mark]

Thanks for your response, Peter. I agree with you about promoters using Constant Contact, too although very often it is "Stun" these days, too (an email ASP apparently willing to put up with promoters' spam). FYI, I use a top-tier email ASP and incorporate my own version of all of the things you are building/have built into Whizspark (as far as I know. But I only do it for myself (i.e. my own company) so I think you are on the right track (well, good for you, bad for me) by putting these tools out there. Having said that, it seems that when you call for promoters few answer and that doesn't surprise me since the vast majority of them frankkly aren't sophisticated enough to be reading blogs or thinking of new, more efficient ways to reach potential attendees.

[Sooz]

Marc: What's the URL for your event business? I'd love to see what you are up to. I did a Google search for your name but the first few pages of results didn't seem to show anything relevant.

Pete: If you know his website URL (in case he never sees this comment) can you pass it on? Thanks!

[peter caputa]

I don't know what his business is, Sooz. Sorry.

[Andrew]

I used to tell someone in the local bar business (who's bar has since closed) that he should spend his marketing budget on paying people to come to the bar. Same basic idea. Activity begets more activity. I had been in this bar countless times with 10 or so other people in the whole place, only to see passers-by look in, see the sparse crowd, and keep on moving. The ONLY reason they would walk back out, was due to the lack of activity. 50 people inside would have brought in another 100 in no time. And this guy is/was a marketer. He advertised, he created cache, he tried everything under the sun, but nothing really stuck early on. I still maintain that paying people to fill the place, or rewarding them somehow to come in, would have doubled the crowd and the profits. How many times in your life have you left a place with your friends because it was "dead". I don't go to the places with the cache and the fancy flyers. I go where my friends are, and if I am with my friends, I go where the activity is.

As far as paying customers reeking of desparation, never underestimate the power of $5 (a potential ten dollar swing for those used to paying a $5 cover charge) tossed the way of a college student looking for a place to load up. It aint all about the exclusivity....or is it JUST about the exclusivity? :)

http://andrewteman.org/blog/2004/12/22/im-on-the-list/

[art]

I guess I kind of agree with Mark on this, I just can’t imagine this working. Being honest, having had a failed nightclub and losing about half a million on it I don’t think online activity is effective at all. The one night my club starting working was when I found a group of promoters who really took hold of a night. They were considered the “cool” kids and on the first night they put 200 people in the place. These 200 people where their friends and people that wanted to hang out with them. During the following week when they went back to school all the promoters did was talk about their first night and the buzz started. By the next week the word was getting out that Friday night Liquid Sky was the place to be and we sold out the club for the first time ever. Once that happened the night was on auto pilot….people wanted to be there because the place was so hot it was selling out. People we’re getting there earlier and earlier to make sure they got in before we close the door which was usually around 12:30. We filled the place during snow storms, we always had a line down the street and whenever I walked it I’d always get some chick offering to blow me if I snuck them into the club.

The success of the Friday night didn’t translate to my other nights. The people that promoted on Friday was the reason people showed up, not because of the sound system, location, music, or whatever else. I think online activity is nice to let people know what events you’re running but when it comes to nightclubs it’s completely ineffective.

As far as comp'ing people to come in nightclubs actually work better the other way. You need to create the buzz that your so hot you can charge customers whatever you want and they’ll still come in. I think what you’re suggesting is actually the opposite of what is effective in this particular business.

[art]

actually, the other thing I was thinking is the idea of giving cash to customers may be Illegal. There are all sorts of liquor rules around cover charges, drink promotions and so on. I know a lot of things that go on in Worcester are actually illegal and only happen because the ABCC is more interested in Boston than coming out here. Barfly for example did all sorts of drink promotions that they would have never gotten away with in Boston. I don’t know, most people are thinking about bringing in money not paying it out so their might be no problem with this but if you were really serious about doing this you might want to give someone at the ABCC in Boston a call.

[art]

I’ll add another thing to do….about a week before July 4th weekend I was contacted to help promote a fetish night at a gay club called Rage. My wife runs a fetish website www.ladybeque.com so I decided to use that as the jumping off point of the night. We spammed our mailing list, posted it up on our bulletin board, and posted information about the event on a variety of fetish centric boards and list.

The key driver wasn’t anything we did online but is was more that I made sure certain “personalities” in the fetish scene including my wife was going to be there. People showed up to hang out with those people. It’s the promise of social interaction and expectation of who will be there that created the buzz about the night. My wife is my wife to me but to people on her website she is the beautiful dominatrix “Lady Beque” We had people driving in from all over New England for he chance to meet Lady Beque. With very little time the night was a total success.

We’re doing another one of these nights on Labor day weekend, this time we’re hosting a body art competition. These key draws is getting all the local body art shops involved allowing them to setup tables to show off their services, prizes for the best bodyart, and having it so the judging is done by the audience themselves (which means each contestant is going to end up being a marketing representative for us since they will want to win by getting more of their friends to the night). Like I said, this is nothing about online advertising, giveaways, or anything else….it’s about making sure you have a guarantee of a core group of people that will end up marketing the night for you and will serve as one of the key reasons why others will want to show up.

I’ll add one more example, at Liquid Sky we hosted a couple of the first “wormtown nightlife” parties. These nights we’re great successes but they had nothing to do with any giveaway, marketing, or anything else. The success was driven all by social interaction….the people on the site wanted to meet the other people on the site so they showed up at an event where they were guaranteed to meet everyone. While everyone had a good time the following week the club was dead because their was no longer a guarantee that all those people would be there. It’s all about social interaction….not giveaways.

[Peter Caputa]

Online advertising can facilitate all of this. Maybe not a banner ad and an email blast, but getting the connectors involved and having them use email, their own websites, etc is the best of both worlds.

That's all we are doing. people don't go to a website, see an ad (or open their email) and decide what to do. That's, of course, very true, Neo. But, if they receive two emails from people they respect saying that they are going or visit 3 profiles on myspace and see that those people are going, then people go. And as more people show that they are going (Online or off), more people are interested in going.

Promoters that embrace the online tools to make their jobs easier and their success measurable in micro-increments (tracking online campaigns), will ultimately be a lot more effective.

[Peter Caputa]

Sidenote: Looks like Andy is continuing the conversation over here.

[art]

Right, but instead of just giving the first 100 people in the club $5 you're better off finding the 10 people that are going to draw 20 people each is give them a free cover, dree drinks (yes, don't undercover), a VIP room, whatever. Clubs will do things like hire the star of some college football team to be a bouncer and one of the cheerleaders to be a bartender. They know by doing that they can capture a large part of that schools party crowd. Online tools are only effective in the nightclub business for informing people of the chance for social interaction with their circle of friends/interest

[Peter Caputa]

I think what you are missing is that...

The cheerleader now has a myspace profile with 2 thousand fans.

The football guy has his own email list of 5,000 people.

The web geek has a readership of 20k people.

The web, email, IM, RSS are just tools that make leveraging their popularity easier (whether it is because she has a nice rack, is good at football or writes "good" about tech). That's what Andy and I have been saying for 3 years now. People are finally starting to listen. And the fact that Murdoch bought a few million popular kids (in their own way) for $528M proves it.

I'll have more to add to this conversation once Locobazooka is over. Suffice to say, that there are more than 100 popular kids telling a few thousand more about Locobazooka. That might happen offline without giving these people rewards. But, how the hell are you ever going to track and prove that? We can prove an ROI on providing rewards and facilitating word of mouth, by attributing ticket sales to an individual person's online word of mouth (whether they are popular or not.)

The key to scaling this up is getting enough of the cool kids involved. Thus, the rational for this.

I was hoping you'd be one of the cool kids, Art?

[Art]

No, I get all of that. It's exactly what I'm talking about....all I'm saying is if you got that going on why would you comp the first random group of people that happen to come?? Figure out how to reward the cool people.

So, looking at my fetish even as an example we use Beck's Myspace account, we have an ALT profile where people are trying to me, our mailing list off the website and we hit all those things. In this case Beque and I are the cool people who are drawing others in. They see us as people that know more "like-minded" people than them so beyond meeting us they'll meet more people like themselves. It keeps rolling and we fill the place up. The only VIP I treatment we want is our bar tab paid and to be the center of attention (since we're attention whores).

My point is it's silly just to pay the first people that show up at an event....in fact, because they are the first people to show up they're not the cool people. find some Myspace chick with 5000 friends and a birthday coming up and tell her your give her a private room free of charge to host her birthday. Odds are she'll invite enough people that it will be worth the effort.

As far as being one of the cool kids, I'm a little old for that. I like orchestrating for the cool kids.

[Peter Caputa]

I think we are saying the same. I agree that paying people to come is not necessary if you get the cool kids to come.

This conversation has veered in a few directions and I think everyone (Except Andy is hanging on a bit because he is a cheap bastard) agrees that paying people $5 at the door is the stupidest thing I've ever posted. Well. One of them, atleast.

Thanks for the conversation, Art. I appreciate it!

[Peter Caputa]

Talk about getting the cool kids to come so that others will want to come. Up until the other day, you had to request an invitation.

Web 2.0, the conference, is a prime example... Of getting the cool geeks to come. Then, the rest of the geeks want to show up.

[Peter Caputa]

Some more good conversation about this at VolcanoBoy.

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