Bounty Hunters and Pyramid Schemes

DogMany companies offer to pay “bounties” to employees who suggest people to fill open positions within the organization.  This makes sense – recruiting is a very expensive process, and someone who is already acquainted with an existing employee is more likely to have a true understanding of the role, and therefore know what they’re getting into and be more likely to stick around for the long haul.

Why couldn’t we do something similar at our bar?  Any existing customer (defined as someone who is already in our customer database) who brings in new patrons gets a free drink for each one who gives us their name and email address.  Bring in 8 or 10 of your friends who have never been to the bar before, and your evening is made!

The same logic applies – getting new customers by referral is less expensive than “recruiting” them from scratch, and existing customers are better able to gauge whether their friends are likely to enjoy that particular bar.

And if your buddies really do end up liking the place and bring in their own acquaintances next time, they’ll drink free, too.  It’s the classic shampoo commercial, “…and she told two friends, and so on, and so on…”

But Stephen, you say, this doesn’t scale!  Soon there won’t be anybody left in town that has never been to your bar – they’ll all be in your permission-based marketing list! 

Precisely.

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4 Responses to “Bounty Hunters and Pyramid Schemes”

  1. Memorable in the Wrong Way « About Bars & Marketing Says:

    […] was about to type “classic Revlon commercial” in yesterday’s post but I wasn’t sure of the brand, so I used “shampoo” instead.  Then curious as […]

  2. Why Are You Scared to Ask for a Referral? « About Bars & Marketing Says:

    […] to recommend you to their friends.  I’ve touched on some of the reasons for this in previous posts, but it’s potent […]

  3. Which Would You Choose? « About Bars & Marketing - by Stephen Brooks Says:

    […] exponential growth, but as a marketing tool it can be very powerful.  As I wrote about here, it can dramatically grow a customer base.  But, as Gladwell points out, for something to grow […]

  4. We’re All Connected « About Bars & Marketing - by Stephen Brooks Says:

    […] give me 40 acres while I turn this rig around to marketing again.  I’ve mentioned the “she told 2 friends, and she told 2 friends, and so on, and so on,” phenomenon before, and how effective word of mouth between trusted acquaintances is as a […]


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