John: If somebody goes to a restaurant for the first time and has a flawless experience, the statistical likelihood of them doing a second visit is about 40%. They come back the second time and have a flawless experience, the statistical likelihood of a third visit is still about 42%. The third time they come, the statistical likelihood of a fourth visit is over 70%. So, you gotta mark it to three visits, not one.
Visit one free rib dinner, you sit ’em down, put a red napkin on the table, not a white one. Identify them as a first-time customer, connect with them, and work to get ’em back a second time and a third time. Once they’re there the third time, you own ’em. –
Gary: My man Chandler-
Chandler: Oh, the red napkin thing is genius, ’cause in the fast-casual environment we’re not hitting that table side,
Gary: But – Let me give you –
Chandler: ’cause it’s –
Gary: Chandler, –
John: Can I detail that for him? –
Gary: Go ahead, go ahead. –
John: Okay, so you put a red napkin at the table. Gary sits down, he’s eating dinner, now he’s getting his free rib dinner, his water costs him nothing. I know he’s a first-time customer, ’cause he’s got a red napkin. When he’s leaving, and the manager comes to the table, writes on the back of a business card, five dollars off chicken. “Did you like the ribs?” “loved ’em” “you gotta try my chicken, come in for the chicken” now I’m prompting a second visit. Not with a printed coupon, but a hand-written card. Now he comes in for the second visit, drops the business card on the table, everybody knows this is the second visit, ’cause red napkin was the first visit.
Second visit, you finish the meal, you go up, you say, “so how was the chicken?” “it was frickin’ great!” “are you full?” “totally stuffed” “man, next time you gotta try my cheesecake” free piece of cheesecake. Now, three visits, ribs –
Gary: Wait, a pizza? –
John: A piece of cheesecake. –
Gary: Oh, a pizza flavored cheesecake, I was like “that’s fucking brilliant” –
John: So, the rib dinner costs me five dollars. The chicken was a wash out, ’cause it was a discount, –
Gary: That’s right. –
John: The cheesecake was $1.35. For about six dollars, you got three visits out of him with a 70% likelihood of a fourth. That’s the way you mark at a restaurant, within four walls of it. –
Chandler: That is huge right there. –
Gary: Chandler –
Chandler: That’s why you are the best. –
Gary: Chandler, let me give you, listen. Let me give you one more for the road, mister. There was a very interesting thing that John said. Because I grew up in that environment too, and John’s from the traditional marketing world that we grew up in, pulling from his world. Notice how he said, first time customer, I’ll give it to you. Because the traditional retail and bar thing is like, look, it’s more expensive, if you’ve already got somebody in the funnel, the cost of acquisition for a new buddy is very, very-very powerful. I used to do that too, but it was tricky, right? Because now some of your old-time customers may see that, and they’ve got that angst of “wait a minute, why am I being not treated that way, as a loyal customer, you just want new people” and it’s always been a friction for us, right?
Now, I just went to Instagram, right? I typed in Lexington, Kentucky. Got it? –
Chandler: Yes sir. –
Gary: I’m looking at nine posts right now, that are top posts, and ungodly amounts, unlimited amounts of people’s posts that are from Lexington, Kentucky, I went all the way down, and that’s from 48-minutes ago. 40-pictures down, 48-minutes ago. Thousands of people are posting right now on Instagram from Lexington, Kentucky. I go to the top nine posts. I click the middle one, it’s a nice little cute couple. They got 298-likes. Abby, she’s got, she’s from somewhere, she’s part of a sorority it looks like. She has 2,387-followers. There’s a triple dot in the top right corner on Instagram. I hit it, it lets me send her a message. I send her a message, “Abby, see you’re in Lexington. We love being part of Lexington. Here’s a 20-dollar off coupon, 10-dollar off coupon, free chicken”, only she sees it.
You’re grabbing somebody who has a big social media profile. You’ve not hurt any of your loyal customers like me and John had two back in the day, she comes, and she posts a picture of the food, and creates word of mouth. Now that five-dollar acquisition created no friction to loyal customers, and because she’s now media, she amplifies it, and you’re getting an 80, 500, 4000-dollar media amplification, against your five fucking dollars! –
John: And last one thing, don’t discount. People get addicted to discounts, the don’t get addicted to free. –
Gary: That’s right.