Friday, October 30, 2015

Curious Business Strategy

As part of the User Experience Day conference that I have organized for the past four years at the HFES Conference, I get bids from bars and pubs for a happy hour. We generally ask them for space for 100-150 people, one drink ticket per person, and enough appetizers to keep us going for 2 hours or so. The quotes run $7-$10,000 usually.

These are places in a major city downtown so we don’t expect them to be cheap. It always seemed a bit much to me, but our meeting planners always tell me that this is about right for what we are asking for.

Unfortunately, we didn’t get a sponsor this year, so we canceled the happy hour. But of course, we can’t end a long day of design thinking and hackathons without some fun. So at 5:30pm we went to a nearby bar figuring we would play it by ear.

I think we had about 75 people. Not as many as usual, but I guess some people only come when the food is free (which it was this year too, but we didn't tell them in advance). The total bill came out to be $400 for the food and another $400 for the drinks. With tax and tip we ended up just over $1,000 (currently sitting on my credit card – ouch). 

How can it possibly be $1,000 for 75 people and $8,000 for 150 people? I checked the bids to find out. The formal bids add a fee for assigning us our own server.  They add a fee for blocking off a set area of the bar just for us. They double the price of drinks because they don’t give us the happy hour prices and add an extra rip for some reason I can’t fathom. Same thing with the appetizers – no happy hour prices and a surcharge. Then there is a catering fee. I think there was even a larger tax for some reason.

This year, we still took over our own area of the bar because at 5:30 on a Wednesday night it wasn’t that crowded. We still got our own server because we were the only people there to serve. The food tasted just as good at happy hour prices. The drinks too.  The bar made a ton more money than they would have without us.

So here are two questions. First, have we been suckers for the past four years? The meeting planners told us the quotes were normal so that would mean hundreds of groups are suckers every day.

Second, is it ethical to show up to a bar unannounced with 75 people? I could tell that our server was irritated at first, until she realized how much money she was going to make. We were really nice about it. And I will give them a nice review on Yelp and Trip Advisor too. We are taking a risk that the bar won’t be so empty, but that is on us, not on them.

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