Anyone who has read my book knows that I am a big Barcelona fan.
Last week I was once again at the "Boqueria" market on the Rambla, which some of you may know. The market is always very crowded and teeming with tourists, but there are a few really good kioskos with fresh fish and good food. Especially if you're on your own, it's a good place to grab a bite to eat and watch the hustle and bustle of the market over a glass of vino.
So last week I was there again, but this time not at lunchtime, but for the first time in the early evening. The 'kiosks' I knew were already closed, but one was still open and as I walked past it, a promoter approached me. I actually have a golden rule:
I NEVER go to a restaurant where I am approached by a promoter outside.
But as all the other stands were already closed, I agreed.
To cut a long story short: that was of course a mistake. The food was lousy. There were no Spaniards in the open kitchen, only Indians, who are not exactly experts in Catalan cuisine 😉. Nevertheless, I fell for the offer and was annoyed afterwards...
When a restaurant is not running, there are two options:
Either I change the chef and improve the quality of the food or I put a promoter in front of the door to guide the guests into the restaurant.
And of course you can do both, but please do it in the right order. The crucial point is that although I can fill my table with promoters in the short term, my neighbors with the good food will prevail in the long term. After all, guests come there voluntarily, they like coming back and they recommend my restaurant to others.
Now you're probably wondering why I'm telling you this anecdote. Well, because I realized afterwards that similar rules apply in the app business and that there are "the promoters" and "the chefs" among the entrepreneurial personalities here too. But the effects in the app business are much more serious than in my "boqueria" example. Acquiring a new customer costs on average 6 times as much as the transaction of an existing customer.
Advertising costs money, word-of-mouth propaganda and loyalty are free.
There are apps that invest huge amounts in performance marketing and try to get their users over the paywall as lucratively as possible with dubious weekly subscriptions. These are usually managed by "promoters". The principle can certainly work in the short term. In the long term, however, the result is poor app store reviews that can be viewed and shared by everyone. In addition, high customer acquisition costs, which have to constantly "fight" against the bad product.
Then there are the app entrepreneurs who focus 100% on the added value of their product and the user experience of their customers before they even think about marketing. These are usually led by the "chefs". The result is positive app store reviews, recommendations and relatively low customer acquisition costs with a higher lifetime value and therefore a more sustainable business model.
For chefs, customers are not "victims" but "kings".
And they don't see a subscription purely as a payment method, but as an additional value that they offer their best customers. They understand that you have to earn "recurring revenue" in the truest sense of the word. "Chefs" have a completely different perspective than "promoters".
Which type of entrepreneur do you belong to - chef 👨🏻🍳 or promoter 📣?
I won't mention the bad bar on the Boqueria, by the way, because it will soon disappear anyway. The competition will sort it out. However, if you ever visit the Boqueria market, here are two kiosks that I can highly recommend 🐟🦐🍷👨🏻🍳🤌
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