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Frank and the Hidden Cost of Strawberry Daiquiris

Let’s say that you are the lucky owner of a prosperous bar called “Frank’s Beer and Daiquiri” that sells only two types of drinks, namely beer and (you guessed it) strawberry daiquiris. Interestingly, you have a crazy bartender called Frank who insists on deciding what people should drink. A customer will approach the bar and ask for a beer, and Frank will tell him, “No! You vill be having ze daiquiri, or else!” Besides having seen to many World War Two movies, Frank is a bit of a prima donna, but for some reason, your customers love it, and they actually drink whatever he orders them to.

Now, you are interested in maximising your revenue from the bar, so you examine which of the two drinks you make the most money on (and hence, which drinks you should ask Frank to ‘recommend’ to people). A brief calculation tells you the following:

• A bottle of beer costs you three dollars to buy from the wholesaler, and you can sell it to your customers for four dollars. Ergo, you earn a dollar every time you sell a beer.
• The ingredients for a strawberry daiquiri are more expensive, costing you six dollars. But the great news is that you can sell it for eight dollars, making you two dollars every time you sell a daiquiri.

From this, you draw the conclusion that Frank should be recommending the daiquiris to everybody. Right?

Well, maybe not. Because once you take a second look at the issue, you discover something else: making a strawberry daiquiri is considerably more time-consuming for Frank than popping open a beer bottle. This is no problem when Frank has lots of time, say, in the beginning of the evening. But when the bar begins to fill up, the picture changes, because now, there is a queue at the bar: Frank’s time has suddenly become the bottleneck, limiting how much you sell (Frank, being a sociopath, will not let other bartenders help him). And by observing the bar carefully, you discover that Frank can sell three beers in the time it takes him to sell one daiquiri. In other words, it seems that you are better off having Frank sell nothing but beer.

So far, so good. But then, another issue comes into play. It turns out that if your female customers are offered nothing but beer, each of them drink fewer drinks over the course of the entire evening. There’s just something about beer that makes them feel bloated and ready to go home after four bottles. And once the girls leave, it is only a matter of time before the guys take off as well, preferably after slapping each other around for a bit. As to the daiquiris, however, the female customers actually think the strawberry is healthy for them, so they guzzle them like no tomorrow and stay up all night, for a total sale of eight daiquiris per customer. Acknowledging this, you once again order Frank to sell only daiquiris. This finally maximises your revenue from the bar, and all seems well.

But of course, a new problem arises: since you no longer serve beer, all the ruggedly handsome coal miners that used to frequent your bar will disappear in search of a less posh place to chug down their after-mining pints. And to your chagrin, you discover that the wealthy and attractive thirty-something women who used to frequent your bar only did so because they secretly fancied the manly coal miners. These women leave as well, and suddenly you are left with nothing but effeminate philosophy students and the teenaged girls that mysteriously fancy them, and neither can afford to drink anything but mineral water, since they spend all their money on mind-altering drugs. Tough luck. You decide to fire Frank and sell drugs instead, starting an illustrious life of crime and passing outside the remit of this blog’s subject.

Now, when I made you suffer through this story, it is because I want to illustrate three things.

• First, detailed numerical analysis can be helpful. It can help you get a precise understanding of the cost structure of your bar, and this can in turn help you make more money.
• Second, numerical analysis should complement, not substitute, your common sense. You need to consider the numbers alongside more intangible factors like your bar’s atmosphere. Steering by the numbers alone is a Titanic kind of move, only without the Oscar nominations.
• Third, try to experiment and notice what happens. Bars and nightclubs are complex systems, and it can be difficult to predict ‘from the armchair’ how to improve them. In such situations, it can be a good idea to run little experiments and look closely at the results. For instance, what would happen if you rearranged the order of the drinks on the menu, or wrote some of them in larger fonts? Could you influence what people ordered? My guess is yes; for every Cosmopolitan aficionado out there, there’s probably a guy who just orders one of the three topmost items on the menu. There are hundreds of small things like this that you can safely and easily play around with, and that could turn out to make a real and valuable difference.

In general, as I have written about in one of my other blogs, Fragments of Knowledge, it is very often the case that the deity is in the detail: for more on this, check out the post called The Death of Complexity and the Rise of Small Things.

Godot, the waiter

The aspect I hate to most about bars is not the queueing. It is the standing in an overcrowded bar, waiting for the bartender to get to me so that I can order my drinks.

When you are queueing, you can at least talk to people. But when making your desperate grab for the elusive attention of the bartenders, you can’t really have a meaningful conversation at the same time. You turn your head for a second to make a pass on the nice girl next to you, and that will inevitably be the split second where you had a chance to catch the bartender’s attention. (Of course, if the girl next to you is actually responding positively to your comment, you may not need the drink. And then again, it could be a ploy to distract you while her friend squeezes in and orders drinks for them).

For me, this is the worst part about the going out experience. And from the bar’s perspective, it doesn’t make sense either. People waiting means people not being served, money not being made. So what can be done?

Professional bartenders can alleviate the problem. Once you signal your intention to order, a professional bartender will look you in the eye and nod, signalling that you are on his waiting list. Then, you are free to chat to your companions in the bar until the bartender taps your shoulder, ready to take your order. I love professional bartenders. But of course, professional bartenders are expensive, so this may not work from the bar owner's perspective. The other easy solution – employ more bartenders – is probably not viable either. The problem is that the demand for bartenders vary throughout the evening. Since bartenders normally work a full shift, having the perfect number of bartenders at peak demand time means being seriously overstaffed during the rest of the evening. In this way, many bar owners probably think of it as a binary choice: either good service and high employee costs, or worse service but low employee costs.

Still, I don’t think bar owners are being creative enough in this area. There is no reason why these two things need to be mutually exclusive. For instance, what about fast beer lines? Supermarkets have fast lines for customers with few items. Why not have a similar fast line in bars with the most popular drinks, so that people don’t have to suffer under the specialised demands of other customers? There’s always some discerning woman out there who wants her double-sieved, seven-ingredient margarita, only without the strawberry seeds, because strawberry seeds really aren’t good for her teint. Why do I – wanting to order a simple beer – have to wait in line while her signature drink is being slowly coaxed into existence?

A fast line for beer (or other similarly simple drinks) would solve this problem. You could even make the fast-line beer a bit more expensive – I’d be perfectly willing to part with a little extra to get my drink fast. Put the price at a round number, so you also avoid deling with too much small change. It may also induce more people to order the simpler drinks, which could increase the serving speed further. A simple order like beer takes up far less of the bartender’s time, freeing him to serve other customers. Similarly, you sould also imagine a line where you could only pay with cash, to avoid the hazzle of time-demanding credit card payments.

Of course, in these internet-enabled times, it is tempting to conjure up the idea of automatic ordering systems. Customers would sit at their table, entering their orders on a touch-screen embedded in the table, and would receive their drinks a little later. But I am quite sceptical about this sort of thing. It may sound good on paper, but such systems always hold more potential for trouble than their creators imagine, especially once they are implemented in a room full of inebriated people. For instance, a screen embedded in a table would have to be both spill-resistant and capable of supporting the weight of impromptu table dancing bargoers in stiletto heels. And the implementation issues only get worse if it is a system that people are not used to interacting with; I’m sure it can be done, but it will probably take a lot of experimentation, and may not be worth the cost and effort.

But there may be a more simple solution: what about having beer-o-mats? Like cigarette dispensers, you could have Heineken or Budweiser dispensers, alleviating the pressure on the bartenders. A vending machine is a simple solution that people are already familiar with, and that could significantly reduce the pressure at the bar. At the same time, it would probably reduce the incidents of stealing. In Denmark at least, one of the biggest problems for bars is employee dishonesty: the bartenders hand out free beers to their friends, or simply pocket the money, never entering the purchase into the register. Vending machines don’t suffer from this issue (depending on who empties them, of course).

A related problem is the bar’s challenge with predicting the demand for different kinds of liquors. The demand for specific drinks varies, and a bar may well risk to run out of gin, while sitting on unnecessarily large amounts of vodka. The issue is being exacerbated by the fact that within each type of alcohol, there are many different brands; having lots of normal Absolut vodka is no good if your discerning customers strongly prefer Absolut Cranberry.

I saw a bar in Barcelona that had a clever solution to this issue. All over the bar, they had electronic screens showing the prices of different types of drinks. The point was that those prices fluctuated throughout the evening, so that if they weren’t selling enough gin tonics, they would instantly lower the prices for gin tonics until people started ordering them (and vice versa with the stuff they were running low on). I don’t know if the system worked well for them, but I liked the idea.

Also, there may be a market for temporary bartenders, working in increments of one hour. Imagine a corps of temp bartenders that you can call upon for an hour, whenever the peak demand hits your bar. The problem with this, of course, may be that bars often have peak demands at the same time. Also, the above-mentioned risk of stealing could potentially increase, since the bartenders would not have a regular relationship with the single bar. But still, it may be worth considering.

Finally, I want to relate a story that shows how bar owners can sometimes have their own reasons for providing slow service. While I was studying my MBA in Barcelona, we had a Christmas party at a rented location. As part of the package deal we had negotiated, the owner would include free bar for the entire evening – from midnight till the party ended, we were free to drink as much as we liked.

So, what does a clever (if dishonest) bar owner do, in order to make sure that he doesn’t lose too much money on the free bar? He hires only three bartenders. The evening got slightly surreal, as 250+ people crowded around a small bar with bartenders that were obviously not in any hurry to serve us. And of course, the waiting time got even worse as people resorted to ordering eight or ten drinks at the time. This, of course, is not an example of honest business practices, and would not have worked with regular customers. But the point is that there may be situations where it makes sense for bars to limit the capacity of their bars – perhaps even for honest reasons.

Restrooms: Hot Water, Size and Mirrors

Restrooms are an area of interest, as they are often the subject of subtle manipulations.

An example occurred a couple of years ago, when some discoteques started disabling the cold water faucets in the restrooms. Why would you do this, you may ask? I heard two possible, related explanations. One is that it is a simple attempt to increase bar purchases. Some guests would make their nights cheaper by drinking tap water, thereby spending less money than they would if they bought the water in the bar. Bar owners countered this by disabling the cold water taps, so guests were forced to buy their water in the bar.

Another is more interesting, and is related to ecstasy (the drug, not the state of mind). When ecstasy became popular, some discos suddenly saw their bar earnings drop significantly. Now, it wasn’t just the occasional poor student that would drink tap water; in the techno-oriented discos, it was practically the whole dance floor, since it is supposedly neither healthy nor necessary to mix ecstasy and alcohol. To limit this, and possibly in order to attract a different and less drug-dependent crowd, some discos killed the cold water tap and refused to sell water in the bar. Reportedly, however, this practice was stopped by the government after a few partygoers tragically died of dehydration. I believe there is now a law obliging bars to make cold tap water available free of charge.

A second interesting point was made by Paco Underhill in his book Call of the Mall: Why on earth are men’s and women’s restrooms always equally big? Everybody knows that women spend more time in the restrooms, and that the line is always longer in front of the women’s restroom than in front of the men's. Why do most architects seem to ignore this when they could easily improve the situation by making the women’s restrooms bigger and with more toilets? After all, why make your guests spend time in a restroom queue when they could be in the bar, drinking and having fun?

A third example was mentioned recently by a friend of mine. She had the problem that when she would throw a party in her flat, a long line would soon form outside her single restroom. Especially her female friends would spend a lot of time in there, adjusting make-up and whatnot. Asking the flat next door to let the inebriated partygoers use their facilities seemed somewhat antagonistic towards the spirit of good neighbourship.

The solution? She covered up the restroom mirrors with black plastic. As this meant that the girls could not use the restroom for make-up maintenance, they spent a lot less time in there. This is a beautiful variation of the elevator trick, where placing a mirror next to the elevator lift makes the wait more bearable: people forget the passing of time when they are presented with an opportunity to become absorbed in studying their own countenance. I'll talk more on the psychology of waiting in a later post.

Meeting New People

Arguably, one of the central reasons for going to bars and discoteques is not only to party with your friends, but also to meet new people, particularly those of the opposite gender (or the same gender, if you are gay). How does this take place?

The classical instance of contact initiation is when a guy picks up courage, selects a girl, and moves to chat her, wielding a more or less suave pick-up line. Or so we tend to think. But in fact, when you study the scene closely, it is normally not the guy who selects the girl and initiates the contact – it is the girl who starts the show. She does so in a very discrete way, typically by maintaining eye contact with the guy one second longer than normal. This acts as an ‘approach’ cue to the guy who then makes the more overt move of crossing the floor, offering a drink or similar. Girls make the first, covert move, guys make the second, obvious one. Sometimes, the girl’s cue is so subtle that the guy doesn’t even notice consciously that he has just been given the nod.

An interesting aside to this: are girls more afraid of losing face than guys? Everybody hates being rejected, but the important thing about rejections seems to be not whether they happen, but how public they are. The advantage of the girl’s move is that it is both discrete and deniable; if he doesn’t respond, nobody sees it, and the girl can deny making it, even to herself. You cannot really lose face when there are no witnesses. The guy, however, puts himself at a significant risk of loosing face in public when he crosses the floor and makes his move. If he is spurned by the girl, the rejection is both obvious and not really deniable to neither himself, the girl or his friends. It is comparatively rare to see a girl make an obvious move on a guy.

So, back to the main question, which is: how can we – in the role of a bar owner – encourage contacts between strangers? (I presume that it is in our interest to do so – again, the theory being that people like to go to bars where they have a better chance of getting lucky, and perhaps also that they spend more in an attempt to impress the other person. This, of course, is debatable).

The most obvious way to do so is the amount of people you let in, or what I call crowdiness. If the bar is filled to the brim with people, they will automatically come into contact with each other, merely because of the physical proximity. I have initiated countless conversations with strangers with an ‘oh, sorry’ and a smile after accidentally (or sometimes less accidentally) bumping into them. Inversely, if the bar is half-empty and people are grouped in little social islands, it requires a much more conscious effort to make contact with other groups, and supposedly happens more rarely – not least because the lack of people makes any contact attempts more public and obvious, and hence more embarrassing if they fail. A similar thing goes more locally, for the dance floor – a small enclosed wriggling space encourages contact making far more than a wide open dance floor. The discoes who master this are the ones that have cordoned off some parts of the club in the start of the evening, and open op more space gradually as more guests enter, maintaining a good crowdiness level.

Similarly, you can increase the contact opportunities by dampening the lights and by raising the music level to a certain level. Both of these initiatives decreases the ‘observability’ of the contact attempts, making them less costly to carry out. The atmosphere of the club also makes a difference, is it a cool lounge club where people are more or less posing for each other, or is it a rowdy, sweaty, fun jumping-up-and-down place where nobody cares too much about appearances (and consequently about loosing face)?

To conclude this, I’ll relate one of my own experiences about contact making. In 1996 in Copenhagen, I was at a very peculiar party taking place aboard a ferry. It was organised as part of a citywide event called Kulturby 96 – Culture City ’96 – and the ferry was host to no less than four different parties at the same time. The remarkable thing was that in one of the bars, the organisers had hired people to create new contacts among the guests. As I was standing in the bar, the girl next to me started talking to me. After a minute of two of chatting, she also got the person on the other side of her involved in the conversation. And then, when all three of us were talking, she excused herself and left me talking to my new acquaintance. I found out about the set-up when I met her later doing the same thing to another pair of guest. Fascinating idea, and a very cool party as well.

Trigger Events

A more socially oriented phenomenon is what I call Trigger Events. Trigger Events are highly public events that happen at a party, and that serves as a precedent, establishing a certain mood for the rest of the evening.

 

In my university years, I repeatedly served as a mentor for the new students. One of the elements of the mentoring programme was a three-day excursion, where we would invade a house in the country with approximately 150 people, play games during the day, and party during the night.

 

The first time I went, it was fairly quiet on the romantic front. Sure, a few people ended up kissing, but it was all very discrete and proper, and there wasn’t a lot of it. Next year, however, was completely different. At the beginning of the first party, where people had barely started to get intoxicated, a couple suddenly started kissing each other passionately in the middle of the dance floor for all to see. They subsequently moved to the nearest wall, where they moved from kissing to prolonged groping – still in plain sight of everybody.

 

What happened next was fantastic. If was as if everybody looked around with a guarded look on their face, saw nobody reacting to it, and then thought to themselves, “Okay, what the hell, tonight is apparently that kind of party”. Needless to say, the rest of the night – and the rest of the trip – was a study in semi-promiscuous behaviour as people started acting as if they were on a Greek island, far from everybody they knew. By a quick tally in the bus ride home, the number of people making out was more than three times as high as the previous year.

 

This is what Trigger Events is all about: changing the nature of a social get-together by signaling that a certain behaviour, normally thought inappropriate, is now fully acceptable. Trigger Events create temporary social islands where the normal rules are nullified. It doesn’t have to be about sex. It can be something as simple as the host breaking a fine crystal glass at a fancy dinner party and laughing about it. A friend of mine told me about a company party where right after dinner, the normally austere CEO had gotten up on a stage in front of the entire company and danced like crazy, after which all hell broke loose on the dance floor. At the beginning of a pheasant hunt I was on, where you could only shoot the male birds, the host – standing in front of everybody – mistakenly shot and killed two female birds; after that, female birds went down in troves. And at a recent party I attended with my MBA class in an Andorran ski village, two of the girls from the class went up on a balcony and did a dance with some succinct lesbian undertones; for the rest of the night, my fellow students (normally a well-behaved crowd) would walk up to their co-students and lick them on the cheek, just for the heck of it. Magnificent party, really.

 

Trigger Events can make all the difference, creating the mood of the party. I imagine that when discoteque owners pay professional dancers to dance on stages and in cages, they are trying to do something similar. However, I suspect this works less well than it should. Trigger Events are most effective when it is performed by your peers (especially if you know them). A professional dancer just isn’t the same thing; she’s not breaking any social rules, she is just doing what she is paid for, and people know this. Instead of dressing up like something between a stripper and a Las Vegas showgirl, I think it would be far more effective if the paid dancers looked and dressed like everybody else, even to the extent of hiding the fact that they are actually employed. I envision a discoteque in which several of the ‘guests’ are in fact paid party starters, creating Trigger Events by overtly making out with their (similarly employed) boyfriends, in the bar, on the dance floor, and wherever else the party needs to get started.

Music Volume

A simple yet powerful illustration of the things I want to explore with this blog is provided by music – or, more specifically, the music volume. The DJ or bar owner has a very effective tool at his disposal that can be used to influence how people behave in the disco: turning up the volume.
At the quiet end of the spectrum, there is soft background music. Conversations seem to flow easier when there is music in the background. It fills out conversational pauses that could otherwise have been awkward. It filters out the conversation of bystanders and creates a more private space where others cannot overhear what you talk about. And it provides a common subject that you can talk about with the people around you: “Cool song – isn’t that San Germain?” Also, it apparently makes people feel more at ease – notice how many airlines play soft music at take-off and landings (presumably to drown out the noise of the wings falling off). Similarly, among managers of department stores, it is a well-known fact that shoppers stay longer (and buy more) if the store is filled with pleasant music.

This is all part of creating a specific atmosphere, a fact which may seem self-evidently simple. But consider what other bars do: They turn up the volume significantly higher. At some noise level – I don’t know the exact decibel limit – it has a more specific and observable result: It becomes impossible to carry on a conversation in a large group. Turn it up even more, and three-people conversations become difficult as well. As the DJ turns up the music, he in effect determines how people interact in the bar.

At some noise level, even two-person conversations present significant challenges. To hear each other, you need to put your mouth right next to the ear of your conversation partner, maybe even cupping your hand and shouting to get the message across. I have been in discotheques where the music level was so loud that not even this was possible. In some types of discos, the more house- and techno-oriented ones, the combination of physical proximity and conversational isolation seems to be the main attraction.

It is a good question whether there is a conscious calculation behind the loud music volume, and if so, what the reasoning behind it is. Maybe bar owners have found that guests drink more the less they talk. Or maybe the forced proximity is appreciated by the guests who then have a tangible excuse to get in close physical contact with the opposite sex – an objective which may be the ultimate goal of any human activity. (My guess would be that you come back to the bars in which you tend to get lucky). Or maybe, it is something which is mostly determined by either chance or old habits, or according to the whims of whatever DJ is spinning that day.

Of course, there is the related question of the genre of the music. The type of music seems to be a driving factor when it comes to the patrons’ selection of which bar to go to. (Also, Heavy Metal somehow doesn’t come across in the right way when played at a barely audible level). I’ll come back to this in a future post.

Party Dynamics Goes Live

After reading Paco Underhill’s great book on how people behave in department stores, Why We Buy: The Science of Shopping, I started thinking about parties.

As most other people, I have been to a great number of parties and social gatherings during my life; some were fantastic, a painful few were abysmally boring, with the majority somewhere in between. At the great parties, I just had fun – but at the more boring ones, with nothing to occupy my attention, I would start thinking about why the party was boring. What went wrong? Why weren’t people having fun? And gradually, I started looking around at the fun parties, as well. What made these evenings a success? What did it take to turn an unpromising setup into a raving mass of happy people? What makes the difference?

The curiosity about this seemed to stay with me. Slowly, over several years, I began to see some patterns, some similarities across the different types of parties. And thus, the idea of studying Party Dynamics was born.

The question I want to explore is this: What key factors determine whether a party becomes a success or a catastrophe? Specifically, if we were to set up videocameras in discoteques and bars all over the world, what would we find? What patterns of human behaviour would emerge? What correlations would exist between those behaviours and the way the party is organised – considering everything from the identity, gender and age of the people to the music, the room, the lightning level, the dresscode, the alcohol served, the behaviour of others, the invitations, the number of partygoers, the familiarity of the other guests, the location, the objectives of the people, and the nature of the party itself?

And, more importantly, could we use this knowledge to create better parties?

I have no clue whether this is something that has already been studied. If it has, it has likely taken place within the fields of sociology, ethnology or anthropology. I would be more than happy to hear from you if you know of any such studies. What I suspect, however, is that most of this knowledge is not written down anywhere, but resides in the heads of bar owners, wedding planners, event agencies, discoteque managers, professional hostesses, and other creatures of the night. That is what I want to change.

To do so, I will use this space to start posting my own theories and ideas on the subject. Please don’t hesitate to leave a comment if you have any input or ideas of your own.