I like to describe “compound marketing” as the ability to influence numerous guests, creating amazing experiences for them, thereby utilizing them to market your business.
The best example of how compound marketing works is to use a golf analogy. As a horrible golfer myself, I would invite a seasoned golfer to play a game of golf and, being as I live in Las Vegas, I would propose to make it interesting by betting on each hole. Given that there are 18 holes on a golf course, I would propose betting a dime per hole. Any scratch golfer would look at that bet and take it, as the worse case scenario would be to lose $1.80 for the entire round of golf. After the first hole, I might propose to increase the bet by doubling it after each hole. Most people would agree and take the bet. At this point, I would point out that you’d better be a fantastic golfer because by doubling the bet after each hole (ex, 10 cents, to 20 cents, to 40 cents, to 80 cents, etc), at the end of 18 holes, the loss would be $13,107.20. That is the magic of compounding. It’s not just doubling—it’s multiplying.
Let me give you an example of how this works for my business. I opened a restaurant in 2008 in San Diego called Suite & Tender. We opened it to great reviews from San Diego Magazine, 944 Magazine and Riviera Magazine. Within three weeks after we opened, one of my cocktail servers approached me with a business card from a gentleman who was a senior executive at Qualcomm. She said he was down in the lounge and asked if I wanted to meet him. Considering that Qualcomm was one of the largest employers in San Diego, of course I wanted to meet this gentleman. I went into the lounge and there sat Houman Haghighi, who was the corporate venture capital and business development at Qualcomm. I introduced myself to Houman who was visiting our lounge with two coworkers, chatted with him and thanked him for visiting. He had a cocktail menu in his hand and asked which was my favorite specialty cocktail. I proceeded to the bar and had the bartender make one of each of our six specialty cocktails and send them to Houman. I also instructed the chef to send down a sampler plate of our appetizers for Houman and his guests to try. As Houman was preparing to leave, he asked me how much he owed. I thanked him for coming to Suite & Tender and told him the drinks and appetizers were complimentary and to please come back and see us again. He thanked me profusely and left. My cost on sending the drinks and appetizers was probably about $30.
Three hours later, Houman walked back in with five gentlemen dressed in suits and ties, greeted me and said they had plans to have dinner and he recommended Suite & Tender. As I escorted the gentlemen to their table, I overheard one gentleman in the party say, “Look, they have oysters here.” I went into he kitchen and had the chef prepare two dozen oysters and had the bar send out a round of Prosecco with the oysters, my compliments. My cost was about $35. The gentlemen had a great time and spent over $500 on their dinner tab that night.
Two days later, one of the gentlemen in Houman’s party came into Suite & Tender with his fiancé for dinner. His fiancé had such a great time and enjoyed the restaurant so much that she booked her rehearsal dinner at Suite & Tender for two months later and brought in 60 people. The night of the rehearsal dinner, the group had such a good time that over the course of the next few months, I recognized numerous guests who came back into Suite & Tender with their friends.
The power of compound marketing is like that shampoo commercial where someone tells two friends and they tell two friends and so on and so on.
All things being equal, in that you provide exceptional service and a high-quality product and treat your guests like the most important people that they are, compound marketing is utilizing your guest experience for them to do your advertising and marketing for you.
