The Economics of Stripping
Everything I ever needed to know for business, I learned in strip clubs.
Over the years, I have spent my fair share of time in strip clubs. Mostly for fun, but sometimes for business, every strip club I have ever been to (no matter the physical location) tends to have the same formula.
A main stage for the feature dancer or the a rotation of dancers; a series of smaller tables with chairs (always on rollers); a private VIP area and a set of private rooms or stalls for the girls to perform private dances.
Most strip clubs seem to do relatively well financially, and other than Las Vegas, seem to stay in business regardless of economic times.
But, thats not what interests me.
Whats interesting to me is how the dancers themselves work. Each girl is a little mini-business and a entrepreneur in their own right.
In the past two years, I have gone to two separate clubs. One in Dallas and one in Las Vegas. Each time was for an extended period of time (Dallas was about 5 hours, and Las Vegas was about 3 hours) completely sober (yeah, dont ask…).
I spent the majority of my time in each one watching the girls interact with their customers. (And to be completely fair, I spent my fair share of time with the dancers themselves.)
Here is how it works for me:
- I sit down at one of the smaller tables (never at the stage. mostly because the dudes sitting around the stage are pretty slimy).
- I order a red bull (there is usually some sort of drink minimum);
- over the next 30-45 minutes, dancers will tap me on the shoulder and ask if they can sit down and talk. I tend to refuse (mostly because I want to get settled in, and to a certain degree have to get up the courage to interact).
- Finally, once I am ready and I find a girl that is attractive to me, I will accept the invitation to sit down.
- We talk for a bit, she dances for a bit, and then she usually pitches me on a private room, which I refuse, and she eventually moves on.
- Then the process repeats.
- Sometimes, a particular dancer and I will get along and she will either spend an inappropriate (remember she is there to work) amount of time with me, or kinda swing by periodically through out my time at the club.
- This seems to happen more often than one would expect, and through out the night, I tend to learn all about the dancer’s history, family, etc. In Dallas, I learned that the girl was a blogger and had spent time in Thailand working with Amnesty International on some sort of drug case. (I just remember it was very Midnight Express). Another dancer came from a family of dancers. Both of her sisters and her mother danced at a rival club, but since she was only 18, she couldnt dance in a club with alcohol.
- At the end of the night, I leave. After all, it was just a night at work for her, and usually, a night at work for me too.
- (if you are wondering, I used to get a lot more stripper phone numbers than I do now. Probably because I am sober.)
I have often wondered why one particular dancer over another would select me to engage with. Was there something in how I carried myself? Was it because of how I looked? What was it?
The process of customer selection by the stripper is really interesting. I spent a lot of my time these past two times at a club really watching the process.
1) Dancers seemed to be more likely to talk to a customer that had just walked in. Almost before he could get settled.
I imagine that this is due to the fact that new customers have the potential to have the most money. After all, if the dancers are good, most of the customers that have been there for a number of hours are probably tapped.
2) Dancers tend to approach the same type of men. This is more pronounced by the race of the dancer.
Each race of stripper tends to have a similar shtick. I know that sounds racist, but it really makes sense. If men are attracted to certain types, then those type of women will learn that they get the biggest reaction from those type of men, when they act in a certain manner.
For example, I seem to predominantly attract minority dancers. Sometimes a heavily tattooed white stripper will swing by, but almost never the “all-american” types. Makes sense given my general look and the tattoos.
When Asian stripper approach me, they often talk about how much they like a “big man,” Latino and Black strippers will comment on “how strong I must be,” and tattooed strippers, of course, talk about my tattoos.
3) Every action, including feigned interest, is designed to generate revenue.
There is not a single thing a dancer does that isnt designed to separate a customer from his money. A stripper looks at their time at the club as revenue/minute. When they arent hustling, they are losing money. Its that simple.
In New York City, the famed club Scores is a master at this. First of all, all cash is converted into “Scores Dollars” which is not a 1:1 direct conversion. Then, every 30min or so there is another Scores product to buy (Calendars, videos, tshirts, etc). Even drinks can be bought with the funny money. Also, you can only buy “Scores Dollars” in groupings of $10 or $20 (I think). But, nothing works out to a round amount, so you are either sitting on the sidelines, or buying more fake money. Ingenious.
4) Customers that are cheap or refuse the company of a dancer, will soon find themselves completely shut out.
I doubt there is a bulletin board in the back room that states “skip the dude in the black shirt with the tribal tattoo,” but there is an almost natural way that dancers mark a customer as a dud. It could be the drunk guy, or the extra touchy-feely guy. Or just the guy that doesnt seem to pony up enough cash quickly enough. But, it happens, every single time, there is some guy that just gets shut out.
5) Customers that feel special will spend more money.
There is a real connection between how valuable a customer is to the dancer and the amount of attention given by the dancer. Have money? Continue to get smiles. Get too drunk? See the dancer move away. Pay for your friends? Get attention. Get your friends to pay for you? Nada.
It is a set expectation when you enter a strip club that you are entering a business establishment with unwritten rules for conduct and transactions. Want attention? Spend money. Its that simple.
So, how do I apply these five rules to business?
1) Dancers seemed to be more likely to talk to a customer that had just walked in. Almost before he could get settled.
Be attractive to new customers, but understand its easier to keep the regulars. Make sure that new customers immediately feel important.
2) Dancers tend to approach the same type of men. This is more pronounced by the race of the dancer.
Know your market. Explain your value in an easy way, that is understood by the market you are selling to.
3) Every action, including feigned interest, is designed to generate revenue.
Always be generating internal value. I used to tell people that worked for me that for every dollar I paid them, they should generate three.
4) Customers that are cheap or refuse the company of a dancer, will soon find themselves completely shut out.
Dont waste time on customers that will not generate revenue or internal value. ‘Nuff said.
5) Customers that feel special will spend more money.
Make the right customers feel special. Have a VIP list. Be transparent about the value specific customers bring.
All I ever needed to know in business, I learned in a strip club.
Its really that simple. There is not that much different between a dancer in a strip club and a startup or huge multinational corporation. One just ends up with all your money at the end of the night, and the other gives you lap dances and covers you in glitter.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=90dba7f2-d6cd-488e-80f6-1991ccf1e7c3)
Popularity: unranked [?]
I thought this post was gonna suck, but it didn't. I stuck it out and you brought it around to the points. Nice work.
I thought this comment was going to suck, and it did. :) thanks, dude.
Haha only you can pull something like this together. It has a very “freakonomics” feel to it. Good work.
Nice work dude. Quite entertaining.
Dear Micah,
Sometimes you display sheer brilliance.
Like now.
Much love,
Kate
Love it. Thanks Micah for the work break chuckle. :)
- annie
I'm just waiting for a Micah-approved MBA course. I wonder what'd be in the next session…
LOL. Should I continue with Economics of Drug Dealing?
That was a great read. Like the way you closed it out and made your point. Well done.
And for some reason, when you go in with your wife, they're all over you.
And in case you are not aware, the economics of the clubs are very interesting (and attractive to business owners).
The girls PAY to dance. As soon as they walk in the door, the club charges a flat fee to each girl.
This causes a few things. #1, it's a control to make sure the club gets money. #2, it causes a club to NEVER reject a girl. #3, it becomes a natural selection of girls. Meaning, if the girl isn't good looking enough for the club and isn't making enough money to cover her upfront closes to work at the club, she will naturally go work at a lower rate club.
The economics of the club are interesting as well. They are very similar to barber shops, salons, tattoo shops, etc. Although many clubs have different economic models. You have outlined the most basic. The part that I disagree with is that clubs are somewhat selective (depending on the “image” the club is trying to present), primarily because the better the dancer the more booze, etc a patron buys. All of that money goes straight to the club…
Completely awesome and spot on. Does the 80/20 rule also work in strip clubs? I hope you get an Ignite Boulder presentation together for this!
But tell me how you are going to difference or recognise this one in internet world – “4) Customers that are cheap or refuse the company of a dancer, will soon find themselves completely shut out.”
I have a blog which show latest gadgets and I put adsense in that. In such case how I will be able to recognise the right customer.
Dude, this was sheer brilliance. Only you could cleverly craft what would otherwise be a dirty, slimy recount of your trips to the strip clubs into a business lesson. By all means, bring on the economics of Drug Dealing!
In the content business, there will always be customers that consume
your content without payment. Just the nature of the beast. but, if you
are in the content business with an intent to turn a profit, you will
begin to generate content that does this best. In essence, readers are
self-selecting the content by engaging in the ads. The dead beats will
probably (at least some segment will) stop getting content that is
interesting to them and find other places to consume that content.
In a one to one relationship, its much easier to see and react to the
best customers (or the worst), in a one to many anonymous situation
(blog on the internet) it becomes much harder, and one must shoot for
the mass effect rather than the singular.
The skills of a stripper go far beyond simply pitching. They have segmented the market and have tailored their pitch/message to each of the different segments. For example, you better believe that a girl is going to communicate differently with the single guy in a business suit (probably a business traveler) sporting a wedding ring vs. the young frat boys vs. the guys who come in a group for a bachelor party (and so on). These girls are saavy, and can probably teach a thing or two to professional marketers.
That was spot on.
Nice, you should probably write for us to do field research. Funny how i've met 2 persons that explain the economics of strippers, yet they are not strippers.
Ive never been asked to do field research before. I imagine that the strippers themselves dont really care about the economics outside of the basic supply/demand construct.
Ive never been asked to do field research before. I imagine that the strippers themselves dont really care about the economics outside of the basic supply/demand construct.
For me field research is just going to any strip club :) There are some guides and books out there about how to make money stripping, thedancersguide.com by Kasey Coles is one of the most famous. Yet, he's a man. I
Well I am quite agree with you and you have compare these two business perfectly. But don't you think that in strip club, girls able to see and read body language and face expression as well. This is not at all possible in internet business.
Your review about my question.
For a blog post with a scandalous use of an example business, this was an incredible lesson in marketing and focusing in on your target. I've experience most of these examples at a strip club (except for the phone number thing, of which I bow down to you), and never broke down the principles in terms of business the way you have. I'll be applying these to my own business, thanks for the insight.
If you want to learn how to sell from the masters, go to a strip club.
Be sure to leave your charge cards far outside the walking range and to carry no more than $50 in cash with you. $30 is just not enough for fun as the cover fee will eat most of it. $50 can last quite some time for stage tipping.
The dancers' sales and customer targeting skills are second to none. I worked in a car dealership, where I could literally make you give me your trade-in car for free, but they are above that level. Every objection you will raise is something they have heard before countless times and to which they have well-rehearsed responses. I tipped a few dancers for particularly good seduction techniques.
In a semi-dead club, the conversations can be interesting. And there are endless stories…
Unfortunately, rarely do I see dancers that actually perform an elaborate dance. I tip for acrobatics. The better trained dancers also tend to have more interesting stories. The ATM machine comes with a $10 fee, for example. Then there is the fuzzy math and “inaccurate” accounting and the separate of “this is my fee, and this I need to pay to the house, so I need to ask you for more”.
Some do go too far and engage in bait and switch. Same as any other business they net less revenue ultimately. Of course, there are also review sites for each dancer. :)
I find the overall atmosphere fascinating just watching others get completely drained.
I just came across this article. It is a perfect example of why I teach new entertainers that the “Wanna Dance?” approach is not the way to become a SuperStripper!