13 Valuable Business Lessons The Ibiza Party Scene Can Teach You
From May through September, Ibiza is the place to be seen and experience the party of a lifetime. There is not a hotter, more desirable destination among the young, wealthy and elite than Spain’s Balearic Islands during this time.
If you check the social media accounts of the top celebrities during Ibiza’s opening parties, you will see that almost all of them are chartering private jets and going to take in the action.
There are two things I love: marketing and Ibiza, so I started to think about how they have turned this Island into the must-attend party destination year after year. How much do I enjoy Ibiza? Well, last summer I made two trips, so you could say that the lure and pure fun of the event has me hooked as well.
While I might not be some international celebrity, I can provide you with a little more insight on just how they grew this into the successful event that is has become today. The very same marketing principles can be used for almost any business, both brick and mortar and web based. Ibiza parties generate millions of dollars in revenue for the promoters and clubs. They have done such a good job at building the Island into an elite destination experience that it continues to snowball into more media attention and profits year after year.
These 13 valuable business lessons apply to the luxurious party in Ibiza, but can also be applied to your business, helping you reach a higher level of success.
So, sit back, get into party mode and let’s explore how and why Ibiza is such a cash cow.
1. Set your pricing so you don’t exclude anyone.
Even though the Ibiza party scene tends to attract the wealthy and affluent that are able and willing to drop insane amounts of money at the clubs, they still offer general admission tickets for those that simply want to see the artists and take in as much of the vibe and culture as possible.
They don’t make much money from these tickets, and it would be my guess that these people are taken in at a break even point. I would be willing to bet they do this to also help cover the act, as some of the top DJs can command $100,000 to more than $250,000 to show up.
These clubs are making their money from VIP ticket sales, drinks, tables, and bottle service. If you are knowledgeable of the current nightlife scene, you know that the top venues will have a table charge and a bottle minimum. So, in Ibiza, they might charge $10,000 for a table close to the DJ stage and require that the group buy a minimum of 10 bottles. If the average bottle is $1,000 they know that they are going to generate a very minimum of $20,000 from that single table. Since this is Ibiza, the spending is through the roof and people want to be seen as big spenders. The clubs enable these super wealthy individuals to put their ego on display, and profit nicely form the madness.
So, even though they could put that general admission space to better use by putting tables for big spenders, they understand that they must cater to everyone. Why? Well, someone that is a general admission ticket this year could find success and come the following year ready to spend more money. Also, word of mouth is priceless. All of those general admission attendees leave Ibiza and become a 24/7 commercial for them, telling everyone how amazing it was. That leads to more attendees and hype, at not cost to the promoters.
Try to make your product or service available to everyone (in some capacity) and you will be rewarded.
2. Cater to your top spenders (to encourage more spending).
As I mentioned above, you need to make your product or service available to everyone, but at the same time you need to understand where the bulk of your revenue comes from. In Ibiza, that comes from the wealthy party attendees that are buying tables and bottles.
A lot of people think that the celebrities would be the bread and butter, but that isn’t how it works. If anything, they eat away at the profits. How so? Well, the celebrities aren’t spending money. They show up and the promoters hook them up with a table and provide them with free drinks. They do this to attract their real big spenders, who are the wealthy regular people, there to mingle and be seen.
So, if Beyonce and Jay Z show up to Ibiza, a club owner is going to want them to attend their party. Sometimes the celebrities are even paid an appearance fee to show their face. Believe it or not, if Jay Z and Beyonce were at a VIP table, that club would have no problem finding some super rich billionaires to pay a million dollars to have a table next to the celebrity power couple.
Then, when they sell those tables they do everything they can do to kiss their ass and make them feel like royalty. They want to massage every single dollar out of them as possible. They have beautiful women bringing them their drinks and providing every luxury service imaginable. There is nothing that can’t be obtained in Ibiza, and the successful promoters make sure their deep pocket spenders get anything and everything they want.
So, while you want to provide excellent service to every customer, it’s important to know who your big spenders are and give them extra attention. If you lose them, it’s much harder to replace them then it would be an average spender.
3. Track all marketing efforts, even non-digital.
We all know that it’s important to track where our leads and sales come from online, but what about offline? There is no Google Analytics or tracking pixels in the offline world. You just have to get creative, and when you do that its possible to track results, giving you the same ability to scale and optimize your marketing efforts.
Ibiza is a perfect example of how this doesn’t have to be difficult at all. For those that have been to Ibiza, you know that there are promoters everywhere, handing out flyers to events and parties, hoping to draw people in the door. They are paid for every person they send through. This also happens in Las Vegas. There are people on the streets trying to get you to go to the shows and events they are promoting.
They will often put a wristband on you and tell you to show that at the door for a discount. Well, when you do that, the club is able to determine where you came from. With special markings they can determine what promoter pulled you in and what location they were promoting at.
With this “data” they can find out what promoters are doing a good job and what ones need to be fired. They can also determine what locations are bringing in the most traffic through the door. So, the “optimizing” phase would include taking two high performing promoters and placing them in an area that sends a lot of visitors. This can now possibly lead to even more club attendees.
The trick is to keep it as simple as possible and don’t try to over think how you can track your marketing efforts. Something as simple as wristband marketing is responsible for generating hundreds of millions of dollars in Ibiza!
4. Satisfying current customers is easier and more lucrative than chasing new ones.
Retouching on point number two above, catering to your top spenders keeps them happy and coming back. If a millionaire is treated like a king and has the time of his life at Ibiza, don’t you think they will be back the following year ready to spend even more money? Of course they will!
Every business has a cost associated with customer acquisition, and it is usually not cheap. So, it’s important that once you acquire that customer you keep them happy so they stay a customer. Your profits will increase dramatically when you eliminate the acquisition cost linked to each person. Not only that, but the larger profit margins allow you to really scale your marketing and increase your customer base. This is how large scaling happens and when you have this down your business will grow exponentially very fast.
You don’t have to go to the same extremes that the Ibiza party promoters use to keep their clients happy. But, little things like a coupon code or an email to let them know how much they are appreciated can go a long way.
This is even more important when you have a subscription or recurring payment product or service. If a department store keeps the customer happy there is no guarantee that they will return to make a purchase every month, but if you have a recurring product or service, like a gym membership, for example, you need to make sure they are happy or they will go join another gym. It is always cheaper to keep your current customers happy than it is to go find new ones.
5. Joint ventures and partnerships can provide big returns with very little to no out of pocket expense.
If it makes sense for your business, explore partnerships and joint ventures, because it can lead to revenue every month without sourcing a single customer.
In Ibiza, there are many clubs that cross promote for each other. For example, if “Bora Bora” is hosting a day time party, they might partner up with a club that is hosting a night party such as “Space”. Since they aren’t competing for the same time slot, they can team up and push their audience to the other event, while attracting attendees from the other event.
Social media is huge when it comes to Ibiza, and the top promoters and parties have a huge following. A single post can reach thousands, and when they are retweeted and shared it will eventually touch a very large percentage of the partiers. Social media is definitely the top means of communication during Ibiza. Not only is it a great way to stay up to date on the festivities, but everyone likes to post some humble brags. “Hey, look at me.. I am in Ibiza living it up!”
I’ve used this tip to help grow my agency. Rather than just selling to the end customer, we offer our services to other SEO agencies and also have resellers. So, we get business and customers from these two outlets every month without spending our marketing money. Now, we can use all of our advertising money every month to attract regular customers, while our agency partners and resellers continue to bring more business to us. Our partnerships are highly responsible for our fast growth.
Referral programs and affiliate programs are very easy to set up and manage, so if it makes sense for your business model I would suggest you explore it.
6. Social media influencers (paid or not) give your business or event the most exposure.
I mentioned Jay Z and Beyonce above, and you can really throw any mainstream celebrity, DJ or whatever in that situation and it’s going to be great exposure. Ibiza really grew in popularity because of celebrity influence and exposure, and it wasn’t paid.
Social media allows everyday people to peek into the lives of celebrities, DJs and so on, and they post often because they have such large followings. It keeps them relevant and fresh. Ibiza isn’t something new. In fact, it has been going on forever. It’s always been a destination for celebrities and the wealthy.
A lot of Ibiza’s successful party season was due to the social media exposure celebrities and DJs gave it. Now, when celebrities show up they almost expect to be treated like royalty and not pay for anything. They know that their presence alone is going to make the clubs a lot of money. Some even demand to be paid to show up and many clubs are willing to do that because they are almost guaranteed social media exposure.
If you are selling a product online, give social media influencers a shot. The prices are getting out of control, but that’s because the demand has increased so much. The demand has increased because it works.
Think about how much money you have to spend per click on AdWords. Let’s imagine that you are selling web design services. You might have to pay $20+ for each click to your website. Now, you find a social media influencer that has a huge audience of business owners and entrepreneurs and you get them to post an offer for you. Imagine if it cost you $1,000 for them to post to their audience of 2.2 million, but it results in 250 clicks. That same traffic that just cost you $1,000 would have cost you $5,000 on AdWords and that PPC traffic is cold. When traffic comes from an influencer it’s warmer, because they trust the person they are following. This eliminates the barrier of skepticism and doubt.
Give it a try. Every niche can find influencers, and don’t focus only on follower count. Engagement is much more important.
7. Presentation is everything.
One of the reasons that Ibiza exploded in popularity is because of the setting. It is beautiful and one of the most stunning Islands you will ever see. While the partying is epic, the setting makes it that much more amazing.
The party promoters have a background that really makes it seem even more exclusive and special. If you moved the entire Ibiza experience to a Potato in the middle of Ireland would it have the same success? It would be a huge disaster. Nobody would talk about it or post pictures on social media. Nobody would want to make travel plans to party in a Potato field under any circumstances. Their presentation is a major key to their success. A solid presentation makes customers want to do business with you.
If you are a brick and mortar retail store you need to make it very inviting and comfortable and present your merchandise in a way that entices the customers to buy. This is why merchandising is such a huge industry. The way items are displayed trigger impulse buys and can make or break a retail space. If you are in a retail setting you are already up against online stores that are more than likely selling for less than you, so your presentation needs to suck the customers in.
If you are an online business then your website design needs to be amazing. I can’t tell you how many times I see an e-commerce store that looks horrible approach my agency wanting SEO. The website designs are often so bad that even with all the top rankings they would still do zero sales. Spend money on a great design. You have to appear as good or better than the top competitor in your niche.
8. You have to be willing to spend money to attract the right customers to your business.
Ibiza makes hundreds of millions of dollars, probably billions, year after year during the party season. They lure in the people from around the world to pay outrageous cover charges and buy over priced bottles of liquor. How do they do it? They spend money.
The clubs that throw the events are bringing in the top DJs from all over the world to spin. Many of them command set fees of $100,000 to more than $250,000 and that just covers a couple hours. So, a major event is going to have a few opening acts and then a few major headliners. A single night could cost well over a million dollars just for the DJs.
But, without spending that kind of money the events wouldn’t create the buzz they do, therefore not attracting the big wallets.
The same mentality needs to be used in every business. If you have an e-commerce website you have to spend money to make it eye appealing and convert well. Then, to bring traffic you need to invest in SEO, social media, PPC and even display ads. You can’t just put up a website and expect people to find it without pumping money into promotion.
I attract the majority of my larger clients on social media. While my content doesn’t essentially cost me a specific dollar amount, it does take time away from running my agency, so there is a cost. I then pay to promote my posts across social media. This brings traffic to our website and also helps to brand us. While we generate a lot of revenue, we are also spending an absurd amount of money on promotion and advertising.
9. Location is everything: physical brick and mortar or online SERPs.
I already mentioned how Ibiza’s location plays a major role in its success. Well, location plays a huge role in the success of every business, not just a party festival.
If you have a brick and mortar store, you need to be located where your customers can easily get to you and you want to be in a highly visible area to attract new business. Would you want to be in a rural area away from traffic and the highway? Of course not, because nobody would know you exist and those that did wouldn’t like the inconvenience of along drive away from the major roads. A storefront on a busy road with a lot of traffic will benefit you in two ways: make it easy for your customers to get to you and help attract new customers that drive by and see your sign day after day.
Online, a top result in the SERPs is going to mean everything. If you are ranking #1 for all of the buyer keywords for your niche you will do very well, but if you were on page four of Google nobody would ever find you.
10. The safety of your customer must always be a top priority.
Ibiza is crawling with security and Policia. They want to make sure that their guests feel safe to the point that they are able to relax, enjoy themselves and most importantly (from a business standpoint) spend money! Celebrities and high net worth individuals aren’t going to show up to events if they are packed with troublemakers and scum.
This is one reason the biggest parties have a high dollar entrance fee, even for general admission. While a $100 general admission ticket might not exactly be cheap, it’s a far cry from the minimum table fees at some parties. It’s low enough that people will buy it to experience an Ibiza party, but also high enough that it will keep out a lot of the troublemakers.
For a retail store, little security elements like a well lit parking lot and security cameras make people feel more comfortable shopping with you. Online, things like https and merchant processor security certificates give your customers the confidence needed to input their credit card numbers on your website. Things like privacy policies and statements regarding how you store their personal information can also help convert more sales.
It doesn’t matter if you are an online store or have a shop on a busy highway. When someone visits for the first time you want them to immediately feel comfortable. Have you ever visited a website and found a great deal but didn’t buy it because you weren’t sure if the website was legit? It has happened to me several times and I ended up just going to Amazon to buy the item. The big sites do well in part because of their prices, but their name and trust level help as well.
11. Provide the best products or services.
If you look at the headline acts for Ibiza you will see every big name DJ you could ever think of. They all play Ibiza and they all get paid very well for their time. It has become such a status event, that even DJs use it as a social ladder. For them, to be able to say they headlined at Ibiza is a major promotional tool, allowing them to command even more money for local gigs.
The Ibiza promoters run the events as if it was the best party events in existence. Are they? Well, that is personal preference, but I would say they’re some of the most popular, that’s for sure. They give their attendees the best performers at the best venues in the world. There are no shortcuts taken and they don’t cut corners on production value. No expense is spared because they want to provide what in their mind is the best experience to be had.
If you are a local sandwich shop you need to provide the best products. In this situation, the freshest bread and highest quality meat. Could you save money by using frozen bread and cheaper meat? Sure, but it would push a lot of good customers away. People will gladly pay a premium for quality, and it honestly took me a bit of time to realize this myself.
I started to publish quality content and my SEO agency started to attract quality customers, willing to spend money for the best SEO service. When you provide the very best, you attract the very best, all willing to pay a premium for quality.
12. The reputation of your business is entirely dependent on the experience you provide, whether good or bad.
Ibiza has a reputation of being an amazing place because of the experience provided. Guests are treated to an amazing party and everyone has the time of their life because of the effort put out by the promoters and clubs. They have built this reputation because everyone that leaves has the same thinking: they just experienced the best party and they can’t wait to return.
If they suddenly made a drastic change and didn’t bring in the top DJs and the experience was a bad one people would start to talk and its reputation would go down the toilet almost instantly, completely ruining the imagine of the Ibiza party season.
Above, I mentioned providing the best product or service, but that alone won’t result in success. You could have the best product or service, but if you are a complete asshole to your customers your business will develop a bad reputation and it will suffer.
When I work with clients I am focused on building a long term relationship. I treat every customer of my agency with respect and learn as much about them as possible. While the service we deliver is top notch, it’s the way we speak to our customers, the fast response time when returning phone calls and emails, and the overall customer experience that has helped us grow the agency extremely fast.
The only way you are going to find out if your customers are satisfied with the experience provided is to ask them. An online store can send out a survey to their email list and offer a discount code to those that complete it, and a retail store can bribe customers to fill out a brief survey at the checkout process in exchange for a discount. I have even seen businesses hand customers an iPad while checking out, which had a few questions to answer.
Just like you optimize for increasing sales and conversions, optimize to improve the customer experience your business provides.
13. Make it easy for your customers to purchase from you.
Ibiza is such a huge event now that you can purchase tickets for opening parties and select clubs online through multiple ticket brokers. It’s evolved into such a big deal that people book far in advance. It’s very rare for people to randomly go there and stand in a line for admission. It’s such a big event that it’s pre-sold far in advance.
They make it simple to buy, as long as you have the funds.
I can’t tell you how many websites I have audited throughout the years that made it nearly impossible for their customers to make purchases. If you are selling a physical product, there is absolutely no reason to make the customer call you or fill out a form. That’s an extra unnecessary step that will just drive them to go buy form someone else.
Sure, have live chat and contact options available for those that have a pre-sale question, but don’t make it difficult for those that already have their credit card in hand ready to make a purchase.
To dive in even deeper, don’t make them register an account or input too much information. Know why Stripe is one of the most popular payment gateways? It only asks for the buyer’s name and credit card number, allowing a purchase to be completed within seconds. A little box pops up, they enter it and they are done. The first thing a customer thinks when they are asked to create an account is, “Oh great, they are going to spam the crap out of me with advertisements and offers.”
Let them purchase from you quickly and they will return for more effortless shopping.
Even if you aren’t a party head and have zero desire to ever experience what Ibiza is all about, you can still take something away from what they have created. It doesn’t matter if you own an SEO agency, an online business, or even a traditional business like an electrical company; everyone can use these thirteen tips to improve how they market and brand their business.
When you step back and look at the big picture, you see that all successful businesses thrive and succeed when the basics are mastered. None of these tips are exclusive to Ibiza and international partying. They can be applied to any business to experience improvements.
If you have anything to add or have any specific questions, please leave your feedback below. Also, if you are planning on attending Ibiza this season let me know. Maybe we can link up and have a drink or two!
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