What's with the Strip Club Business Model?

avatar for dustyshoes
dustyshoes
Illinois
Most strip clubs are woefully mismanaged. They almost all have websites that they totally ignore after they are set up, no schedules, holiday hours missing, old pics, etc. There is also an antagonistic relationship between the dancers and management. They fine the dancers for the most mundane thing, missing a shift, being late, allowing ass grab in private dance, reading a text. Now make no mistake, all of these things can be abused, but in general, there needs to be a common goal among management/employee.

Management sees it profitable to charge high entry fees, high drink prices, and higher dancer drink prices. The dance prices continue to escalate, the songs get cut, the number of customers drop, the number of dancers drop, and the profits drop. Their solution seems to be, raise the entry fee, raise the drink price, raise the dancer drink price, raise the dance price, and fine the dancers more. Result: Death Spiral.

Would it not make sense that the club's job would be to get the customers in, and the dancers would keep them there. There would be enough money walking through the door to satisfy both. Don't fleece the customers as they walk through the door and buy the first drink. I myself have walked in, been charged an entry fee, ordered a drink, and find, no dancers, price of the drink, and said sorry, I'm out of here. Why would I pay that kind of money to have a beer in a small country bar alone? That's stupid.

Meanwhile, the dancers need to remember that they are independent business people. They need to be at work every day, the same as their customers. They need to understand that sales depend on meeting customers needs. Nobody in there is obligated to give them a tip just because they stop by and demand one. Nobody is obligated to buy a dance because they happen by and say "you wanna dance". They also don't seem to know that customers are just as money conscious as they are, is it too hard to realize that instead of $25 for the 2nd dance, 2 for $40 may get them a higher net for the shift due to the fact that she would probably dance for more customers? What some dancers are willing to do during a dance obviously differs from what others are willing to do. The result of which usually provokes badmouthing of each other. They need to understand that the customer demands are what makes the difference, and if they are unwilling to meet the demands, they need to find an occupation that they are comfortable with.

Now, keep in mind, that the laws of the local town, and state, regulate a lot of what goes on inside the club. The dancers need to respect the fact that the management needs to maintain their liquor/business license, and they are allowed to make reasonable requirements of employment. Regular attendance should be required. The management need to respect the financial needs, and, like any other business, the employees, are commonly single parents and have unplanned issues arise occasionally, and need to change their schedule.
The bottom line is, the customer controls the money. If their needs are met, they will remain customers and spend their money. If there is a better deal down the road, the money will follow the better deal. Also, strip clubs are not the only means of entertainment, and as such they cannot collectively survive if there is a better deal, either perceived, or not, elsewhere.

15 comments

Jump to latest
avatar for Papi_Chulo
Papi_Chulo
11 years ago
Nicely written - concise and to the point.

Personally; I *have* noticed a difference b/w how the upscale clubs and dives are managed with most dives being very badly managed.

I assume many of these “managers” at the dives only qualification is having a pulse – they have zero business sense if any sense at all and have less-than-zero/negative-# people/social skills.

Your comments about clubs fleecing custies is something that has been on my mind and it’s probably a major contributor why SCs are not what they used to be and why so many may be struggling financially. Times have changed and we are still recovering from a pretty devastating economic situation of a few years ago – and there is also more competition for the sex/entertainment dollar – most SCs do not seem to be adjusting correctly to the new realities.

Nice write-up - you should post it over on stripperweb.com in the “Customer Section” so the folks/dancers over there can have access to a well expressed customer viewpoint.
avatar for skibum609
skibum609
11 years ago
Great article and the way clubs are managed drives me crazy. One club in an attempt to enhance business started doing 2/1 dances at the bottom of every hour. Good in theory, but if it hit 8:05 the dancers knew no one was getting a dance for the next 25 minutes and they acted deflated. My suggestion was put on their website that there would be a "surprise" 2/1 every hour. Just randomly announce them and see what happens. I was told to myob and they never even asked how or why I came up with it. I would have told them the Booby Trap in Pompano used to have unannounced $5 dance specials and that they usually led to more dances and were very popular. One club where I go (Desires, Providence) gets it. They cater to regulars and other customers. Private club upstairs with a membership fee that the dancers can only go to if invited by a member. High class restaurant with great food. Smoking patio. Covered. Bar outside. Grill food in the summer. No cover until 8 pm.(best business idea ever). Free shot every hour until 7pm. Staff always handing out free drink cards to spenders. Buy a customer appreciation drink card for $20 and it comes with $25 in drinks loaded. An owner who was a front man in a family Italian restaurant and acts the same way here. Add in pretty dancers and privacy and the business takes off. Why is no cover to 8 a great idea? Shift changes makes 6- 7:30 the worst time at most clubs. I won't pay a cover to sit there at 6:30 so I go to Desires. By the time the clubs have a full contingent of dancers I have had a free shot or two, a free drink and a cocktail so I am not going anywhere. I avoid a ten dollar cover, they get $30 in liquor business and a customer until I am done.
avatar for Papi_Chulo
Papi_Chulo
11 years ago
To piggyback on skibum’s 2-for-1 comment – in yet another way to take advantage of custies – I’ve noticed more often than not - that in most 2-for-1s; the songs are invariably shorter than the regular LD songs.

Some, custies or club staff; may say this is ok b/c hey you are getting a discount – but to me; if you are going to give me something; give me what you say you were gonna give me – don’t be a cheap ass and short change me.
avatar for mjx01
mjx01
11 years ago
2/1 is counterproductive IMO, because cusite start holding out until 2/1 is offered
avatar for mroo
mroo
11 years ago
The answer to the original question posed in the title: multi-level marketing.

The club's true customers are the people who rent the stage space. They are the ones who bring in the subsidiary income from food and beverage sales from the second level.

That is only true for legitimate businesses- many businesses are obviously fronts for other activities. While drug distribution and prostitution are usually the first things people will think of, it's pretty clear that the other activities mostly involve gambling, money laundering, and tax evasion in my little corner of the world.
avatar for trixxi
trixxi
11 years ago
Great article and thoughtful comments!!! I prefer the dives with the lower stage fees as the upscale clubs often take a large cut of dancer earnings whilst having less frequency of customers as the dives. I think others in town see the value of the dive too ... in regard to 2 for 1 at the dive DJ-less club and girls selecting songs on winamp leads to much longer song averages ... compound with picky dancers changing songs midway, I have given several 30 minute 4 songs lap dances. Once the song gets cut by another dancer I pretty much consider it on the house.
avatar for Papi_Chulo
Papi_Chulo
11 years ago
“… Once the song gets cut by another dancer I pretty much consider it on the house …”


That is refreshing to hear and often not the norm; IME.

As a dancer once posted on TUSCL – “strippers don’t do anything for free”
avatar for trixxi
trixxi
11 years ago
I am not sure if it is really good business model ... but I give out free lap dances reguraly. I know that by giving away some dances I am going to gain customer appreciation, which I see as more important for the long term than having the $20 immediately. Thanks Papi I always enjoy reading your comments ;)
avatar for Lone_Wolf
Lone_Wolf
11 years ago
I think SC's have a very outdated business model that had better change or these clubs and dancers will continue to realize reduced revenue.

The SC model has been successful for so long because it was pretty much the only game in town. As little as ten years ago, if a man wanted the intimate company of an attractive woman his only option were SC's or the high risk rolling the dice on unknown escorts or MP's.

Now, there is so much info on the internet that using escorts and MP's could even be considered a safer bet, with better value, than a SC.

As the OP pointed out, in response to dwindling revenue, the SC's and dancers have increased the practice of fleecing (hustling) the custies harder than ever. This does nothing but drive well paying customers out of the SC's perpetuating a downward spiral.

The SC business model needs to morph into something that provides value for a customers dollar. How that would look or even if it is possible, I don't know.

Bottom line though, it is getting harder and harder to rationalize spending hundreds in a club when I can find far greater value with much less fleecing and hustle outside of it.
avatar for Mistoff
Mistoff
11 years ago
Entrance fee reduce traffic - number of guys in the door. But not necessarily revenue - guys who buy dances. Mandatory drink is stupid, but entrance fee keeps deadwood out. Keeps bums just wanting a warm seat and a view out. And free entrance often available if you print coupon (also not something a bum would do) or if guy handing out coupons in some cities thinks you look like money.

I've gotten entrance fee refunds when there haven't been enough dancers and I asked for it. Never been refused.

Dancers aren't necessarily brainiacs. And don't dance long enough to learn great selling technique. When I see a gal I'd like a dance from, even if she just got there, I go ask her. Got some incredible experiences that way. They like being wanted too.
avatar for Alucard
Alucard
11 years ago
The Clubs have somewhat Stupid owners who hire Dumb and unimaginative management.
avatar for inno123
inno123
11 years ago
I've been advising a new club manager and it is surprising how much conventional thinking there is...doing things the way everybody else is doing it or the way they presume it has always been done. I've been trying to get him to look outside the box by thinking from things from the standpoint of his customers and his dancers.

Have a fee at the door but have some value to it. Include a free topless dance (the slogan I wanted to give this was 'Free Samples!') or a free drink setup. Presuming a non-alcohol place don't give a tiny cup half full of ice, bring them a full chilled can or bottle even on premium energy drinks!. You save on labor, equipment, and cleaning, and the guy thinks he's getting a great deal paying five dollars for something that cost you on average one. Don't have a high dance price if you are constantly going to have to offer specials. The customers will quickly learn to sit on their hands until the special and the girls won't bother either. Let the existence of specials be something the dancer negotiates wtih the customer one-on-one. Which brings me to maximizing the interaction between the dancers and customers and minimize the involvement of anybody else. There is no bartender or waitress or hostess (remember, full cans only) only performers and managers. The girl that helps greet you at the door and walks you to your seat says "I'll be on stage in just a moment, would you like to maybe have a private dance after that?". The girl that brings you your drink says "I'll be on stage in just a moment, would you like to maybe have a private dance after that?". Guys are naturally more attracted to what they can't have compared to what they can. That way the dancers have the guy's attention all to themselves.

In the big picture you can set up a culture in the club where this is a real job with real customers that need to be taken care of or that this is a big racket where horny men are suckered out of their money. If that attitude takes hold then the dancers will also be looking at how to sucker the club the managers how to sucker the dancers and everybody looking at how to cheat the owner.
avatar for knightwish
knightwish
11 years ago
@dusty --

I think you are forgetting a few things in your analysis. But let me point out the biggest. If the Strip Club owners turn the dancers into regular employees then acts of prostitution by them become acts of pandering for the owners. Pandering is a felony. The problem here is the law. Most jurisdictions are hostile or off and on hostile to clubs and club owners. They have justifiable fears of doing what you suggest. Also in terms of the strippers being at work daily on set schedules... most girls do dancing because it offers them freedom. Take that away and you take away one of the main reasons they decided on the job.

In terms of financial models that make sense I think clubs need to diversify their models.

Fetish / foot parties for example frequently use a $50 door charge (includes some food) mixed with $20/10 minutes for play. Girls don't have to tip out nor pay a percentage. Anybody paying $50 to go through the door is planning on buying playtime so there don't have to deal with time wasters. I don't see any reason some number of clubs couldn't switch to this. Many of the women who work in SCs would be very happy to be reliably pulling down $100 / hr. GoGoRama in NJ with their deli style approach is an example of a very successful club (relative to the size) that does this moderate reliable strategy well.

I think you are recently seeing a surge in clubs with higher admission and an emphasis on alcohol, VIPs and large stage tips. I think that's another good financial mode.

I think a return to clubs that mainly sell alcohol and food where the dancers make moderate stage tips but have low contact (Penns Port pub for example) might work. Obviously ultra high milage clubs, is a reliable working model.

Diversify customer bases and diversify clubs so that different clubs become more different from one another and don't complete as much.
avatar for Dancinggal
Dancinggal
11 years ago
I just wanna know, in the idea above, that says an entrance fee comes with a free topless lap dance. Haha. Haha. What? I don't think many strippers would do that.
avatar for h526
h526
11 years ago
Thing that baffles me is that most clubs only do a special costume night once a year (Halloween). If clubs did a "Halloween in July/June/August/whenever" I know they'd get more foot traffic.
You must be a member to leave a comment.Join Now

Want 4 weeks free VIP to tuscl?

Write an article