Beware ‘Hotel California’ brands – those you can never leave

Rory Sutherland writes in his book Alchemy about what he calls the two different approaches to business.

There is the ‘tourist restaurant’ approach, where you try to make as much money from people on a single visit; and the ‘local pub’ approach, where you may make less money per visit, but more over the long term by encouraging people to come back. Sutherland believes the local pub approach is more likely to generate trust and yield positive outcomes.

I would like to propose a third approach. Its real name is the subscription model but I like to call it the ‘Hotel California’ approach because, as in the song, you can never leave. And it is booming.

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