Who Pays More for a Customer in Las Vegas, a Strip Joint or a Marijuana Dispensary?
How much is a new client worth to a business?
It appears it depends what kind of business you are talking about as the ALV, or average lifetime value of a customer, has different implications in Las Vegas.
For those that do not frequent gentlemen’s clubs or dispensaries, it is a very interesting business question in the vein of Freakanomics. Who pays more for a customer in Las Vegas, a gentlemen’s club or marijuana dispensary? Taxi drivers will tell you the answer if you want to know. How do they know? They get paid to bring unsuspecting tourist to both establishments from places such as the airport and hotels.
When you get in a cab in Las Vegas and you ask them, “What is the best….” or “Take me to the best…” , they are usually getting paid by a company for their answer and when they bring you there they get credit or cash payment. Gentlemens’ clubs in Las Vegas pay taxi drivers to bring guys (or gals) who want to go to “the best strip joint” but don’t know which one to go to on a given night. With recreational and medical cannabis now legal in Nevada now, dispensaries are also paying for taxi drivers to bring people to their storefronts who, “Want to buy weed in Vegas?”.
Which begs the question, who pays more for a client, a strip joint or dispensary, and what is the ALV, or average lifetime value of a new customer, for each business?
Guess which pays more before you read further.
According to local taxis, a strip club will pay anywhere from $40 to $120 for a taxi to bring a car full of new clients to a club. $40 is the standard rate according to our survey, but it can spike to over $100 if there is a big fight in town with lots of high rollers and action. This makes sense as cover charges at the door make up for most of the taxi payment, let alone mile-high drink prices, and tips given to the workers at the club. There are some serious margins in strip clubs, hence they can pay a higher price per new lead than dispensaries. Think of it as a real life Google Adwords campaign and you are bidding on the top spot for where a person will spend money for the next 2 hours.
Most taxi divers we surveyed said the dispensaries just started paying for tourist looking to buy cannabis in the past year. Prices paid to the cab driver range from $10 on the low end, to up to $40 on the high end depending on the season, the night, and how busy the city is on a given weekend. Prices go up with more tourist in the city for a big event or sports game. Friday nights also pay higher as people tend to spend more to cover their whole weekend. This makes sense on the tourist side since tourist will most likely come in on a Thursday or Friday for the weekend and want to make one pit stop to buy weed for the whole trip. Unless they are in the cannabis industry, they probably aren’t interested in seeing multiple dispensaries and exploring different varieties of cannabis on each day.
The Vegas strip club business model has a much longer history and they know their numbers very well. The dispensary model is relatively new and is still evolving so the math may change over time. Most cabbies did mention that the volume of people looking to buy cannabis over the pure volume of people looking to go to a strip joint is much higher, by a ratio of 5 to 1 was the bust guess. That means, although dispensaries are paying out less per drop-off, you are getting 5x the request for weed as you are from people looking to go to strip joints. This also makes sense as way more people in the general population would be interested in trying cannabis then going to a gentlemen’s’ club.
This is Cannabis.net, bringing you all the important stuff from MJ BIZ CON 2019! #mjbizcon2019
LAS VEGAS CANNABIS REVOLUTION, READ MORE..
CAN LAS VEGAS BE THE WEED CAPITAL OF AMERICA?
OR..
LAS VEGAS DISPENSARY MAP, GET THE LIST HERE.
OR..
