Breaking Business Model Barriers
In Barcelona, Runner Bean Tours offers two free walking tours. These tours are a big hit and often attract tourists across the entire income spectrum.
At the beginning of the tour, guides will tell you that admission is by donation. You are encouraged to donate whatever you feel the tour is worth.
I asked Tati, my tour guide for the Gaudi tour, what percentage she gets to keep from the proceeds. She replied that she gives $1.50 per person back to the owners of the company and keeps the rest. On days when the turnout is big, she can make very good money. On days where the turnout is small, she makes less, yet pays out less to her company.
You may wonder how the owners keep track of the numbers of people who attend each tour. Here’s how it works. As people approach the tour guide to sign up for the tour, they are given a red-dot sticker for the Gaudi tour or a green-dot sticker for the Historic City tour. The guide has sheets with 30 dots per page, and uses that as a way to monitor the number of people they’re responsible for on the tours as well as how much they need to pay out to the owners at the end. When guides submit their sheets with the remaining stickers, they also hand over $1.50 per head.
Runner Bean Tours also offers paid-admission tours. When a person participates in a free tour, they get a promotional brochure for other events from the same company. I went on both free tours and recognized others who also went on the same tours as I did. Offering two free – or at least donation-friendly – tours turned out to be a successful strategy for the company to build their brand and generate more business from existing customers.
What pricing and or business model has impressed you?