Sell Them The Drink

So recently Spotify let something slip at their investor day, and I don't think enough people caught it. Subscribers who add on Audiobooks+ are worth three times the lifetime value of a regular subscriber. Three times. Same app, same price tier, they didn't reinvent a damn thing, they just added an option. And look, I've been doing this for 12 years, so when I see a number like that, I don't get excited about audiobooks. I get excited about what it actually proves.

Because this is exactly what I talk about in my book, Strategy is not Planning, except I used hot dogs instead of podcasts, because hot dogs are funnier and also because I was hungry when I wrote it. The line is: When you're selling a hotdog, they'll need a drink. Sell them one.

That's the whole principle. Nobody wants to hear it because it doesn't sound like a strategy, it sounds like something your grandpa would say running a lemonade stand. But that's kind of the point.

Spotify already had the audience. Hundreds of millions of people standing in line, hot dog in hand, paying every single month. So instead of going out and building a whole new stadium, which costs a fortune by the way, they looked at the line they already had and asked what else those people might be thirsty for. Turns out it was audiobooks, and now that little add-on is on pace to bring in a hundred million dollars a year, from people who were already customers.

Nobody had to be convinced Spotify existed. They already knew.

And this isn't just me making it up in a book with a funny cover. Wharton professor Peter Fader has built an entire career on this exact idea. He wrote the book on it, literally called Customer Centricity. His whole approach comes down to something like this: figure out who your best customers already are, get more out of them, then go find people who look just like them.

Notice he didn't say go find more customers first. He said start with the ones you've already got, because apparently a professor and a guy who writes about hot dogs agree on something.

So before you spend another dollar trying to drag brand new people into your stadium, look at who's already standing in line at your stand. They're right there, they already trust you enough to show up, and the only question left is whether you've actually offered them the drink yet. That's the whole reason VIIBrook starts with what you've already built, instead of what you wish you had.