Why Do Bars Have Happy Hours?

by Tom Murcko
Why do bars offer discounted prices on drinks early in the evening? The answer is that they recognize that the crowd and not the bar itself is the main reason people go to bars, and the discounts are effectively an expenditure designed to build something of value (that is, the crowd) which they can monetize later in the evening, with those same people or with others who come to the bar only because it is popular. The general principle at work here, of incentivizing early adopters, may be applicable to your business in other ways.
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