El Arroyo is a widely known restaurant and consumer products brand based in Austin, TX. El Arroyo regularly attends gift markets in Dallas, Atlanta, New York and Las Vegas to market its consumer products to retailers. The El Arroyo team realized two things: 1) that everyone was walking around the market carrying samples and that required them to use bags and 2) that some of those people probably wanted a margarita ;). So El Arroyo decided to produce consumer grade tote bags with it’s fun content printed on both sides and give them away and 2) bring a margarita machine and some branded cups to the market. El Arroyo calculated that each new customer, at their average order amount and margin, would cover the cost of about 62 bags. They decided that they could land at least 1 in 20 customers so decided to go with the consumer grade bags. They could have gone with lesser expensive bags but they 1) required a bag that fit the quality of their own products and 2) they wanted customers to want to keep the bag and use it in their day to day lives so it would continue to reinforce their brand between markets. The margarita cups were far less expensive than the bags, however, the machine and margaritas themselves had significant cost associated with them. The El Arroyo team bet that having a cup in the hand of hundreds of people walking around, while others ask them where they got the margarita from, would pay off since, you know, everyone loves margaritas. The El Arroyo team has now run this strategy 3 years straight and has had exceptional sales growth and customer feedback, including that customers have taken the bags home and that all their friends want to know where they got it from, driving continual positive association as the bags are only for retail buyers and not for sale.
