The density of E’ixample, the district of Barcelona I currently live in, is so high that there are at least six barbershops within 100m of the front door to my apartment. So when I had to get a haircut (for the first time in my life outside India), there was plenty of choice.
Cursory observations and price enquiries (some had listed prices on the door, while at others I’d to enquire) led me to this one-man barbershop called “Urban Cuts Barbershop” (the name is the only English thing about this barbershop – the barber spoke only Spanish). I think the barber has done a pretty good job, but while I had placed my head in his hands, I was thinking about his marketing.
One of the ways in which shops and restaurants advertise quality is through herding and display of crowds. Ceteris paribus, a full restaurant is seen as being better than an empty one – why else would so many others have made the choice to go there? When in doubt, people seek comfort in company; making the same bad choice as everyone else is seen as being less worse than going out of the way and making a bad choice.
So when you are seeking a barber, you seek a barber who others seem to approve of, and the only way you can find this out is by seeing how crowded it is every time you walk past (six barbershops in close proximity to your residence means it’s possible to collect sufficient data points before you make a decision). And if you see it consistently has customers, you are more likely to go there than to a barbershop that hardly has customers.
The problem with a one-seat barbershop is that its fullness is binary – the shop is either operating at 0% capacity (no customers), or at 100% (one customer). If there is no one in the shop, prospective customers walking past might assume this shop is not good. If there is one customer in the shop, prospective customers might reason more favourably about the quality of service, but might be put off by the possible waiting time (range of services barbers offer means that the service time can have a large range).
With more seats, on the other hand, there can be an “optimal level” of fullness, where the shop appears full to a customer walking past, but has enough room to serve a random customer who happens to walk in.
In other words, “marketing ability” is something to take into account while deciding the optimal number of servers. And there’s some food for thought here for consulting businesses like mine (though my fullness is not as binary as the barber’s since I work on longer term projects which can be multiplexed).