Occasionally when I travel I try to hook up with old friends if I find myself with a free night in their town. Last night was such a night. I dined with a good friend, who is an industry leader in every sense of the word, in operating and distributing, and someone that's knows a great deal about our business. This is another great friend I owe to 17 years in the AMOA, but that's another article. I enjoyed getting caught up in the hot-topic issues of the day.
At Sugarloaf we don't currently buy many I.T. golf games for our accounts, as we don't have a significant street business. Furthermore, if we did we would attempt to negotiate for a direct relationship with the manufacturer. Our need for financing doesn't exist (at least at the distribution level) and our service support needs are minimal. But I knew when I read that I.T. was going to sell directly to operators, rather than through distribution, that this was going to be an industry-shaking event. I learned last night about an angle to this issue I hadn't thought about. Many of the smaller operators aren't necessarily that thrilled about it either. How can that be? Is the distributor still going to offer the smaller operator the support and perks when next year their purchases go down 50%, since their golf games are now being purchased directly from I.T.? Is the quantity of games purchased through I.T. enough to hit their radar screen? Is the operator now a small customer of two suppliers rather than a big customer of one? In other words, is it better to be a small fish in a small pond, or a small fish in a big pond? There is industry precedent where manufacturers have attempted to sell directly to operators, and later, end up going back through distribution. In any event, business is made up of pioneers that step out of the box. Being aggressive is a big risk, and this move by I.T. is clearly aggressive. I applaud them, right or wrong, for making a decision and rolling it out in a big way. I don't know if works in the end, but history will tell. If it does, it will change the way our industry does business. This is a very different industry today than it has ever been.
I asked my friend what's making him money in today's street business. "The same old blocking and tackling that we've always done" was the answer. Pool tables, jukeboxes (mostly digital), online-tournaments supported by a sophisticated marketing program, and being close to the customer, are the keys to his successful business. That customer relations issue always comes back as a basic, doesn't it? It's the one constant in my experience. Stay close to the customer. It's good for business and it makes the daily effort of running your business much more enjoyable.
We moved on to the industry trade shows next. For 20 years I remember debating where to conduct these shows. Should you park it in Las Vegas where the exhibit space is cheap, and where industry people love to visit (except for the exhibitors), but show attendees don't spend anytime on the trade show floor? Or, should you move it around the country where you incur higher show costs, but have a more captive audience? It's a never-ending debate that I used to participate in. I was always a proponent of moving the trade show around the country to different venues. Until one day I was visiting with a small operator who looked at me kind of funny and explained that he gets one vacation per year, loves to go to Las Vegas, and that the AMOA show assures him that he'll get there at least once a year. He doesn't take other vacations because he's generally busy running the route. Why in the world would we want to have the show anywhere else? I identified that he was a much more typical AMOA member than I was. Las Vegas is the ultimate adult playground, so why would you go elsewhere? I am looking forward to Chicago this spring for the ASI. It's where I first attended trade shows with my father, as is the case with many industry members. But I'm not sure how many of my operating friend will be there.
Another opinion on this issue, and one that I totally agree with, is that in a healthy industry, when members are making money, and wanting to buy equipment, they'll go wherever the equipment is. Trade show attendance is less dependant on geographical location than it is the health of the industry in general. I don't suggest anyone hold a trade show in Topeka, Kansas, to test my theory, but if you stick to reasonably desirable locations, I suspect the attendance will be just fine. The buyers will show up. They have to. It's their job. Too often, as in always, the conversation turn to attendance figures as some measure of success. Rather than count bodies, we should be counting active buyers. Of all the budgeted equipment dollars being spent in the industry, what percentages of those buyers are attending the shows? To count the attendee that will spend $10,000 next year with equal weighting as the attendee that will purchase $5,000,000 in equipment next year is misleading. It doesn't matter how many people are there as long as the exhibitors are selling equipment. If they do, they'll be back.
It's always fun catching up with old friends, and learning about the
mainstream industry issues. What struck me is that none of these issues
are new. For 20 years our industry has been debating the same issues, it's
just different people in the debate.