A Few Things to Leave You With
(And, no, this doesn’t mean I’m retiring)
George McAuliffe
By George McAuliffe, President, Pinnacle Entertainment Group
“The Constant of Change” was the title of my November 2023 column in RePlay. This month’s column marks another change for me personally. I will be stepping back from the regular column, but don’t worry, I may still write a bit here and there.
As a young arcade manager and regional manager in the early 1980s, I devoured the monthly RePlay that our owners were wise enough to provide to managers throughout the Time-Out chain. I learned so much from the news and from the industry veterans that shared their knowledge. So, it was a privilege when Ed Adlum allowed me to write this column starting back in 1992 or 1993.
I’m not retiring. Golf is not fun when you slice off the tee, so I don’t play. I’m a good fisherman…I just never catch anything, so no fun there. Our Pinnacle business continues to grow, and I continue to get older, so I figure I do need to free up some, which led to this decision. A major contributor is that RePlay’s Editor Key Snodgress agrees that we have a great replacement in Nick DiMatteo.
Nick’s latest gig is as VP Operations and Business Development for Pinnacle, a job he came to after years with Dave & Buster’s where he served as Corporate Director of Amusement Strategy. Before that, he was a senior manager with Tricorp Amusements, perhaps the largest route operator on the East Coast and now part of Player One Amusement Group. He also worked with Namco and in the food and beverage world, so he brings a wealth of broad experience as he takes over this column.
Regular readers know Gameroom Guru column alternates with my son and partner Howard’s Now Trending column so you’ll read Nick’s piece every other month. Most importantly, between Nick and Howard, I’m confident that the industry will be well served with honest expertise.
So, with this being my last regular piece for the magazine, I’ll leave you with a few thoughts from previous columns:
The Constant of Change: Build your business with enough flexibility to evolve with the inevitable changes that will occur. Introducing change, affordably, over time is a constant challenge. It affects your location dynamics, your approach to staff (from recruiting to retaining to managing), the capital equipment list, financing and basically everything involved with operating a family entertainment center. Building a great network, reading RePlay, attending trade shows and joining industry associations help to keep you aware and ahead of the change that will be around the corner.
Doing Redemption Right: There’s no telling how many columns I’ve written about some version of this. Our company, Pinnacle, makes a living assisting clients with this aspect of their business. We see money left on the table every day. When the fundamentals are done well, that money miraculously reappears. Every time!
Getting the prize selection right, managing inventory and understanding cost of sales and payout all matters. No story better illustrates this than the true one about a customer who cut back on his higher-end prizes to save money. With nothing to save for, his customers cashed in their tickets every visit. Since cost of sales is incurred when the tickets are redeemed, that raised the “redemption rate” which raised his cost of sales!
The Little Things: I told the story of going to breakfast one Sunday morning on a block with two diners. (I live in New Jersey and we love our diners!) One had a 45-minute wait and the other, maybe just 50 feet away, had open tables so we went there instead. Our experience wasn’t bad, but they missed a little on service, a little on selection and a little on food quality. Oh, and the bathroom trash can was overflowing with paper towels. The accumulation of all of those little things explained the success levels of the two businesses.
Do Your Pancakes Have Ears? We are in the fun business! Any chance we get to deliver fun will yield a return. I told the story of another family breakfast which included four kids ages 2 to 8 years old. My niece chose the diner, and thinking about why we passed about five other diners on the way, wondered what was so great about this place.
When we arrived, sure, it was nice but it seemed just like many others. And then the pancakes came. Take a look at the picture on this page. When these pancakes hit the table the dopamine level shot up in the brains of the kids and adults alike. The whole fun factor went up noticeably! And it didn’t cost the restaurant owner a nickel! After building and equipping a nice place, the owner hired good, smart people, set the tone and gave them the freedom to put the ears on the pancakes!
The Tail Wagging the Dog: We all do it. We allow our focus to narrow on a certain business matter and don’t realize we are ignoring big picture opportunity. I think of this every time I approach the door of an FEC, and I see a list of “Nos.” No Outside Food. No Outside Beverages. No Running. I’ve even seen No Horseplay. Ok, we get it, you have to have house rules. But must you “shout” negatives at your guests before they even set their first foot inside your “fun center?”
Another pet peeve is restricting redemption and crane play during promotional or other events. Yes, redemption and cranes have a cost of goods but in most of our clients’ locations, redemption and cranes account for upwards of 85% of sales. They ARE the experience we are selling. If we’re promoting our facility, why restrict the core experience? Merchandise costs should run 12-15% of sales in the total arcade. If it’s a free-play promotion, I’d submit that price is worth paying so you can deliver the maximum fun and generate future business. If it’s a group timed-play event, charge 15% more. The event organizers will get their return in the fun factor for their event!
Get Them Back One More Time: I don’t think I ever titled a column with those words, but I wrote quite a few on “Guest Experience.” Most FEC businesses are community based with a defined audience residing in a 20-minute drive time. The key is to get that audience back, again and again. Our formula is:
1) It’s got to be fun throughout.
2) Create memories wherever possible.
3) Give them a fair return in merchandise.
4) Deliver plenty of entertainment time vs. the money spent.
When we do those things, our guests return more often.
I’d like to thank you, RePlay readers, for the opportunity to share thoughts over the years. Thanks also to Ed Adlum, Ingrid Milkes, Key Snodgress and all of the RePlay team I’ve had the pleasure of working with over the years. I’ll still weigh in with the occasional column but, in the meantime, I look forward to reading Nick and Howard’s take on the industry.
George McAuliffe has helped hundreds of businesses large and small develop and execute arcades and FECs. He has personally operated family entertainment centers from 2,000 to 150,000 square feet as a corporate executive, entrepreneur and consultant. He is the owner, with his partner and son Howard, of Pinnacle Entertainment Group.
George lives on the Jersey Shore with his wife, Julie. They have three sons, two daughters-in-law and a grandson.
Readers can learn more about Pinnacle at grouppinnacle.com or contact George at [email protected]; phone: 314-422-7197.
