Getting Them Back
The Importance of Repeat Customers
By George McAuliffe, President, Pinnacle Entertainment Group
Any fans of ABC’s Shark Tank reading this? I confess to binge-watching this show, where entrepreneurs pitch their businesses to a panel of “sharks,” venture capital investors. Kevin O’Leary, known as “Mr. Wonderful” on the show, is one of the most direct and to-the-point Sharks. He is perhaps best known for grilling the entrepreneurs on their “customer acquisition cost” (CAC).
CAC is most often defined as Marketing Cost/New Customers, but can be more complicated. Do an online search of “customer acquisition costs” and you’ll get a ton of information. Regardless of how you define it, no real understanding of an FECs CAC can occur without also figuring in “Customer Lifetime Value” (CLV). Once we acquire a customer, ensuring that they return again and again will, over time, reduce our customer acquisition cost and grow the business. That makes us more efficient and more profitable.
I follow a popular marketing blogger, Bernadette Jiwa, whose writing can be found at thestoryoftelling.com. Bernadette addressed Customer Lifetime Value recently, observing: “We have come to believe that attention and awareness are the currency of (marketing) success. They’re not. What matters more than getting someone’s attention is what you do to change how they feel once you’ve got it. Successful businesses are built on earning the second interaction, and the one after that.”
Did you ever start thinking about buying a new car and suddenly see the leading contender on the road every time out? That has happened to me with CAC and CLV. First Shark Tank, then Bernadette’s blog and, just the other day, it happened again. My friend Fred Kaplowitz, the widely respected guru of bowling center marketing, blogs at www.KaploeGroup.com, and wrote a piece titled “Let’s Do It Again,” which Fred says are “the words you want to hear from your customers as they exit your facility.” He went on to say, “You only get to hear these words if you are delivering an outstanding, memorable experience that emotionally connects with your customers.”
FEC operators invest heavily in physical plant, in games and attractions and in marketing efforts to attract customers. The best operators invest in their people and in the many things that can make customers want to return. I recently asked one of the top bowling operators in the country, Anthony Taormina of Facenda-Whitaker Lanes in a suburb of Philadelphia, the secret to the success of his 60-year-old business. “That’s simple,” Anthony said. “We apply three principles to everything we do: cleanliness, customer service and equality.”
I asked him to elaborate on the equality part. “Equality means we treat every customer equally, whether they are a league bowler or in a junior league or senior league. No one is more important because of their average or any other reason. Nobody walks out of our building with a product. They spend their money, and decide to come back, based on an experience. We have to deliver a consistently great experience to all; every customer is entitled to it equally.”
Competing for Customers
The FEC world is growing and growth breeds competition. That competition is showing up in various formats: traditional FECs, bowling entertainment centers, restaurant entertainment centers, pizza restaurants with entertainment, trampoline parks, escape rooms… You get the idea. And that’s just direct competition! We compete for people’s time and attention as well as their dollars, and there are many indirect competitors out there, including what our customers can do in their own homes.
Are we getting the details right to make sure that our guests are having a great experience, one that they’ll tell their friends about and one that they will value in a way that will keep them coming back?
Are you investing, really investing, in the guest experience? The most successful operators invest in payroll, more in training and generally more in the FEC staff as the area with the highest return on investment potential. The payoff comes in lower cost of turnover and better delivery of guest experience.
A few years ago, I shared an experience I had with my family in a local New Jersey diner. I titled it “Putting Ears on the Pancakes” and told the story of the creative diner owner who delivered kids pancakes in the shape of Mickey Mouse. He didn’t change his ingredients, just understood his customers and took the time and effort to elevate the experience.
A little thought will yield a ton of potential “ears” for your FECs “pancakes.” Fundamentals count. Clean games that work well, redemption games that pay out when targets are scored, fair pricing and so on. But how many of us leverage games into the guest experience beyond just being there? For example, it’s back-to-school time, can you start a “Good Grades Earn Free Games” promotion? Think about how retailers do that every day, creating excitement around holidays, seasons, new item introductions and sales. I’m sure an hour with your staff will yield a lot more ideas.
The games have been purchased, staff is already on the clock and the customers are already in the door. All we need now is a little creativity to come up with the ideas to take the guest experience to the next level. And the payoff is real. If your FEC depends on the people in your community for the strength of your sales, then repeat visitation is the name of the game.
Aha! Moments – Beth Fendl
Editor’s Note: Beth Fendl recently joined Pinnacle Entertainment Group to manage administrative processes. She has extensive experience in restaurant management as an entrepreneur (The Riverside Café, Ellwsorth, Maine) and having managed numerous restaurants for others.
“Starting out in the restaurant business years ago, the pressures were many. My sister and I were pursuing our mutual dream to own and run a small café in our historic, New England downtown. We bought a business that had “great bones,” but no structure or personality. We knew in our young hearts that we could give it those things. We had a tremendous work ethic and many years of experience in the field. We closed on the business and gave ourselves a whopping 12 days to scrub the place top to bottom, finalize the menu, set up our space and do everything else needed to set ourselves up for success.
“On day 9, the to-do list did not seem to be getting any shorter and the stress was building. In a phone conversation with my brother, a seasoned businessman, I was lamenting about all we had left to do and the fact that we were going to have to move the opening date. Tom simply asked, ‘What’s the most time-consuming task on your list?’
“In pondering his question, I was able to calm down, organize my thoughts and come up with the answer: ‘Washing and waxing the dining room floor.’ Tom then suggested that we hire a cleaning company to do the job. My kneejerk reaction was, ‘That’s not in the budget!’ He offered a few more thoughts, asking what would opening a few days later do to the budget. With that one time-consuming task done by a professional, it would free up at least two days to attack the rest of the to-do list. Hiring a pro to do the job would insure that the job would be done right.
“So, that was my Aha! Moment. It’s so important to look at a problem from many angles with a clear head. When you make an adjustment in one area, in this case time management, you will open-up opportunities elsewhere. The greatest lesson learned was to have experienced, problem solvers on your team, seek them out and value their contributions.
“Fast forward 25 years and I realize that that Aha! Moment has served me well. It became a part of our organization and allowed us to find solutions and move on to the next level.”
George McAuliffe has helped hundreds of business 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. With his partner and son Howard, he launched The Pinnacle Insider to help a wider audience execute FEC operations at a higher level. Readers can become an Insider at ThePinnaceInsider.com.
George lives on the Jersey Shore with his wife, Julie, and has a passion for passing along what he’s learned in the fun business to the new generation of operators and suppliers.