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“Everybody wants a deal!” is what I have heard for years. Well, I would argue that statement after being on the road working in many different markets with many different types of centers in the past 90 days. My experiences have shown me the opposite. Here is a list of points I am finding:
Image for a minute you had 60% of all your customers in your own database that you owned and controlled. How powerful do you think that would be for your business?
Now let’s talk about the 40% that don’t sign up for a Membership. In my experience they have had no problem paying the higher price and don’t really care how much they are going to spend. I have come right out and asked people, how much do you think a game of bowling costs? The most common answer is,” I don’t know.” If I continue the conversation with them and dig deeper they tell me they don’t really care how much it costs, they only come bowling once a year if that.
So with that being said, and hearing numbers of the industry that 50% of our customers visit us 1-5 times per year then why do we give everyone the same deal? In some cases, I was working the front counter at centers that had super deals and the customer simply walked into them spending in most cases one third of what they probably thought they were going to spend. So again, why do we treat all of our customers the same way?
Tiered pricing is not the only answer to address this situation. I believe it to be as big as cosmic bowling or bumper bowling. I say that, because I am seeing centers increasing their average revenue per guest substantially without any investment. I should mention that I have yet to have one customer complain to me or hear of any complaints from any center or their staff in the past 90 days that are using this pricing strategy.
So if this is correct and it works, what can it do for your center? I have given an example of a 32 Lane Center below that does $700,000 in bowling revenue with 65% of that revenue coming from open play, with an increase on average of 20% in price to non-members. Remember this is an increase on price, not a discount for Members.
$700,000 x 65%=
$455,000 in Open Play Revenue
Let’s assume the $455,000 is the total Open Play Revenue before any tiered pricing is put into effect.
40% of revenue comes from the 40% that I say don’t care about the price or won’t become a Member to save. This means $178,200 is 40% of the gross Open Play Revenue.
If you put in place tiered pricing for these individuals that don’t care to sign up to become a member and don’t care to pay more than you would generate an additional $35,000 in revenue. This is only based on a 20% non-member increase. In many centers on their specials they have a 100% increase on price for non-members and they still won’t join!
Memberships are a powerful tool. They are no longer just a rewards card because the customer has paid for the Membership and the Membership card is loaded with value for a future visit which makes it feel more like a gift card than anything.
Why not give the deals to our regular customers and for those that just come once in awhile let them pay more. Memberships do two important things; they grow your database and protect your price point.
Remember all of that extra revenue falls directly to the bottom and in this case that would be about a 10% increase in bottom line income. Do your the math at your center and see how much more money you could make. I have posted an example of tiered pricing promotion here.