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3 Factors on How to Run Locations
- May 19, 2018 -

    Location profit model

    Businessmen must understand that no matter what business they do, they must understand the profit model of a business, because relying on the right business methods is easier to obtain lasting profits than relying on luck. For any business that distributes products or services, such as playgrounds, profitability comes mainly from three core metrics: customer traffic, customer cost, and customer value.

    Generally speaking, traffic is the number of people entering the store. The cost of receiving customers is the amount of money each customer needs to spend, and customer value is the amount of money you can earn from each customer. According to the data summarized by U.S. start-up companies over the years, the customer cost is lower than 33% of the lifelong value of the customer. This means that if you spend 50 pieces to attract a customer, then the customer does not spend 150 on the site afterwards. You lose. Professional amusement park operators are very clear that these three indicators must be managed day after day to make the venue alive and profitable.

     The management of the three major indicators cannot rely on the enthusiasm, but depends on the refinement of the operation of the site. The reason why certain software suppliers' systems are like Xinhua's dictionary is because of the system's ability to enhance customer value and reduce customer cost. Very much, we can use these functions to understand some of the techniques used to improve the three major indicators in the operation of professional venues.

     Passenger flow: How to get more customers

    The precondition for lowering the cost of obtaining customers is to obtain a large number of customers and then select high-value customers from them.

    The location of the shop has the greatest impact on passenger flow and customer quality (so the preliminary investigation is very important), but the site selection is only one chance. The factors that have a greater impact on the passenger flow daily are the product (machine selection) and marketing (social transfer). With the continuous increase in the cost of commercial real estate and the proliferation of entertainment products, it is absolutely impossible to rely on regular traffic in front of the venue. In order to obtain more customers, the venue must insist on planning various marketing activities to attract more people outside the venue. Traffic, the current professional venues are full-scene marketing parallel, that is, online and offline will be involved (some venues set up hundreds of promotional packages according to different marketing channels), one can not be less.

   There is a buzzword in the marketing industry: where is the target user, where is your marketing, and the closer to the user, the easier it is to succeed. Taking online marketing as an example, there are so many functional modules that match online marketing:

    According to statistics from Internet operators, the current average time for Chinese mainstream users to light up their mobile screens is about 4 to 5 hours. In addition to the time spent at the computer, users spend more than 10 hours a day staring at the screen. This is software. The supplier system places great emphasis on the reasons for online marketing, because users spend a great deal of time online, the system must design a large number of marketing functions to assist the venue to solicit online.

    For the offline marketing methods, after years of accumulation, the function gameplay is more abundant:

    Obtaining enough customers is the premise of all operations. Therefore: The management function is the basic value of the site system, and the marketing function is the core value of the site system.

    How to reduce the cost of winning customers

    Each venue hopes to be like a cloud, but there are costs from each customer access channel. Too high a customer cost can lead to unprofitable operations, so it is crucial to optimize profitable access channels. .

    When the site receives a large number of customers through various marketing activities, reducing the cost of obtaining customers is a cycle of the following methods:

    1. Analyze the optimal cost of marketing activities;

    2. Continuously optimize and implement the same type of marketing activities;

    3. Continue to expand new marketing activities and return to Method 1.

    Reducing the cost of acquiring customers depends on an accurate analysis of business data. By analyzing the customer cost and business data of different marketing activities, the most cost-effective marketing activities are ultimately selected, and these marketing activities are continuously replicated and optimized.

    With these features, the manager can analyze the cost and business data of each customer access channel from a very large number of dimensions:

    When we have the most cost-effective way to win customers, we can feel comfortable attracting more passengers. At this time, the final indicator of profitability is customer value.

     How to improve customer value

     Enhancing customer value has two important meanings: 1. Allowing customers to spend more money on the site, directly stimulating revenue 2. Customers recommend sites to more friends, indirectly driving revenue. There are two ways to increase customer value in daily operations:

     Encouraging benefits: Provide continuous, immediate benefits to stimulate customers' spending habits, and use points and other tools to increase customer churn costs.

     Induced by emotion: Through a good service to allow customers to have a good feeling on the venue, and happy to share the fun from here.

     The best commercial means of stimulating profits is promotion and membership management. These two methods often cooperate with each other. The membership system is a very important business method for the sales industry, because the cost of acquiring a new customer is 5 to 8 times higher than activating an old customer. Therefore, it is equally important to pull new customers and run old customers. Some high-quality clothing brand retailers can use the member management method to make VIP members spend an average of 50% or more of the store's stores, and extreme stores can reach 90%, providing a great guarantee for store profits but reducing their operating costs. Stress is a very useful business method.

    The essence of membership management is to establish lasting contact with customers and provide better services by differentiating different customer values. The software supplier's system can be said to be a large-scale member management system, which will realize the membership of all customers who go to the store. Management, and integration tools are fully integrated into the system, not only can continue to induce members to form a habit of consumption through interest, but the points generated by continuous consumption will result in psychological binding of the members, not easily lost, use these tools to enhance Customer value has tremendous help.

      In addition to membership management, continuous, real-time consumer incentives can directly increase the customer's payment behavior at the venue, such as:

     Encourage continuation of discounts: Members will play on the same machine for the same day, first time original price, second time 10% off, third time 15% off

    Spending points: redeem points for game currency/event area tickets/gifts, etc.

    In general, human beings are very anxious when they are trying to consume entertainment products. They hope that they can quickly get pleasure in the pleasure process to ease this anxiety. Facing customers from all directions, they can quickly meet customers' anxiety without relying on automation systems. The demand, the user's consumer impulses are easily extinguished, resulting in the loss of consumption - this is a powerful system for the commercial value of the playground.

     Playgrounds derive a variety of management methods. In essence, they all aim to manage the three major indicators that affect profitability: increase passenger flow, reduce the cost of acquiring customers, and increase customer value. The optimization of all these business indicators requires system support. The system function is the premise of refined operation. The refined operation is the guarantee of site profitability. The pursuit of a simple system is in fact a disguised abandonment of the venue's ability to obtain customers and profitability. Now we understand why certain systems are like the Xinhua dictionary.