In our previous blog, we discussed the impact of re-visitation rate on the Trampoline Park industry, and its impact on the success or failure of a park. To view click here.
Over the last few years we have experienced huge growth in the sector, with many parks now experiencing strong competition, severely diluting each parks customer pool. This is leaving many without the cash flow for the serious reinvestment required in order to enhance their offering come the inevitable decline we discussed last time.
How do we move re-visitation?
Therefore, it is time to ask the question. What can parks do to impact re-visitation rate?
In today’s blog we explore a handful of opportunities that we have experienced that we believe can demonstrate a measurable effect on re-visitation. As a reminder re-visitation rate is defined as your total customer pool (live waivers on a rolling 12-month basis) divided by your total annual ticket sales.
Growth of customer pool
During the growth phase you would expect steady growth of your customer pool, but once maturity hits, or new competition opens, then movement of your customer pool is likely to decline. Not to say that certain marketing initiatives cannot increase your customer pool, or additions of a product or service that differentiates you from your competition. Remember, that natural geographical barriers will always exist when trying to impact your customer pool as will the cost of marketing. In addition, it has been suggested within the leisure sector that an increase in retention of 5% can lead to a 25-95% increase in profits whilst the cost of retaining members (driving re-visitation) is significantly less that attracting new ones. So, what can you do?
Tactical marketing is often the first stop. However, be careful not to condition your customer pool to buy on promotion. This can be the first step to cannibalizing your yield, further impacting your profitability. However, we have seen some excellent examples of tactical marketing that have had a great impact on customer pool. In particular, the development of systematic referral campaigns.
These campaigns can usually help draw a larger customer pool. These can be driven through general jump or via kids’ parties. Ensuring you have an appropriate CRM system in place to communicate with lapsed bookers can increase your customer pool without the added personnel resource. It tends to do this by adding family members from your locals who may visit a handful of times per year? However, if that is the case, a re-visitation from upwards of 2 from extended family is adding real value to your bottom line. In addition, tactical marketing can be used to drive immediate re-visitation. Whilst £10 per person for a family of 3-4 is often viewed as poor value by many customers, adding a second hour, increasing the amount of time a family can spend on location increases the value, as well as adding some secondary spend, more on that later.
Speed of movements
Expanding at pace can support your park in terms of economies of scale and could also help grow your parks overall customer pool. Firstly, consider your full market, remember you are not just competing with Trampoline Parks. If you sit in the active leisure market you are competing with gyms, ice rinks, play farms, soft play. Whilst, if your focus in on entertainment and recreation, your competition includes cinemas, bowling alleys. Therefore, during expansion, you should be considering enhancing your community products in a strategic way.
Differentiating your product offering from the standard jump can yield great results. Especially when it comes to re-visitation. Fitness classes; for example, have been seen to increase re-visitation by 40%. Trampoline based fitness classes can help provide regular attendance at otherwise quieter times, specifically early or mid-mornings. In addition, if you are prepared to invest in people then a real Rockstar instructor can be a significant asset to your business.
Whilst increasing re-visitation remains the number one priority for the sector, there are other options to be considered to enhance revenue in the short term. Ask yourself, do you understand your customer? Do you know what decisions are being made? Are you gearing your product offering towards the booker (usually Mum or Dad)? or the jumper (the Child)? Because despite what most people think, ultimately the child isn’t the decision maker. Over the next few years, we believe that Trampoline Parks customers (the booker) may be segmented into one of two key markets. Firstly, are the customers who view parks as Active Leisure. This is a park that families go to be healthy on both a regular and irregular basis. Re-visitation strategies with this segment will include structuring your second line spends around the idea of healthy living. Stocking your cafe with the latest healthy food choices as opposed to the latest slushi and hotdog combo.
The second market is purely the entertainment market. Less pressure is placed on creating a healthy second line spend, and parents are happy for a pizza/coke combo meal. Careful consideration should be given when thinking about your long-term strategic direction, as mixing the two offerings could alienate both segments. One is looking for healthy active fun, whilst the other is hoping for some recreation time, and a convenient way to entertain their child.
Explore niche markets
Many parks are now simply turning to niche markets in order to stand out from the crowd. Trampoline Parks often make significant investment in their infrastructure, booking systems, and equipment, but still find it difficult to truly stand out in a crowded marketplace. We have experienced the implementation of climbing walls, parkour, total wipeout and similar. Each has an ability to increase to re-visitation metrics, but can often come with a shorter product lifespan than the core product, leading to earlier reinvestment to stay relevant. Second line spend.
Food, Drink, Merchandise, all good options for increasing revenue in the short term. However, margins can often be small, and when accounting for increased labour to bring them to market, as well as the potential for stock loss, this could often leave you short changed.
How do we not worry?
Well, we create a product which focuses on regular attendance. Namely, a membership subscription. Whatever product you have focused on, whether it be a niche market, growth of customer pool or speed of movement to market. A membership can enhance your offering, provide you with easier opportunity for tactical marketing and increase second line spend. Memberships remains relatively unexplored in this market, but with BookNow software leading the way in Trampoline Park membership infrastructure, the future looks positive.
The leisure sector appears to suggest an average attrition rate of 3-5% with the membership model, whereas as high as 19% exit your customer pool during the first year with the pay-and-go model.
With many membership models to choose from our there (think Merlin Annual Pass, The Gym Group, British Museum etc) It is important to understand the pro’s and cons of each model alongside your overall business strategy and the type of customer you attract. Therefore, in our next blog we will look to explore the membership model in more detail.
This blog is part of our ‘Data Insight’ series which aims to provide useful content and insight to those currently working within the Trampoline Park industry. To discuss this report to arrange a demonstration of our software. Get in touch via the details overleaf.