Multiple Reasons Why Memberships Don’t Work
There is some wishful thinking going on about Memberships and how they might help our venues make more money. The reality is that simply using the word ‘Membership’ is a great way to prevent our guests from buying one. How many guests want to give up their credit card number, sign a terms of service agreement, and be locked into another membership or subscription service? The answer is very few.
We would all like to receive the core benefit that comes with selling a lot of memberships, which is a steady flow of recurring revenue. Unfortunately, most are not prepared to do what is required or have the tools needed to make it all work.
It’s important to also understand that memberships are just another marketing tool and like all marketing tools they either speed up our venue’s success, accelerate its decline, or do nothing noticeable. By the way, instead of using the word ‘membership’ we should be using less scary words like ‘monthly’ or ‘time based’ offers.
The purpose of a monthly offer is to increase the frequency of guest visits. This is accomplished by providing exceptional attraction experiences as well as making it super easy for our guests to repeatedly meetup and socialize with their friends and family at our venues.
Our priority should not be to secure our guest’s credit card number so we can charge it every month. A recurring revenue stream is something we must earn. If our guests do opt for one of our monthly recurring offers, our priority is to make sure they always receive the full value they paid us for. This includes providing them with a monthly value guarantee as well as auto-cancelling their recurring offer if they fail to use it.
The goal is to build a mutually beneficial bond with our guests that becomes stronger with each additional visit to our venue. This can only happen when we provide our guests with attractions that are addictive to play. In other words, the more our guests play our attractions the more they want to play them. If an attraction is not addictive, our guests will become bored with it the more frequently they play it.
Speaking of addictive, Starbucks is a great example of a company that sells highly addictive products. Their main products are beverages that are infused with a highly addictive substance called caffeine, but they don’t stop there. Their entire customer experience is designed to maximize, promote, and sell their caffeinated beverages in such a way that it dramatically increases the likelihood of habit formation, which helps Starbucks generate much higher revenue and profits per store.
They build their stores with drive-thru windows, provide curbside pickup, and develop apps to enable their customers to pre-order and pre-pay. Starbucks also has one of the best designed reward programs – most other reward programs suck by comparison.
Starbucks also sells coffee you can brew at home along with an array of branded coffee mugs and containers you can collect to remind you that they are always ready to sell you another quick hit of caffeine. In fact, Starbucks has strategically positioned its stores on tens of thousands of street corners across the globe. Starbucks also sells yummy and addictive sugar laced treats (yes – sugar is another addictive substance).
By the way, have you ever had their dark chocolate graham cracker cookies? I’ve convinced myself that the healthy antioxidant qualities within the dark chocolate substantially cancels out the negative graham cracker part!
As I sit here typing this sentence, I have a Grande Cappuccino half decaf with coconut milk sitting on my desk with a woman’s green face on a brown cardboard sleeve smiling at me. (Additional note, I’ve re-edited this article multiple times, which means there have been multiple Grande Cappuccinos with half decaf sitting on my desk – those f-ing bastards!!!) 🙂
In addition to having an addictive product, Starbucks puts in place the four key variables needed to enable a strong habit to form. As described in James Clear’s book Atomic Habits, the best way to form a habit is to make it – Obvious, Attractive, Easy, and Satisfying. Starbucks does exactly that by designing their products, processes, and stores in such a way that it’s ridiculously easy for their customers to form an unbreakable habit.
Designing an Irresistible Guest Experience
Our company has spent the last 5 years developing the software required to enable us to experiment with a wide range of monthly offers. In fact, we have tried over 100 iterations of Monthly and Time Based options at our two venues in Buffalo and Rochester, New York.
There have been more than a few times when we modified our monthly offers twice in a single week. Changes like that happened when we immediately received strong negative feedback from our guests. Other times, it took months to know if a new offer was better, worse, or had no visible effect on our guests’ experience or our revenue.
Over time, we discovered that our monthly offers actually helped us to gauge how much our guests liked our attractions. In fact, it showed us that the addictiveness and habit forming capabilities of our LASERTRON attraction was lacking and needed to be improved in several ways.
We have spent the last several years learning how to make our LASERTRON attraction significantly more irresistible (think Starbucks’ example above). We started by creating dramatically more intense, immersive, and exciting game experiences. We also realized we had to eliminate and substantially reduce multiple friction points that kept our guests from fully engaging with our LASERTRON attraction and overall venue.
One example of eliminating obstacles was how we modified our Battle Royale Tournament and Center Manager Pro software to provide all of our guests with a seamless way to experience multiple Battle Royale Tournament Qualifying sessions with their friends and family by simply using their monthly player cards. In addition, when a Squad accumulates enough qualifying points, they can compete in our monthly LASERTRON Battle Royale Tournaments for free. Youth Squads 17 and younger compete for medals and Adult Squads 18+ compete for medals and $1,000 in prize money.
Another example of eliminating friction was recently introducing our Battle Royale Squad game format. The new game format enables our guests to form their own two, three, or four person squads made up of their friends and family. One of the most common requests we get at our sign-in counter are guests wanting to play on the same team with their friends and family. Our new Battle Royale Squad game format makes this easy to do.
Although these two examples may seem like small improvements, it’s the culmination of these and other improvements that enabled us to create a much stronger bond with our guests. Even more important are the social bonds our guests form with their friends, family, and fellow guests because they are visiting our centers more frequently.
For us, this is a never ending process of figuring out how to create truly engaging attraction experiences that maximize the value our guests receive from our monthly offers.
Implementing Monthly Offers = Revenue Dip
It’s important to point out that a significant push towards selling monthly offers is likely to include an initial dip in overall revenue and possibly for a period of time. In addition, a halfway approach of promoting monthly offers alongside single day offers is likely to capture a very small number of monthly buyers. You may even generate less revenue because the guests who are most likely to buy a monthly offer are the same ones who already visit your venue frequently.
Critical point: If we are going to offer monthly options for our guests’ enjoyment, we have to be all in for the long term or we will only see marginal results.
Addiction and Habit Formation
I talk a lot about addiction and habit formation, which may make some readers a little squeamish. It really shouldn’t make us feel that way if the ultimate goal is to provide our guests with addictive habit forming experiences that can actually benefit their lives. As you may know, the vast majority of deaths in the United States can be traced back to a lack of physical fitness as well as poor eating and drinking habits. Based on that scary fact, can we provide our guests with attractions that help them improve their health while having fun and socializing with their friends and family?
All of our newest LASERTRON Battle Royale game formats are truly exciting, unpredictable, challenging, physically intense, and divided into multiple games or rounds within a session (think interval fitness training). One of the big benefits of our newer game formats is that players burn a lot more calories during a 30-minute session. Plus, the more sessions our guests play the more physically fit they become.
At our two centers, we no longer schedule the non-addictive, boring, low action, and low calorie burning Free-For-All or Team Free-For-All game formats. If we want to help our guests live healthier lives, then we need to provide them with attractions that are fun, exciting, physically intense, and designed to be addictive.
Our LASERTRON Battle Royale experience in conjunction with our monthly offers enable our guests and their friends and family to have more fun, get in better shape, and form a strong ongoing habit of visiting our venues.
Important Note: We have had many guests tell us that they cancelled their gym memberships because they are now using their monthly LASERTRON card to stay in shape.
Creating Addictive Experiences – Learning from the Best
Online video game creators have spent BILLIONS of dollars figuring out how to design the most addictive and habit forming gaming experiences possible.
I have personally spent hundreds of hours reading, studying, and having lengthy discussions with our team about how to incorporate the key elements needed to create the best and most addictive gaming experiences. It has been a very challenging and eye opening journey.
As I mentioned in a previous article, Adam Alter wrote a book about behavioral addiction. His book is titled Irresistible and was published in 2017. In his book he talks about, “The Rise of Addictive Technology and the Business of Keeping Us Hooked.”
Below are the key ingredients Adam Alter identified:
Goals – Compelling goals that are just beyond reach
Feedback – Irresistible and unpredictable positive feedback
Progress – A sense of incremental progress and improvement
Escalation – Tasks that become slowly more difficult over time
Cliffhangers – Unresolved tensions that demand resolution
Social – Strong social connections
I would like to add one more for out-of-home entertainment venues:
Auto-ReVisit – Make it super easy for our guests to come back again and again!
Most of our out-of-home attractions have a limited number of these ingredients. Even if they have more than a few, they often aren’t very effective at driving high levels of repeat play. Let’s face the facts, the number one problem in our industry is the extremely low number of annual guest visits, which for the average venue is only 1 to 3 visits per year.
If what we are currently offering at our venues is so fantastic, then why aren’t the majority of our guests coming back at least one time per month?
The answer should be obvious – our attractions, services, and offers are not creating a truly addictive need to come back. To be point-blank, what we are offering is just not good enough.
Monthly Offers – Pricing and Value
When designing our monthly offers, we understood that we had to provide such great value that the majority of our guests would revisit our venues one, two, or even three times per month, but at a price that still enabled our venues to generate a sustainable long-term profit.
We just introduced our newest iteration of monthly offers on Thursday, July 16th which is the same day that we finally reopened our venues.
Our Three Monthly Offers are outlined below:
Offer number one is our $22 One-Month Player Card. This card enables a guest to receive one attraction session every day we are open for a month. This is what we call a time based, ‘no hassle’, auto-expire player card. This card also comes loaded with a bonus session that is valid for the month. To clarify, a session is a 30-minute time period in which our guests play approximately 4 to 7 games or rounds. The entire experience is about 45 minutes including the briefing and vesting.
Our second offer is our $21 Two-Month Player Card. With this card, the cardholder receives one attraction session every day we are open for two months. This card comes with two bonus sessions per month that are valid within each month.
Our second option requires a credit card to enable the POS to charge their card the day of purchase for the first month and then a month later the POS automatically charges their credit card for the second month. This is also a time based, ‘no hassle’, auto-expire player card that stops at the end of two months. Guests can also pre-pay for both months upfront for $42 dollars using cash or credit.
The third is our $20 Three-Month Player Card, which once again enables the cardholder to receive one attraction session every day we are open for three months. This card comes with three bonus sessions per month that are valid within each month.
This third option also requires a credit card to enable the POS to charge their card the day of purchase for the first month and then the POS automatically charges their credit card for the second, third, and every month thereafter unless the guest opts to stop the recurring charge after 70 days. This player card is what we call an ongoing player card that auto-renews every month until cancelled.
Our second and third options each come with our Monthly Value Guarantee.
For Example: With a 3-Month Card, if a guest is unable to visit LASERTRON at least one time between renewals, they will receive $20 in LT Cash and an extra $5 in Arcade Bonus loaded on to their player card. That’s a $25 Value for the $20 they paid us! They can use their $20 in LT Cash to buy food & beverage, arcade, attraction sessions, or use it towards an event.
Virtually all membership and subscription programs available today are ‘use it or lose it’ offers, but not with our monthly LASERTRON offers. Once again, if our guests don’t use any of the benefits during a monthly period, we store the value of their monthly purchase of $20 dollars on their player card plus $5 dollars in Arcade Bonus for future use. That’s what we call doing the right thing.
In fact, we even auto-cancel our guest’s recurring offer if they stop using their monthly card for 6 consecutive months. The guest’s monthly player card will continue to store all the Monthly Value Guarantee they accrued even after the recurring charge is stopped.
Important notes: We only offer our guests monthly options – we don’t promote or sell any single day offers. Remember, our goal is to eliminate all obstacles that would stop our guests from coming back again and again. Single day offers don’t provide a guest with an incentive to come back again soon.
At one point, we used to push recurring memberships pretty hard, which required a credit card and it was up to the guest to cancel their membership before the next monthly credit card charge. The value we offered was great even if they only used it on the day they purchased it,however the majority of the value came from their ability to come back for a free attraction session every day we were open for a full month. Unfortunately, our guests were more fixated on the date they could cancel their membership (before the next credit card charge) instead of using the value they purchased.
We basically created an obstacle or “friction point” that we didn’t fully understand – at least not yet. The number of return visits by our guests during this iteration of monthly ‘membership’ offers was extremely low – at less than 10% for one additional visit. When we went to our monthly card which doesn’t require a credit card and automatically ends, over 60% of our guests returned for one or more visits. That’s a 600% improvement in visitation!
Important note: The results we want to get are far less likely to happen when we create obstacles or friction points for our guests to worry about.
Attraction Capacity & Pricing Challenges
All of our venues have a max capacity for our attractions and services. This means we have to price our monthly offers at a level that ensures our guests receive great value and also allows our entertainment venues to make a sustainable profit.
It’s critically important that we don’t oversell our attraction capacity. Overselling our capacity will cause negative guest experiences to occur. This happens when our guests are unable to utilize our attractions because there isn’t enough capacity.
If demand does become greater than our optimal capacity, we can raise the pricing on our monthly offers, limit the number of monthly passes we sell, or a combination of both. This enables us to maintain a high quality guest experience.
Understanding Our Venue’s Capacity
If we have a capacity of 4,000 attraction player sessions per week and on average every guest plays one session per week, then we would be able to sell 4,000 monthly player cards. At $20 per guest x 4,000 player cards sold, we would generate $80,000 per month or $960,000 per year in attraction revenue.
If the average guest only played two sessions per month, then we could sell 8,000 monthly player cards and double our attraction revenue to $1,920,000 per year. Even at two times per month, the value proposition for our guests is very good and enables us to make a better profit.
It’s also critically important to have a POS system that enables our guests to make reservations online, by phone, or in person. Reservations help ensure that we maximize the utilization of our attraction session time slots and also enable our guests to get the value they purchased from us.
Note: It is impossible to do all the things described above without a fully integrated POS system that includes all the Monthly player card tracking software as well as the ability to make attraction reservations in advance to ensure a high quality guest experience.
So… What’s The Ultimate Goal?
The ultimate goal is to provide our guests with such great monthly value that the demand exceeds the capacity we can sell. If the demand exceeds our capacity and we are making a solid profit, then it is possible to turn our venue into a private club with a waitlist of guests wanting to join – wouldn’t that be nice!
I don’t know if we will ever get to the point where our venues could become private clubs, but that is the ultimate goal. Is it possible? It’s definitely possible, but only if we create truly compelling and engaging experiences that are addictive, habit forming, and very easy for our guests to experience again and again.
I hope this article was informative. If you have any questions or comments, please don’t hesitate to reach out to me. My contact information is listed below.
As always, our goal is to continue to provide our existing and future clients with truly unique, proprietary, and branded experiences and services that can’t be copied.
Next Article: LASERTRON Battle Royale Squad
For the first time publicly, I will be sharing the details on our LASERTRON Battle Royale Squad experience. Our newest LASERTRON game experience is a dramatic leap forward in game play and is fully integrated into our LASERTRON Programmable LED Arenas and LT-12.9 Player Gear. It’s a fully branded LASERTRON experience that is totally unique and proprietary to LASERTRON and our Operators.
Thanks for reading,