Funworld January 2010

‘MAGICYOUR WAY,’ INDEED
5 key principles from Walt Disney World’s pricing structure

The idea was for guests to “have it your way,” said Joni Newkirk, CEO of Integrated Insight, talking during IAAPA Attractions Expo 2009 about the ethos behind the “Magic Your Way” pricing structure that rolled out at Walt Disney World in 2005.

To ensure families can make repeat visits and stay in the park to do all their eating, shopping, and attractions, Newkirk and her team put together an aggressive and successful pricing strategy that included the “park hopper” plan, dining plans, nominal increases for extra days at the parks, extra hours in the parks, luggage delivery, and more.

Other attractions operators can use these key ideas when rethinking pricing and packages, as Newkirk pointed out the five keys to success for implementing a new price structure:

1. Embrace the research and consumer insight. “What will move them to spend more time and money at the park?” she asked. Find out the barriers your customers are experiencing, and overcome them.

2. Know your value proposition. “Do you know who your best guests are? What are they buying and not buying?” Remember that your guests are buying memories when you’re creating packages.

3. Know your guiding principles. Keeping the guest front and center through the process will help you stay focused on the goal at hand. With Disney, this meant removing the affordability barrier, creating value for the price paid, having pricing transparency, and offering customization.

4. Have organizational alignment. Supporters of your strategy can help pave the way for success. That means IT, marketing, operations, sales, and back-of-house support have to be looped in and working toward the success of the new product. “Look holistically at what’s best for the whole business,” she said. “You’ll continually fight those battles if you don’t align.”

5. Take calculated risks. “It takes a focused effort to take the next step,” Newkirk said. She recommended robust research, reasonable hedges, and conservative assumptions to provide a buffer. “If you really want to do something big, you’re probably going to have to take some risks.”
—Amanda Charney

CONCRETETAKEAWAYS TO HELP FACILITIES SAVE MONEY
Can you imagine your business without sticky notes? Believe it or not, it could help save money. CFO of The Sims Group Neva Richardson-Larson offered that suggestion, among many others, as examples of ideas for saving during difficult economic times in the “Business Tune-Up” session at IAAPA Attractions Expo. However, she hastened to point out that these tips are critical even during good times.

“We don’t take the time to make the little more [money] when we’re making a lot,” she said, pointing out that every cent counts in this business. “We forget this is a nickel-and-dime business.”

Even in tough times, she said, price increases can work in the following areas:

• Gate: “If you wrenched it up a little bit, you can save a lot of money,” she said, further illustrating the “nickel and dime” concept. She suggested taking the gate price up by a nominal amount, maybe even just 25 cents.
  
  
• Food and Beverage: Try an increase of 10 cents or so, and track the results to ensure it’s not making a negative impact. “As long as it’s the same quality, it won’t bother [the guests].”
  
  
• Retail: A nominal increase depending on the price of the item could help the numbers. Once again, guests won’t balk at (or even notice) a minimal price increase if they are looking for that perfect gift or souvenir.

She also suggested watching the following employee behaviors that can cost more money:

• Seven-minute rule: Within seven minutes, employees can become unproductive and be tempted to steal.
  
  
• Cash-in, cash-out: Are your employees riding the clock by taking their time?
  
  
• Cut down on overtime.

Richardson-Larson also focused on controlling expenses in the following areas:

Payroll: Try reducing one hour per employee per week, she said, adding that after multiplying that by the number of employees, the number of weeks in the season, plus employee taxes; this cutback can save a business quite a bit.

Supplies: Reducing photocopies, eliminating sticky notes, and printing two-sided can help bring down the cost on office supplies. “Identify those items and eliminate them,” she said. “[These ideas] are not miracles, they’re just things we don’t think about.”

Utilities: Explore the possibility of using more environmentally friendly products, keep track of kilowatts of electricity used (not dollar amounts), and be vigilant about when and where the lights need to be turned on. For example, don’t turn on all the lights when you open if no one’s in the park yet; keep the back of house dark until it is needed.

Marketing: Evaluate the effectiveness of coupons and advertising and eliminate unused coupons; reduce the size of ads. “We have to market our parks, but are we doing it effectively?” she asked.

Vendor Relations: Renegotiate pricing when the contracts are up; negotiate better interest rates with credit cards and banks; ask vendors for 60-day terms.

Theft: “Theft is probably one of the most important things,” she said, adding that statistics have shown that when the economy is down, employee theft will go up.

—Amanda Charney

‘SLEEPING ASSETS’
8 ways for museums to increase revenues

For museum officials looking at ways to increase revenues, they got a jump start first thing Monday morning.

In the first seminar of the Museum and Science Center Track, Bob Rogers of BRC Imagination Arts led a wideranging discussion on how these facilities can learn some lessons from theme parks in manufacturing revenues in areas where there previously were none. Panelists Jim Benedick of Management Resources/ProFun Group, Chevy Humphrey of the Arizona Science Center, and John Robinett of AECOM (formerly ERA) offered the following insights:

1. Try “off siting”—turn the back-of house area into front-of-house space by moving administration, storage, etc., off site. This allows a museum to significantly expand “without moving one wall,” Robinett said.

2. Maximize back-of-house processes by offering behind-the-scenes tours. “These can be more popular than what you have in the front of the house,” Benedick said.

3. Offer dedicated programs to your most loyal supporters—and offer them a discount if they bring a friend.

4. Install upsell attractions. Humphrey put in a rock wall and themed it with educational tidbits to make it fit with the science center’s mission; it’s been a huge success.

5. Put retail outlets in multiple places, just as theme parks offer shopping at the exits of attractions.

6. Take advantage of holidays by producing seasonal merchandise and attractions; some museums are now offering “ghost tours” and trick-or-treating during Halloween, Benedick said.

7. Sleepovers for children are more commonplace now—but try them for adults.

8. The Arizona Science Center is “prom central,” Humphrey said; the facility is booked two years in advance.

Not only will these tips increase revenues by themselves, the panelists said, but they sow the seeds for future growth, as well.

“If you can get them in once, maybe they’ll discover they like it and will come back,” Rogers said.

—Jeremy Schoolfield

ALTERNATE ZOO & AQUARIUMRE VENUE
In “Show Me The Money,” Peter Fingerhut, associate zoo director of marketing and communication at the Columbus Zoo, said “tax monies” are shrinking as a source of funding for zoos and aquariums, so they must develop alternate sources to survive. The first step in that process for any facility is determining exactly what its target audience is, developing a plan to market to it, telling a creative story, and then just allowing the guests to have fun.

He said group sales should account for at least 20 percent of a zoo/aquarium’s attendance and stressed a facility’s group sales reps must “hit the road” to pursue group sales, not just sit back and wait for orders to come in.

Fingerhut also explained how the Columbus Zoo used amusement rides and a waterpark to generate $1.5 million in additional revenue this year, and more than doubled attendance at its “Boo at the Zoo” Halloween event by bringing in Batman and Spider-Man characters for appearances. Fingerhut concluded by quoting the zoo’s marketing spokesman, naturalist Jack Hanna, who said, “Sell the fun and they’ll accidentally learn when they get there.”

—Keith Miller