Angels and Devils - future of the amusement business?

Interesting article in the Wall Street Journal about Best Buy trying to eliminate the customers who cost more than they bring in. Basically they look for customers (devils) who only buy loss leaders, use competitor's coupons to buy at less than retail, process their rebates, or otherwise do things that cost the store more than it makes from the sale, and try to drive those customers away. So they target their store setup and customer mailings to higher-profit customers (angels) instead and make more off fewer customers.

Could this happen in the amusement industry? Could you envision the bigger parks/chains requiring your season pass or ticket to be swiped for all purchases in the park? Easy way to find out if season passholders spend much in the park, if discounted tickets change spending habits, and the like. Could we see the end of season passes? Opinions?

Probably not. Not until the season pass holders like me who are complete "devils" make up a larger portion of their audience. For instance, on my Cedar Fair pass this year, I visited CP 9 times and Dorney once. I bought two magnets at $2 a piece, exactly four drinks, and two soft pretzels, plus one trip to Macaronis (sit down restaurant). Now people that came with me spent a little more on things, but for me, I personally spent *maybe* $200 this year at Cedar Fair properties (GL not included) because of my season pass and parking pass. But, I'm the complete exception, as is everyone else who even comes close to that kind of behavior.

If I were a business director at one of these parks though, you can bet my chain wouldn't share season passes between parks ... but then again, I'm a tightass when it comes to money ;)

After finally getting it to load, and reading the article, I realize my Best Buy is one of these pilot stores! I wondered why the sales had disappeared for the most part! Not that I'm complaining, the better selection of products I want and the test areas are great. Guess I'm somewhere between a "Buzzer" and a "Barry". *** Edited 11/8/2004 9:23:19 PM UTC by Impulse-ive***

Devil gets my vote... when i had my 6flagsohio season pass for me and the kids, totaled 4 passes. we went like 10-16 times a year. we'd have pretzels once in a while, and a few pops... but they couldn't have made much off us....

Thanks for posting this...it's a great article.

This is a very interesting (and somewhat ballsy) approach. In every business you're so focused on driving business & sales that you tend to forget that there are some customers who have a negative impact to the bottom line.

A hotel chain I worked for took a somewhat similar approach to revenue management. We had a computer system that would analyze historical booking patterns and would "turn down" certain stays if the system projected more profitable stays could be obtained. This worked really well for some properties in the chain, but not so great for others. (Eventually, the whole thing got scrapped anyway...)

I'm not sure whether this would be applied to parks, but is an interesting idea. Personally, I think one of the industry's problems is that season passes are way too cheap.

Joel

Anyone who follows my posts knows I'm big on the whole "time/effort vs money" tradeoff.

This line kills me:

"They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts."

I'm sorry, I just can't be hassled to be that damn cheap. I'll buy it, enjoy and be doing something else buy the time this "devil" even ends up with the product.

Desperately cheap people like that scare me. :)

I'm definitely an angel. You'll score WAY more money off of my family as repeated park vistors with season passes than without.

Case in point.

2003 - lived in Allentown. Dorney passes. Visited the park 17 times. Bought something (even if just a round of drinks for the family) at least 3 of 4 visits along with a fun 'end of season souvenir stock-up". Also visited Knott's that year and spent in park and took a 3 day trip to CP complete with rooms at the Breakers and all subsequent in park spending. Without those passes, they'd have seen us twice.

2004 - Living in Pittsburgh. No Kennywood passes. Visited the park twice. Did average in park spending. With a season pass good across the chain, we'd have been there a minimum of 10 times this summer spending a little each visit. If the pass was good chain-wide, you could add a yearly visit to Idlewild and subsequent spending along with incentive to get to Connectcut and spend some more there.

I have no problem spending once I get through the gate. The picnicking, leaving for food, packing food, buying food to take thing isn't worth the few bucks and extra time.

With all things, you're paying either in time or money (the two things that make corporate America work) - whichever you choose is up to you. I prefer to minimize hassle, maximize comvenience and drop a few bucks.

I guess what I'm saying is I'm a model parkgoer (Angel) and parks definitely make more money off of me as a season pass holder than not.

Edit - Joel mentioned hotels in the post above mine. My wife has dealt with this for years as a manager. The corporate entities tend to stress "Heads In Beds" - fill the hotel (even at discounted rates) and the money will be there in ther end. She tends to be more of a believer in pushing rate. No discounted rooms. You'll make about the same in general and those people willing to pay full price are more likely to spend on incidentals driving even more revenue. On top of the less rooms means less costs and money off the bottom line. I agree with her.

*** Edited 11/8/2004 9:56:33 PM UTC by Lord Gonchar***

I swear the folks who breathe rarified air have too much time on their hands. ;)

This already goes on. I know it comes up constantly and people get offended by it, but look at the kinds of cars in the parking lots at Disney parks, heck even half of the Cedar Fair parks, and compare that to the same at most Six Flags parks. Then ask yourself if there's a connection between profitability and the quality of the cars in the parking lot.

What cars in the SF parking lots? Don't parents just drop their kids off? ;)

That makes it sound like the cars actually come to a complete stop? Don't they just slow down to about 20-25 mph and let the kids jump out on the fly?

The policies Best Buy implements are there policies and not the policies customers implement. If they fill their policies are favoring the customer (example, price matching) then perhaps they should eliminate the unfavorable policy or modify it to their advantage. Best Buy already has some of the strictest policies regarding returns. My instinct tells me, while they are seeing big returns in their pilot stores, overtime this will turn out to be a bad program.

Jeff, the cars in the parking lot of my local Six Flags Park are mini vans, up scale $20,000 + sedans, and suv's. The residents in this area complain about not having enough up scale shopping. Doesn't sound like your typical SF park to me.

In some since, every time a season pass is swiped at the gate, your local amusement park can do a calculation to determine how much gate money they are loosing on you each time you visit. If you have a premium pass that gives discounts on food and merchandies, they can then track how much food and merchandise you purchase while inside the park and get an even better idea of how much yo spend while inside the park. So,yeah, in a since, everyone from amusement parks, to grocery stores, to your local CVS is probably already doing this.

The problem with the Devils and Angels idea that Best Buy is using is that they don't charge admission to their store.

The simple fact is the parks bank on people not going for season passes since they think they'll only go once or twice, and then end up going 4-5 times. They also bank on that some of those that buy season passes will not go that often, or avoid the high traffic times, thus not getting their money's worth.

I guess that's one of the reasons I'd rather spend money at independent record stores than corporate chains like Best Buy. I'm very lucky to live within walking distance of one of the best indie record stores I've ever visited (and believe me I've been to a LOT). They even give out free beer to customers (of age of course) on Saturdays while you shop...how cool is that.

I guess that's also possibly why I enjoy visiting the indie parks like HW, Winnie, and IB as well. These parks aren't the corporate whores that some others are in my opinion.

The Mole,

I belive you are completely incorrect with the statements you made in your last paragraph. Parks do not care about people, "not getting their money's worth." That is just bad business. Parks want season pass holders to visit as many times as possible. More visits = more income. Parks sell souveniers, food, drinks, and other goods to season pass holders. That is where they make the money.

I would venture to say that many Amusement parks make more money off of the average season pass holder than the regular day visitor. For me, I hold season passes to Paramount and Cedar Fair. I know that I would not visit as much as I do without the passes. I visit PKI and other Paramount Parks about 3/4 times a year. I visit Cedar Point and other Cedar Fair parks about 10 times a year. If I was not able to obtain a season pass I would probably visit each nore more than two.

I am sure most large Amusement parks have people whose job it is to strategically determine Season Pass prices. I am sure the equation consists of variables such as potential Season Pass prices, Potetential visits, actaul season pass sales of previous years, etc. Parks do not simply make up Season Pass prices, it is a delicate balance of business and economics that is figured to bring the best profit to the park. Personally, I think that two visits is the magic number, though I do not know for sure. which is why most season passes are a little over two times the general admission price.

Say a person will visit a park twice a year without a season pass and spend $35 on tickets and $40 While they are at the park on Parking, food, and drink. So, (2*($35 + $40) = 150. Now a season pass holder might visit the park 4 or more times and spend $25 on parking and foodstuff, $15 with a parking pass. (yes, I am being conservative.) Suppose the following equations with Season Passes being $85. ((1*85)+(4*35) = $225. $75 more then a two day visitors. Even with parking, $25: (((1*85)+(1*25))+(4*25)) = $210, $60 more then a 2 day visitor.

Simply put, parks do not bank on anything, they know the business. If parks had any potential of "losing" money with Season Pass sales, they simply woul dnot sell season passes.

*** Edited 11/9/2004 12:01:18 AM UTC by James K***

More visits does NOT always equal more money for the park, especially when a season pass is involved.

I have a Knotts season pass with the parking option. I can park and spend an entire day at the park and not spend a dime, especially with so many choices to eat down the street. I paid $50 for the pass and $40 for the parking option, so after Knotts got my $90 back in January they could conceivably not get another penny from me.

Now, had I visited just as often and not purchased a season pass the park would be getting $8 a pop for parking and a minimum of $26 on admission each time I visited.

I'm not saying you're wrong...just that there are exceptions.

Moosh,

There are always exceptions, My wife and I are the same way. We can visit the park and bring our own food and drink, not spending a dime on parking becuase of our pass.

But Good Businesses usually calculate for people like us by compensating somewhere else. As I am sure you know.

The car theory sounds interesting but I have a new one. People drive nice cars to Disney World because it's farther away from them then say Six Flags. So of course, they would drive 3 to 24 hours in there luxury sedan or w/e compared to driving 15 minutes to 2/3 hours to go to there nearest theme park in one of there older cars.

Cars were a metaphor for people. I was trying to be discreet.

Just come out and say it Jeff, Six Flags is the victim of too many mullets.

I'm totally a devil. I had around 50 visits to a Six Flags this year (either SFMW or SFGAdv.) and paid for one season pass and never bought anything (souvenier, concession, upcharge) save a couple games of DDR while at the park.

I did bring a couple of friends but they were all either free or for $10.

^ And SF think lowering season pass prices is the answer! :)