By: Howard McAuliffe, Redemption Plus

What information about your customer do you consider when deciding your product mix in your redemption counter and merchandiser machines?  Almost everyone knows to consider the demographics of the customer, specifically: age, ethnicity, sex, and socioeconomic status. However, it is also important to consider how much of your business is repeat business and pick your merchandiser and product mix accordingly.

 A location with infrequent repeat customers such as a theme park or tourist heavy locale can rely on high end products in your cranes and merchandiser.  You cannot afford to let players win often, but these customers are less likely to play the machines often enough to understand the payout percentage.  So your risk of them stopping play and impacting sales is low because a week later you have new customers in the location.  Conversely, in your redemption counter, you will want to stock a large variety of low ticket value prizes because you will have fewer customers who save their tickets to win high ticket value prizes.

Locations with a large amount of repeat customers should be merchandised significantly differently.  While it may make sense to have some high end product in your merchandisers for the wow factor, in addition to these prizes it is important to have cranes and merchandisers that contain lower cost prizes that customers can win more often.  Low cost does not mean the cheapest possible items possible, but a low cost item with a good perceived value.  There is an old adage that “Winners make players,” which is absolutely true with customers who come back again and again.  Locations that fit this description include a neighborhood bar or bowling alley, grocery store, or big box retailer.  Again redemption centers work inversely to cranes and merchandisers in this case because repeat customers are able to save tickets to win more expensive items.  Therefore, make sure you have a good mix of medium and high ticket value items for the “Savers” customers who save tickets for bigger and better prizes in the future.

In addition to paying attention to the demographics of your customers, consider the amount of repeat business of a given location.  High cost product with low win rates are best suited to merchandisers in locations with infrequent repeat visitors, while a larger variety of low ticket value is essential in the redemption counter.  Low cost product with higher win rates are better suited to merchandisers in locations with a large amount of repeat customers.  In these locations, add a larger variety of medium and high ticket value product in the redemption center for “Savers.”

By: Gina Krahn

As product life cycles become shorter, the need to follow a lean product innovation process has become even greater.  For years now, Bay Tek’s Product Development team has used a stage and gate system to guide our projects.  In this process, cross-functional teams do parallel “work” dedicated to each stage; while our leadership team reviews and evaluates the work during milestone gate events.   

I am surrounded by brilliant engineers that would argue Stage 3, the development stage, is the most complex and taxing, yet much of my passion lies in the following stage; Stage 4 Field Testing. 

In stage 4, we build a couple prototypes and begin testing with focus groups. To accomplish this, we enlist local organizations like, Boys and Girls Club, schools, Boy/Girl Scouts, and oftentimes enlist co-workers along with their families to come play. Beyond this being just plain fun, we start learning early on what is working and what needs improvement. 

With focus group testing under wraps, next we build 5-6 games for local test.  As part of this journey, we scope out very specific test sites that might best represent our target market.  Another important variable in finding the right test site is their willingness to remain flexible with our team. During this stage, changes are not only expected, they are encouraged. We must implement improvements based on what we learn from this new player base.   

Field testing is more than capturing and tracking revenues, prizes, payout, service calls, etc., it is about gaining a solid understanding of what makes this game or product successful.  To uncover that, we have dedicated individuals on site capturing observations, reading body language, interviewing players, and formulating opinions we would not otherwise get.  Ultimately, we need to know..did the player understand how to use the machine?  Did they have fun playing the game?  Were the instructions clear?  Is the price per play set appropriately? Was there a specific jackpot, prize, or feature that caused an individual player to put in that first quarter?  More importantly…what caused the player to put in that second quarter?  

I personally get so much satisfaction when our team uncovers one little nugget that results in higher game earnings. Like the time we experimented with $10 gift cards at the second prize tier in Road Trip.  The crowd went crazy for this prize, and as a result the numbers climbed!  This experiment proved to be very valuable and is information we shared with the operating community.  

Then 5-20 more units are produced when we feel there is a solid understanding of player patterns.  These test units are sent out to test sites across the world. When this extended field test produces numbers comparable to what we saw during our local testing, we know it’s time to begin seeding the market and preparing for streamline production.  

How can field testing help your business?   It’s about constantly putting new ideas to the test. This may be on your games, or with a new process, the implementation of a new food item, or offering a new experience for your guests. Change it up.  Do not let things get stagnant.  Change up your jackpot earnings, host contests, tournaments, post winner boards, experiment with new prize mixes.  Try anything…the players will let you know when you have scored a home run!

By: Mark Lenske

Over the past 23 years, I have heard many owners and staffers of operating companies say just that; “Our company is a ‘street route’ and just service the street locations.” For a lot of those companies, their business model started back several generations with one cigarette machine, pinball or an old phonograph machine.  Today, I challenge those companies to view their business in a larger scope.  Everyday people get enjoyment from the product or service they provide through coin-operated equipment. Truly, they are in the coin machine industry and for that matter, the entertainment industry. 

Coin-operated equipment covers a multitude of sectors: vending, bulk, video, music, ATM, amusements and finally redemption, both merchandisers and ticket. Many operating companies represent some, if not all of these segments of the business. The one area I see many street operators shying away from is the ticket redemption segment.  Many feel they do not understand it.  I believe they do understand it to a degree and here is why.

Over the past 6-8 years there has been an explosion of street operators getting more merchandisers on their routes.  There has been a rush of not only cranes, but also all the different types of games like: Road Trip, BarberCut, Stacker, etc.  That transition took some time because many of those operators did not understand it and were not prepared to handle the inventory and security of offering higher end prizes.  Needless to say, those games have been a great addition to the route and opened up the doors to new opportunities and revenues for operators.

By getting into merchandisers, those games have made some of those traditional street operating companies more comfortable to branch out into ticket redemption. They have seen ticket redemption as a growing part of our industry, and they have decided to grow with it.  Bowling centers, roller rinks, pizza joints, inflatable locations, batting cages, family restaurants, laser tag locations and others like these are where street operators would typically place videos and cranes.

Adding ticket redemption games to these types of locations will, no doubt, increase the location’s business by offering the families/groups another reason to come, stay longer and have fun which will increase the operator’s revenues as well.

Simply, start small.  It will be ok. I have encouraged operators to do just this.  Many are intimidated because they think they have to do it like Chuck E. Cheese, Dave and Buster’s or other large entertainment centers to be successful.  They say, “I can not afford to set a location like that” and they are probably right.   The fact is, not all families can afford to go to places like that either.  Those families may want to plan a party or go to a local neighborhood location to get some of the same excitement a big box store provides.   Adding ticket redemption to existing locations offers your customers that experience and becomes a terrific ROI for you too.  Again, start small with 8-12 redemption games with a “vending type” machine that will count/shred tickets and dispense prizes right from the machine.  Or if there is room, a small 6’-8’ glass display counter with a back wall to show and hang the prizes works great also.  It is that simple to get started.

Yes, there is more work to do and things to manage with ticket redemption games.  That is a fact of this business.  Operating companies have a capable service staff that is able to fix just about anything, just ask them.  Ticket redemption games usually have more moving parts, motors, switches and gears, but if they can fix a pinball, basketball game or crane machine, they will have no problem fixing a Smokin’ Token, Fireball Fury or Big Bass Wheel. 

How can you as a street operator get more information about getting involved with ticket redemption?  First, call your local game distributor and ask them.  They have tons of experience and ideas to share.  Go online and visit manufacturer’s websites like ours at www.baytekgames.com  where we offer great tools and tips on selecting the quantity of games and the game mix depending on square footage of your space.  Next, call or visit manufacturer sales reps at our industry trade shows to discuss your ideas.  We are more than happy to talk to you and help figure out if ticket redemption is right for you and the location you are thinking about.  Lastly, search out prize supply companies who you will be buying the prize product from.  They will give you suggestions on what to buy and how to display it so you get the most out of our redemption counter or machine.

As we typically say at BayTek, “Don’t be A-Scared” to try something new on your route.  We are all worried about the unknown at times.  Get educated. Ask questions. Include ticket redemption into your route.  You won’t be disappointed.

 By: George McAuliffe

All of us have been there in some way. You are driving home from an entertainment experience. It might be the movies, it might be an FEC. You’re thinking something like this: “I just dropped $XXX.00” in Y Hours. What did I get for it? Was it worth it?”  In the case of FEC’s with redemption, the question often includes some version of “and we walked out with these xxxxxx prizes!!!!”

The answer to “Was it Worth it?” is the customers perception of the value equation. That decision is critically important to the venue. On the next rainy Saturday, when the family wants to go to your FEC, you want the financier of that visit to have positive memories- and to answer “YES-it was definitely worth it!”

The percentage cost of merchandise sold is what determines the value equation for our players. Redemption operators can learn from the retail world. Retailers apply a “markup” to their wholesale cost to arrive at the retail price. A markup of 4 applied to an item with a wholesale cost of $1.00 means the item would sell for $4.00.

If your redemption cost of sales is 20% of redemption game sales in purchasing power your retail equivalent is 5. A guest spends $5.00 on redemption games for redeemed merchandise with a $1.00 wholesale cost.

Table One

Table One illustrates how the various factors work together to deliver the value equation. At a retail equivalent of 5 we are already over a typical retailer markup of 3, but not by that much. Plus, we deliver the magic of redemption- the fun and excitement we provide along with the merchandise; we believe the guest will perceive adequate value at these levels!

A few years back, I talked to an operator who told me he bought all his merchandise at a local dollar store. If he paid a dollar for it he would “mark it up” as high as he thought he could get away with. He showed me an item that he had on his redemption counter shelf at 800 tickets and bragged that he “made” $7 profit on the item. This is a common misconception- this operator thinks you make your money at the redemption center.  Not in our business!  Redemption money is made in the games. The games are the cash registers.  The merchandise is used to drive game play.

So back to our friend who bought an item for $1.00 at the Dollar Store and “marked it up” 8 times to 800 tickets (I’m using a ticket value of 1 cent for simplicity of example). Let’s assume his average price per play on games is 35 cents and his desired game payout is 20% on redemption sales. Our friend needs to pay out 7 tickets per game. Our friend’s customer would then have to play 114 games at .35 cents per game, spending $40.00 on games. In return our friend hands him an item you can get at the Dollar Store for a dollar. How much repeat play will that stimulate?

 George McAuliffe is a 30 year family entertainment center operator and president of Pinnacle Entertainment Advisors by Redemption Plus. Pinnacle is an industry consulting firm www.grouppinnacle.com. George has operated entertainment centers from 2,000 to 150,000 square feet and has operated redemption and merchandise games since 1983. He is a regular speaker at industry conventions worldwide, and writes for RePlay and International Bowling Industry Magazine. He can be reached at 913-563-4370 or email at gmcauliffe@redemptionplus.com if you’d like to discuss further. 

By: Mark Lenske

Over the past 23 years, I have heard many owners and staffers of operating companies say just that; “Our company is a ‘street route’ and just service the street locations.” For a lot of those companies, their business model started back several generations with one cigarette machine, pinball or an old phonograph machine.  Today, I challenge those companies to view their business in a larger scope.  Everyday people get enjoyment from the product or service they provide through coin-operated equipment. Truly, they are in the coin machine industry and for that matter, the entertainment industry. 

Coin-operated equipment covers a multitude of sectors: vending, bulk, video, music, ATM, amusements and finally redemption, both merchandisers and ticket.  Many operating companies represent some, if not all of these segments of the business. The one area I see many street operators shying away from is the ticket redemption segment.  Many feel they do not understand it.  I believe they do understand it to a degree and here is why.

Over the past 6-8 years there has been an explosion of street operators getting more merchandisers on their routes.  There has been a rush of not only cranes, but also all the different types of games like: Road Trip, BarberCut, Stacker, etc.  That transition took some time because many of those operators did not understand it and were not prepared to handle the inventory and security of offering higher end prizes.  Needless to say, those games have been a great addition to the route and opened up the doors to new opportunities and revenues for operators.

By getting into merchandisers, those games have made some of those traditional street operating companies more comfortable to branch out into ticket redemption. They have seen ticket redemption as a growing part of our industry, and they have decided to grow with it.  Bowling centers, roller rinks, pizza joints, inflatable locations, batting cages, family restaurants, laser tag locations and others like these are where street operators would typically place videos and cranes.

Adding ticket redemption games to these types of locations will, no doubt, increase the location’s business by offering the families/groups another reason to come, stay longer and have fun which will increase the operator’s revenues as well.

Simply, start small.  It will be ok. I have encouraged operators to do just this.  Many are intimidated because they think they have to do it like Chuck E. Cheese, Dave and Buster’s or other large entertainment centers to be successful.  They say, “I can not afford to set a location like that” and they are probably right.   The fact is, not all families can afford to go to places like that either.  Those families may want to plan a party or go to a local neighborhood location to get some of the same excitement a big box store provides.   Adding ticket redemption to existing locations offers your customers that experience and becomes a terrific ROI for you too.  Again, start small with 8-12 redemption games with a “vending type” machine that will count/shred tickets and dispense prizes right from the machine.  Or if there is room, a small 6’-8’ glass display counter with a back wall to show and hang the prizes works great also.  It is that simple to get started.

Yes, there is more work to do and things to manage with ticket redemption games.  That is a fact of this business.  Operating companies have a capable service staff that is able to fix just about anything, just ask them.  Ticket redemption games usually have more moving parts, motors, switches and gears, but if they can fix a pinball, basketball game or crane machine, they will have no problem fixing a Smokin’ Token, Fireball Fury or Big Bass Wheel. 

How can you as a street operator get more information about getting involved with ticket redemption?  First, call your local game distributor and ask them.  They have tons of experience and ideas to share.  Go online and visit manufacturer’s websites like ours at www.baytekgames.com  where we offer great tools and tips on selecting the quantity of games and the game mix depending on square footage of your space.  Next, call or visit manufacturer sales reps at our industry trade shows to discuss your ideas.  We are more than happy to talk to you and help figure out if ticket redemption is right for you and the location you are thinking about.  Lastly, search out prize supply companies who you will be buying the prize product from.  They will give you suggestions on what to buy and how to display it so you get the most out of our redemption counter or machine.

As we typically say at BayTek, “Don’t be A-Scared” to try something new on your route.  We are all worried about the unknown at times.  Get educated. Ask questions. Include ticket redemption into your route.  You won’t be disappointed.

By: Mark Lenske

Over the past 23 years, I have heard many owners and staffers of operating companies say just that; “Our company is a ‘street route’ and just service the street locations.” For a lot of those companies, their business model started back several generations with one cigarette machine, pinball or an old phonograph machine.  Today, I challenge those companies to view their business in a larger scope.  Everyday people get enjoyment from the product or service they provide through coin-operated equipment. Truly, they are in the coin machine industry and for that matter, the entertainment industry. 

Coin-operated equipment covers a multitude of sectors: vending, bulk, video, music, ATM, amusements and finally redemption, both merchandisers and ticket. Many operating companies represent some, if not all of these segments of the business. The one area I see many street operators shying away from is the ticket redemption segment.  Many feel they do not understand it.  I believe they do understand it to a degree and here is why.

Over the past 6-8 years there has been an explosion of street operators getting more merchandisers on their routes.  There has been a rush of not only cranes, but also all the different types of games like: Road Trip, BarberCut, Stacker, etc.  That transition took some time because many of those operators did not understand it and were not prepared to handle the inventory and security of offering higher end prizes.  Needless to say, those games have been a great addition to the route and opened up the doors to new opportunities and revenues for operators.

By getting into merchandisers, those games have made some of those traditional street operating companies more comfortable to branch out into ticket redemption. They have seen ticket redemption as a growing part of our industry, and they have decided to grow with it.  Bowling centers, roller rinks, pizza joints, inflatable locations, batting cages, family restaurants, laser tag locations and others like these are where street operators would typically place videos and cranes.

Adding ticket redemption games to these types of locations will, no doubt, increase the location’s business by offering the families/groups another reason to come, stay longer and have fun which will increase the operator’s revenues as well.

Simply, start small.  It will be ok. I have encouraged operators to do just this.  Many are intimidated because they think they have to do it like Chuck E. Cheese, Dave and Buster’s or other large entertainment centers to be successful.  They say, “I can not afford to set a location like that” and they are probably right.   The fact is, not all families can afford to go to places like that either.  Those families may want to plan a party or go to a local neighborhood location to get some of the same excitement a big box store provides.   Adding ticket redemption to existing locations offers your customers that experience and becomes a terrific ROI for you too.  Again, start small with 8-12 redemption games with a “vending type” machine that will count/shred tickets and dispense prizes right from the machine.  Or if there is room, a small 6’-8’ glass display counter with a back wall to show and hang the prizes works great also.  It is that simple to get started.

Yes, there is more work to do and things to manage with ticket redemption games.  That is a fact of this business.  Operating companies have a capable service staff that is able to fix just about anything, just ask them.  Ticket redemption games usually have more moving parts, motors, switches and gears, but if they can fix a pinball, basketball game or crane machine, they will have no problem fixing a Smokin’ Token, Fireball Fury or Big Bass Wheel. 

How can you as a street operator get more information about getting involved with ticket redemption?  First, call your local game distributor and ask them.  They have tons of experience and ideas to share.  Go online and visit manufacturer’s websites like ours at www.baytekgames.com  where we offer great tools and tips on selecting the quantity of games and the game mix depending on square footage of your space.  Next, call or visit manufacturer sales reps at our industry trade shows to discuss your ideas.  We are more than happy to talk to you and help figure out if ticket redemption is right for you and the location you are thinking about.  Lastly, search out prize supply companies who you will be buying the prize product from.  They will give you suggestions on what to buy and how to display it so you get the most out of our redemption counter or machine.

As we typically say at BayTek, “Don’t be A-Scared” to try something new on your route.  We are all worried about the unknown at times.  Get educated. Ask questions. Include ticket redemption into your route.  You won’t be disappointed.

By: Mark Lenske

Over the past 23 years, I have heard many owners and staffers of operating companies say just that; “Our company is a ‘street route’ and just service the street locations.” For a lot of those companies, their business model started back several generations with one cigarette machine, pinball or an old phonograph machine.  Today, I challenge those companies to view their business in a larger scope.  Everyday people get enjoyment from the product or service they provide through coin-operated equipment. Truly, they are in the coin machine industry and for that matter, the entertainment industry. 

Coin-operated equipment covers a multitude of sectors: vending, bulk, video, music, ATM, amusements and finally redemption, both merchandisers and ticket. Many operating companies represent some, if not all of these segments of the business. The one area I see many street operators shying away from is the ticket redemption segment.  Many feel they do not understand it.  I believe they do understand it to a degree and here is why.

Over the past 6-8 years there has been an explosion of street operators getting more merchandisers on their routes.  There has been a rush of not only cranes, but also all the different types of games like: Road Trip, BarberCut, Stacker, etc.  That transition took some time because many of those operators did not understand it and were not prepared to handle the inventory and security of offering higher end prizes.  Needless to say, those games have been a great addition to the route and opened up the doors to new opportunities and revenues for operators.

By getting into merchandisers, those games have made some of those traditional street operating companies more comfortable to branch out into ticket redemption. They have seen ticket redemption as a growing part of our industry, and they have decided to grow with it.  Bowling centers, roller rinks, pizza joints, inflatable locations, batting cages, family restaurants, laser tag locations and others like these are where street operators would typically place videos and cranes.

Adding ticket redemption games to these types of locations will, no doubt, increase the location’s business by offering the families/groups another reason to come, stay longer and have fun which will increase the operator’s revenues as well.

Simply, start small.  It will be ok. I have encouraged operators to do just this.  Many are intimidated because they think they have to do it like Chuck E. Cheese, Dave and Buster’s or other large entertainment centers to be successful.  They say, “I can not afford to set a location like that” and they are probably right.   The fact is, not all families can afford to go to places like that either.  Those families may want to plan a party or go to a local neighborhood location to get some of the same excitement a big box store provides.   Adding ticket redemption to existing locations offers your customers that experience and becomes a terrific ROI for you too.  Again, start small with 8-12 redemption games with a “vending type” machine that will count/shred tickets and dispense prizes right from the machine.  Or if there is room, a small 6’-8’ glass display counter with a back wall to show and hang the prizes works great also.  It is that simple to get started.

Yes, there is more work to do and things to manage with ticket redemption games.  That is a fact of this business.  Operating companies have a capable service staff that is able to fix just about anything, just ask them.  Ticket redemption games usually have more moving parts, motors, switches and gears, but if they can fix a pinball, basketball game or crane machine, they will have no problem fixing a Smokin’ Token, Fireball Fury or Big Bass Wheel. 

How can you as a street operator get more information about getting involved with ticket redemption?  First, call your local game distributor and ask them.  They have tons of experience and ideas to share.  Go online and visit manufacturer’s websites like ours at www.baytekgames.com  where we offer great tools and tips on selecting the quantity of games and the game mix depending on square footage of your space.  Next, call or visit manufacturer sales reps at our industry trade shows to discuss your ideas.  We are more than happy to talk to you and help figure out if ticket redemption is right for you and the location you are thinking about.  Lastly, search out prize supply companies who you will be buying the prize product from.  They will give you suggestions on what to buy and how to display it so you get the most out of our redemption counter or machine.

As we typically say at BayTek, “Don’t be A-Scared” to try something new on your route.  We are all worried about the unknown at times.  Get educated. Ask questions. Include ticket redemption into your route.  You won’t be disappointed.

By: Rick Rochetti

Recently I was invited to attend the 2012 AMOA Council of Affiliated State meeting in Phoenix, Arizona. I was representing Bay Tek Games as part of the "Game Makers Panel of 2012." The speaker panel was made up of 13 different companies that manufacture and support a variety of products, from FEC pieces to street pieces, for the amusement industry.  

It was refreshing to be able to interact with 69 attendees from 28 different states. It was both beneficial and eye-opening. The common issues that operators face and the sharing of information showed the importance of being part of a state or national association.

The panel was given a list of questions in advance to be ready to speak on. My question was, "What role do you view national, state and/or regional associations playing in the future?" This question really hit home to me. I believe that this topic is something that everyone involved in our industry should take an active role in regardless if they are a manufacturer, distributor or an operator. The importance of the AMOA and AMAA is becoming more evident every day in our industry. 

Why is it important?

I would encourage every operator to join a state and/or national association because...

You will be part of a group

Besides being part of a group being human nature it is a good exposure for you and your company. No one has a business and thinks "I hope it stays small and we don't grow." Getting exposure for your company through an association is one step in the positive direction.

Have your opinions, thoughts and needs to be heard

You might have ideas or experiences that could affect other operators and by sharing those to those that have yet to experience Will help them out and vice versa. By doing this it will allow the industry to become stronger.

Have the ability to act on those opinions, thoughts and needs and having the support of others

Your voice can be heard more often and louder when while belonging to an association, because it shows your invested interest in the industry. 

Keeps you up to date with industry news and events

Our industry associations have a variety of tools (emails, newsletters, magazines, seminars, webinars, meetings and etc.) to keep you informed on current news, the latest products and invitations to events.

A social network of folks with similar interests and beliefs 

You can gain a network of peers that are in the same interests and going through some of the possibly hardships. To be surrounded by peers that could go through the same situations could cause you to be a mentor and sometimes possibly the student.  These trusting relationships again will help keep the industry growing. 

Attend industry educations classes and seminars

In our industry state and national associations keep all their members up to date with information at trade shows with multiple classes and seminars being offered. These classes and seminars are typically put on by operators for operators for you learn to the newest up-to-date ideas and business strategies.

Gain long lasting friendships and networking

 By being a member of an association you will become accustomed to other members and possibly gain friendships. These friendships can help you and possibly teach you how to better your business and vice versa.  

By: Howard McAuliffe, Redemption Plus

What’s the most important factor in deciding what product to buy?  Many people will say price, many will say quality, but the real answer is the product that will make the most money.  This often isn’t the cheapest or the best quality.    In this article, I will outline several factors that should be considered when selecting a merchandise mix.  This includes licensed product, generic product, and how to create the right mix to drive sales.

Licensed products are often lumped together as one distinct category when the quality of a license varies greatly in terms of physical quality as well as the value of the brand.  For example, plush companies will make a licensed product for retail stores and then a lower quality and cheaper option for amusement.  The cost of the two can vary greatly because of the expense of using higher end materials and the labor to create detailed work.  The TY brand Hello Kitty doll you see at Hallmark will be significantly better quality than the Hello Kitty you find at the dollar store or in your average crane.  Two years ago, most operators would say it only makes sense to use the amusement quality piece.  However, the Angry Birds phenomenon has shown us that it is possible to pay more for the right license.  Today’s merchandisers, which vend items as expensive as Ipad’s, are further evidence that we can use high end items to drive sales.  So, when evaluating a licensed product, it’s important to consider the physical quality of the piece.

Even within licensed products there is a wide range in value to the license itself.  Currently Angry Birds is clearly the hottest brand; it’s driving sales in customer’s cranes and doing very well in redemption.  A Minnesota Vikings bear is also a licensed product but, if it is put in a location in Miami in the spring, it will be less valuable than a nice generic bear.  While license products can drive sales, they must be the right license, at the right time, and in the right market. 

There is an even greater range in value within the generic category.  For example, you can buy a Nerf gun that is $6 or a similar generic gun for significantly less.  Which is better, the answer is it depends.  If the generic gun is half the price of Nerf and doesn’t shoot or breaks before the kid leaves the store, you have a return to deal with.  Even more damaging, an unsatisfied customer, so it’s clearly not worth it.   If, however, the cheaper gun is half the price and works as well or nearly as well then you have provided your customer a good value.  The bottom line is focus on value not simply on cost.  While there is a variety of value within both the generic and licensed categories, there are some strategies you can implement to maximize the impact of your product mix.

I would highly recommend having a mix of cranes, merchandisers, and a redemption counter that has high end product as well as less expensive items that can be more easily won.  It is important to separate these types of items intentionally and overtly as you would see at a retail store.  If you go to Nordstrom’s you will see the high end shoes in one area, the middle price range in another, and the regular product in a third section.  Each is clearly named and separated but in close proximity to the others.  Merchandisers should be separated similarly with some machines, or at least rows within a machine, clearly containing high-end name brand product and others with lower cost product that can be easily won.   We suggest that our customers try using themed kits for older merchandisers that may have had their sales dip.  You can draw attention to an old machine by using Lego, Angry Birds, or other licensed product to stimulate sales.  Your redemption counter should be segmented to show boy products together, girl products together, high end electronics, etc.  Another key is rotating items regularly, especially in locations with a lot of repeat customers.  While you will certainly have staples, there should be new product to play for monthly.

In conclusion, work to give your customer a good value in the products offered.  When selecting licensed products, consider the quality of the product and the value of the license.  With generic product it is absolutely imperative to offer product that works and is a reasonable quality.  Customers often spend significant amounts of money and, while the entertainment value is very important, they also want to walk away with a quality item.  Even if it’s a 10 ticket popper, the popper needs to pop.  Make sure to have a variety of products in your facility so customers can win something of good value no matter how much they’re willing to spend.  If a customer wants to spend $5 and gets an $.80 toy, make sure it is a fair value.  At the same time some customers will spend money and save for a $500 electronic item so it should be offered.  The bottom line is offer a mix of quality products and pay attention to the cash box, because that is where you really find the answer to how well your products are driving sales.

By: Anna Heck

Consider the following dilemma; the people in our industry are aging. Each and every one of us remembers the “good old days”. We talk about them and we laugh about them, but how do we replicate it?  How do we as an industry pass the passion on to the next generation? As always it starts at the top by replicating your passion, drive and knowledge.  

REPLICATE Yourself…

R- Replicate yourself this year by choosing one employee to mentor. Choosing that one person who has drive, energy, heart, and a desire to take advantage of what you are offering. With this same criteria have your TOP mangers, tech and food service manger choose one employee to mentor and build your team.

E- Educate your employees by having them attend trade shows. Attending the show seminars will allow your employees to gain knowledge first hand. When our industry trade shows started it was to give us a forum to exchange knowledge, make connections and experience new equipment and ideals.  All of this holds true today; so bring that extra person to the show this year.  

P- Potential is why you hired that employee. Now expand their knowledge by mentoring them into a leader.

L- Lead by example – Are you a member of your state association? Are you a member AMOA/AAMA? Do you receive trade magazines, e-mails from industry magazines or your local distributor or manufacturers? Do you pass them along or do they sit on your desk unopened? Open it, read it and pass them along!

I- Invest in your current employees by providing them the tools and education to reach their full potential and exceed your expectations.

C- Confident and capable employees will interact with your guest in a constructive manner; creating a positive experience for every guest.

A- Assess the abilities of all employees. Make sure you are applauding employees when they have success, but also remember that good employees will learn from mistakes, so take the time to discuss how things could have been handled differently.

T- True leadership is replicating the best in you.  Make sure you are always setting a good example.  You can not expect your employees to be the best if you’re not.

E- Expose your team to the competition. Do they know who your competition is in the area? Reward employees who visit the competition in person or research the competition’s web site on their own time.  It will give them some perspective and they will take ownership of your place. 

By determining what employees to mentor you can work together to provide tools and a direction for your location. You will be instrumental in molding your employees and will hopefully become a successful team and maintain a long life in our industry.