CHICAGO -- As the Amusement and Music Operators Association held its midyear board meeting in Savannah, GA, from Sept. 23 to 27, the association had recourse to information as rare as it is important: the results of AMOA's first in-depth member survey in well over a decade. The survey was conducted last spring on AMOA's behalf by Circone + Associates, a branding and marketing firm that consults to the national operator group. Using Survey Monkey, an online survey tool, C+A invited 1,400 AMOA members to participate in the study conducted this past spring.
More than 70 operators in 26 states responded, most answering the majority of 61 questions. The results were embodied in a White Paper that C+A presented to AMOA leadership. The statistical content of that document was eye-opening, if not surprising.
The typical responding AMOA member is in his 40s or 50s; prefers a GM vehicle as a route car; has a couple of years of college education (but not a college degree, in 70% of the cases); has fewer than 10 employees; and estimates his annual route collections are between $500,000 and $1 million.
Above all, the average AMOA member is a fiercely independent thinker and "do-it-yourselfer." For example, member operators tend do business with small local banks; most book their own hotel and travel arrangements.
"AMOA is the trade association equivalent of the Tea Party," said C+A president Brad Circone, whose organization ran the study.
DEMOGRAPHICS AND EARNINGS
The survey confirmed the graying of the operator population, at least among association members. Results showed the largest segment (32.6%) of responding AMOA member operators are between 50 and 59 years old. Another 30.4% are between 40 and 49. Yet another 30.4% are between 60 and 69 years old.
An important part of the survey was an attempt to get a handle on operators' annual revenues. Results: 30% of responding operators have route collections between $500,000 and $1 million; 22.5% report collections between $250,000 and $500,000 and another 22.5% said they generate $1 million to $2 million.
However, many operators remained close-mouthed about their earnings. Circone said only 57% of the operators who took the survey entered responses to questions about annual income.
HELP! OPERATORS AND PROMOTIONS
Beyond demographics and earnings, the survey results also pointed to some key opportunities for the 63-year-old trade group. For example, AMOA has plenty of room to educate operators on how to be better self-promoters, said Circone.
Responding operators said only 20% of their locations have active promotions. Asked to identify the largest barriers to promotion, 34% pointed to location apathy; 31% mentioned lack of dedicated staff; and 18% said they just weren't sure how to get started running promotions.
Just one operator in 20 said they run leagues in 80% or more of their locations.
While 67% of operators said they have a company website, most respondents (58%) admitted they believe their website is "not effective" at promoting their businesses. Half (51%) of responding operators said they don't use social media for business promotion.
Reading between the lines of the results, Circone offered a shrewd interpretation of these figures.
"Operators say they want to promote, but it's not necessarily that we don't know how," he said, "and as an industry we don't understand the importance of why."
At the request of AMOA leaders, C+A is preparing to launch some proven, "street-ready promotional programs" that AMOA members can use to boost cashbox income -- especially for pool and darts, Circone said.
"C+A wants to get AMOA into the business of helping operators to promote their equipment as an entry in the business -- not as a nice extra, but one of the foundational elements just like service and collections," the marketing expert said.
In addition, as reported in VT last spring, Circone + Associates has proposed a high-level marketing strategy for AMOA to position its members as America's leading providers of on-premise entertainment, especially in cooperation with "lifestyle" brands such as the leading beverages, foods and other products that are sold in America's taverns and restaurants (see VT June).
Circone puts it this way: "AMOA will be a true activation leader that goes out and represents the operators and locations to lifestyle brands" and nails down regional and national "opt-in" marketing and promotional deals for its members as a group.
He said his firm is "getting closer to being ready" to launch these kinds of high-level marketing labors.
Related to the promotional efforts of typical AMOA members is the percentage of survey respondents who reported having certain brands of games or jukeboxes online.
The survey asked operators to report the online status of 26 specific brands of equipment: Were most of these machines connected to the Internet or not? Circone said results showed operators have successfully connected the majority of their games when it comes to only one brand: Incredible Technologies. IT leads other game devices in its percentage of operators who have more than 95% of their games online, Circone reported.
The survey showed 37% of responding AMOA operators has more than 95% of their IT games online, Circone said. Following are AMI's Megatouch and Raw Thrills, respectively.
However, enthusiasm for networking of games is not universal. Even when it comes to market leader Incredible Technologies, the survey showed that 29% of responding operators have refused to connect any of their IT games to company's network, IT Net.
The highest percentage of networked equipment, according to the survey, can be found in the music sector. Of the operators polled by Circone, 47% of them said more than 95% of their music devices are connected to a music network.
"When operators see clear benefit to connecting to the Internet, they'll do it," Circone said. "Nearly every leading videogame manufacturer in the industry has said 'Connect to my network and you will make more money.' I believe this claim is very often true, because I've seen it proved time and again when we have worked with individual operators on building their routes. But the number of devices that are not online today, even though they could be -- and arguably should be -- is yet another challenge. Connectivity is equity," Circone claimed.
Circone believes that operators' enthusiasm for online game connectivity peaked several years ago and now has "fallen off the table a bit" with a shrinking number of video and dart games online. "This enthusiasm needs to be reawakened, quickly," he said. "Online is the 'present future,' not the distant future, and it is changing business models of amusement manufacturers and operators. The term 'splits' will soon be extinct, replaced by 'profit share.'"
Music may serve as a catalyst to encourage operators to view networking more favorably, he said, because it has already become the norm for so much of the industry.
"The percentage of jukeboxes that are Internet-connected is simply exploding," Circone said. "It is an essential part of the device, like the network and Web on a smartphone. Why have one without connectivity? It's a disservice to all," he added.
Perhaps the best news for AMOA from the survey: results indicated that the association inspires strong trust and loyalty among members.
"We tried to get operators to use language that would give us a clear understanding of how they see themselves and AMOA," Circone said. "We asked, what are three words that describe AMOA and your relationship with the association?"
The results: 19.2% said they associate AMOA with education and educational value; 17.3% said for them, AMOA is about resources and being resourceful; and 15.4 % said the association's prime value is that it creates opportunities for networking.
"Education, resources and networking are all emotional words about wanting to be together, investing in ourselves and improving our businesses," Circone explained. Another measure of operator loyalty: 79% of respondents have been AMOA members for more than a decade.
But when C+A asked operators to name their most important reasons for joining AMOA, all those aspirational words and emotional affinities disappeared. Operators went straight to the bottom line and talked about hardnosed economic incentives. Specifically, they mentioned such member benefits as free attendance at the Amusement Expo and discount prices for music licenses from the Jukebox Licensing Organization.
"Given the strong emotional ties that operators have to AMOA, it is ironic that most operators cite economic factors as their most important reasons for joining the association," Circone observed. "Yet joining and belonging are two entirely different things. They join for economics; they stay for education, resourcing and networking."
This disparity between "how you feel about AMOA" and "why you join AMOA" suggests that AMOA needs to clarify its basic value proposition to operators, including both members and nonmembers, Circone said.
"We have to help our AMOA members fully understand, appreciate and translate the value of the association to our nonmembers," he said. "We have to make it clear to the operator community that membership in AMOA is simply something you do as a matter of course. Like promotions, membership should be something that operators see as a normal part of doing business, because it truly connects and catalyzes your business on a daily basis.
"At the very least," Circone continued, "being a part of something greater than yourself allows you to share, learn and implement tools effective to the trade, that you would have never otherwise been exposed to. It quickens the learning curve exponentially. It creates value, not discount. Membership should not be perceived as merely a matter of getting discounts on expo tickets and JLO licenses. That's not belonging to something -- that's discount shopping. We need relationships we value, not ones we discount."
Part of C+A's mission for AMOA is to help the association improve its own marketing -- which means, in part, clarifying the association's value proposition to members and potential members.
"What's challenging here," said Circone, "is AMOA does offer a lot of value -- almost too much. There is so much good that operators can get from joining this association that it's sometimes hard to know what to focus on."
At the same time, Circone conceded that much of AMOA's value is amorphous or difficult to quantify.
For example, how can an operator put a precise dollar value on a seminar that gives him a powerful new management tool, or even changes the way he thinks about his entire business from top to bottom?
How does an operator measure the ROI that comes from "networking" with fellow operators ... people who become lifelong friends as well as business resources for advice, counsel, ideas and examples?
Adding to the challenge of communicating AMOA's value proposition to the operator is one more fact. The most easily identifiable economic advantages of AMOA membership are "not necessarily adaptable and relevant enough for the average operator," Circone said.
For example, fewer and fewer operators run CD jukeboxes, so JLO license discounts are a decreasingly attractive benefit. "Such benefits may not be relevant to the typical operator today," Circone said. "So we have to change the way these are packaged, reflecting the important benefits and relevant reasons for membership in the organization."
When C+A asked association members to identify the biggest obstacles between themselves and AMOA, the respondents mentioned the following reasons most often: first, perceived lack of value and lack of value-added services. Second, lack of communication. And third, tied with this barrier to growth, was AMOA's perceived "unwillingness to try new things."
In other words, many AMOA members who responded to the survey felt that AMOA's benefit package and agenda may have settled into a "same-old, same-old" routine in recent years.
Circone said his company has been tasked by AMOA leaders with several specific initiatives, some of which are driven by the information revealed in the member survey. Two of these initiatives have already been discussed: the promotional programs for pool and darts, and the national branding and marketing initiative.