Saturday, November 18, 2017 | Today's Vending Industry News
Innovative Payment Strategies Are Here, And Work Fine

by David Goldman
Posted On: 4/3/2014

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TAGS: cashless vending, payment systems, amusement facility POS, POS systems, Hank Schlesinger, pricing strategies, smart card technologies, family entertainment centers, mobile payments, smart cashless cards, David Goldman, Ideal Software Systems

In his editorial in the January issue of Vending Times, Hank Schlesinger noted that the "first hints" of applying innovative pricing strategies through smart card technologies are starting to hit the market. These tools are actually available to FEC operators now, however, and many of them are fully developed. Current and upcoming generations of customers are likely more accustomed to having a smartphone or a credit card in their pockets than cash. As a snapshot, consider that consumer purchases made with mobile devices topped $25 billion in the U.S. alone in 2012. As these realities continue to press on the amusement industry, how will arcades and FECs attract these demographics?

A key strategy for operators to succeed with "millennials" and beyond is to focus on their customers' purchasing habits. Debit-style or "smart" cashless cards are the entry point to targeting these customers. Systems available today can bring gameplay, access control for attractions and customer loyalty programs under one card, with the ability to give facility owners or game operators real-time reporting on system health and performance, as well as play patterns and profits. Cashless systems can be configured for points or tickets, or even both, depending on the game or customer preference. The depth you get depends on the system you choose.

All of this system flexibility gives operators the ability to get creative with promotions targeting the customers of today and tomorrow. Let's explore a few ways that you can take advantage of the cashless platform now.

Offer your customers an upsell opportunity the moment they get in the door. Just want a $10 card to play a few games? Why not upgrade to the $15 card, which comes with a bonus five bucks for new loyalty program members? That bonus $5 of gameplay just earned you an extra 30% in sales, and now they're invested in playing more. If they leave with a few dollars left on the card, you can bet they'll be back to spend it. Now that they're in your loyalty system, you can further incentivize them to do just that.

Sell timed access instead of gameplay. How much do your customers play on an average visit? Have you considered selling gameplay by time rather than by each play of a game to lengthen visits and increase sales at other profit centers? For example: Sell a game card containing two hours of unlimited play for a fixed price, with or without tickets (or points). Now your customer spends more time at your arcade, boosting the bottom line. Fun Fore All, an FEC in Cranberry Township, PA., promotes discounts to businesses in its region as benefits to high-performing employees. Although these special cards are good for a specific amount of time -- say, two hours of play -- guests also purchase food and drinks, and the loyalty program for which they registered gives them a reason to come back to earn more points toward redemption.

Turn slow days upside down. Adjust your pricing to pull more customers at off-peak times. If a facility sees a drop-off in gameplay on Tuesdays, for example, it could advertise discounted games for Tuesdays to attract more visitors. The same strategy applies to specific game categories; racing games sponsored by the local dirt track and family nights with discounts to loyalty members on multiplayer games and attractions are two examples.

Use a native system to take advantage of full integration. If your cashless system is part of a native POS system, then there are possibilities to expand far beyond games and attractions -- and that's where the fun really begins. Any inventory item, from food to beverage to retail swag and beyond, can be added to a cashless card promotion. Sell cards on your website that incorporate promo packages with specific game entitlements and foodservice items, as well as offerings for corporate events or birthday parties when they book online. Now your promotion can include virtually anything not nailed down.

Give your VIPs the velvet rope experience. The customer loyalty application of cashless cards allows you to track habits and create benefits specific to groups that drive desired behaviors. You can reward guests who reach predefined levels of spend by offering VIP (Very Important Player) pricing, which can be different than the standard game price.

Smartphones are digital wallets. Say it again. Take advantage of this generation's interconnectivity. It's already possible to use a smartphone for access control to attractions such as laser tag, go karts and themed rides. Now, parents can add value to a cashless card simply by scanning it with a smartphone. The tools are here for savvy operators.

Use incremental pricing to earn more on your attractions. With a cashless system, you can add a level of sophistication to game pricing that accounts for increases in the prices of redemption prizes and your facility overhead. Instead of 25¢ increments, you can achieve more earnings by using smaller increases that trigger less price sensitivity with customers. Your customers may bristle at 50¢, but not blink at 30¢.

The list goes on, because the technology is available to accommodate your imagination and the whims of your customers.

David Goldman DAVID GOLDMAN is founder and president of Ideal Software Systems (Meridian, MO), which develops management software for amusements --