Vol. VIII, No 2, March/April 2008
In this issue
- Editor's corner
- The shifting nature of leisure time and expenditures – Part 2, looking into the crystal ball
- Number of babies continues to increase
- Foundations Entertainment University, May 6-8, 2008, Kansas City, Missouri
- Eat, drink and be famous
- The growth of indoor hotel waterparks
- Learned on women
- Indoor Legoland headed to America
- Center gets brand name and mascot
- Project construction progress
- The Whopper Bar is coming
- Add more 'TLC' and charge more
- Accessible sidewalks
- New clients
[ Index of Previous eNewsletters ]
Editor's corner
Well, here we are already. It's spring in the northern hemisphere and fall in the southern hemisphere. Here in the United States, you would think that the world was coming to an end with all the bad news stories in the media about housing foreclosures, the meltdown of the financial markets, rising food and oil prices and the general fear we are in a recession. It's amazing how knee-jerk reactionary the world has become. Perception of the future now shapes our present behavior. If we do end up in a recession, it will really be a self-fulfilling prophecy. However, just as recessions in the past, we will work our way through it, and things will be rosy again.
We have a lot of interesting articles for you in this issue. One, by our guest writer, Frank Price, deals with recession strategies for facilities offering birthday parties. Another is Part 2 of our analysis of the changes that are occurring in how consumers spend their leisure time and money at away-from-home entertainment venues and restaurants. That article takes a look at what we see as some fundamental structural changes occurring that will significantly impact away-from-home entertainment and restaurant spending for the long term.
As always, our coverage of the away-from-home leisure industry is not influenced by the need to keep advertisers happy. We don't accept advertising. We are free to tell it the way we see it, and that's exactly what we do. You won't find this type coverage in any other industry publication, nor will you find any coverage of many of the topics we choose.
We hope you enjoy this issue. Let me know if you have any comments.
Randy White
Editior
The shifting nature of leisure time and expenditures – Part 2,
looking into the crystal ball
In Part 1 of this article in our January-February 2008 issue, we analyzed changes in consumers' expenditures since 2000 for away-from-home-entertainment and food-away-from-home and observed changes in the amount of leisure time available. If you didn't have a chance to read that article, we recommend you do so as background for this continuation (click for Part 1).
The opening article focused on the recent past. This second part will look at some very recent developments impacting away-from-home-leisure and restaurant spending and attempt to look into the crystal ball at nascent trends that will impact the future.
Some major economic structural changes have taken place in the past few years that are likely to continue and significantly impact consumers' away-from-home leisure time and spending. These changes are far more fundamental than some short-term contributors to the current economic slowdown, near recession, or whatever you want to label it. Many of these economic structural changes are global; some are domestic. Let's take a look.
One of the most significant changes is an increase in global demand for all types of commodities due to the growing economies and growing middle class in China, India, Russia, Latin American and many other developing areas of the world. The first step to a better standard of living is a better diet. This phenomenon was first identified by the 19th century German economist, Ernst Engel, and is called Engel's law — as incomes increase, people spend a smaller percentage of their increased incomes on food, but they switch from cheaper to more expensive food, such as meat and milk. This emerging middle class seeks more protein and more calories; a phenomenon called "diet globalization" and is playing out around the world. Demand is growing for pork in Russia, beef in Indonesia and dairy products in Mexico. Rice is giving way to noodles, home-cooked food to fast food. Rising incomes in Nigeria are contributing to a growing appetite for wheat. This drives up the demand for grain to feed cattle and other livestock.
Meanwhile, in the quest to become less dependent on imported oil, the U.S. and many other countries are encouraging the use of biofuels. These include grain-derived ethanol and biodiesel, which has increased the demand for corn, pushing up its price. Corn is a major feedstock for animals, so that in turn pushes up the price of meat, milk, eggs, cheese and other foods, as corn and high-fructose corn syrup are a significant ingredient in many foods. When farmers increase corn production, they decrease the acreage for other crops, including wheat. And, of course, higher oil prices don't help, as that drives up the cost of operating farm tractors and other farm equipment used in food production, as well as the cost of transporting food commodities and finished food products.
Over the past two years, the price of corn and soybeans has more than doubled. In seven of the past eight years, worldwide demand for wheat has outpaced production. The price of wheat has more than tripled during the past year. The price of just about all food commodities is rising faster than inflation, including eggs, milk, meat, poultry, cheese, barley, rice, peas, sunflower, coffee and lentils. In the U.S., the price of all farm product commodities increased 18% between February 2007 and February 2008.
The increasing cost of food commodities is starting to show up in grocery store and restaurant prices.
Historically, U.S. households have spent a lower percentage of their income for food than almost anywhere else in the world. In 2006, Americans spent on average 9.9% of their disposable income on food (both at home and away from home). This has been fairly consistent since 2000, when the percentage dropped to single digits for the first time in recorded U.S. history.
In 1986, American consumers spent 11.6% of their disposable income on food. In 1976, that figure was 13.6%. Going back further, Americans spent about 21%-22% percent of their income on food about the time today's Baby Boomers were born. In 1933, the figure was more than 25%.
In other parts of the world, households spend a much higher percentage of their income on food. In Japan and Germany it's 17%. Mexicans pay 25% of their income for food, and in India, it's 50%.
The world's expanding middle class can also afford to buy automobiles. Automobiles use gasoline, driving up the demand for oil. Moving to an air-conditioned apartment (or installing it in a home) and buying more electric appliances means using more electricity, again driving up the demand for fossil fuels to run the electric generators. Rapidly growing global demand for fossil fuels is driving up the cost of oil and gasoline. We recently saw oil hit $110 a barrel, and gasoline appears headed to $3.50 per gallon or higher.
The costs for food, energy (natural gas, electricity, fuel oil and gasoline), and other expenditures such as healthcare (see Part 1 of this article) are now rising faster than incomes and consuming a larger percentage of household incomes. This trend of prosperity driven demand is unlikely to subside, at least not in the foreseeable future. The United Nations' Food and Agriculture Organization projects at least 10 years of more expensive food. When the cost increases do slow down, these costs will still represent a much higher percentage of household incomes than they have in the past. What this means is that for some households, expenditures in other categories will need to be decreased.
Households in the lower income categories will be hardest hit. For them, expenditures for food, energy and healthcare consume a larger percent of their income than is the case in higher income households. They will have no choice but to try to cut expenditures, especially anything considered discretionary.
Let's look at the 2nd quintile of households by income. Those households would be classified as lower middle class, earning between $18,700 and $35,100 in 2006. The combined cost of food, energy and healthcare consumed 38% of their expenditures. If the cost of the three items goes up just 5% more than their incomes, that means that unless they do without or somehow lower what they spend on these items, they will have to reduce spending in other categories by 1.9% of their expenditures (38% x 5% = 1.9%). That is almost 2.5 times what they spent on away-from-home-entertainment in 2006. That category, as a discretionary one, is sure to be severely cut in such a scenario.
Now, let's look at the 4th highest quintile of household incomes, those households that earned between $56,200 and $88,800 in 2006, which would be classified as upper-middle income. Energy, food and healthcare consume only 22% of their expenditures, so a 5% increase in the cost of the three means they have to find savings equal to only 1.1% of their overall expenditures. This is equal to what they spent on away-from-home entertainment. So although there is a chance they will cut some of their away-from-home entertainment spending along with other discretionary expenditure categories, the reduction is likely to be much less. There is another factor that comes into play here. The 2nd quintile of households by income actually spent on average $3,900 more than their after-tax income. But for the 4th quintile, their after-tax income exceeded their expenditures by $12,800. So the 4th quintile has a cushion to absorb increasing prices and may choose not to reduce spending in discretionary categories.
The highest quintile of households by income, those households with 2006 incomes exceeding $88,700, have far less of a problem absorbing price increases in energy, food and healthcare. If fact, they have no problem. On average, their after tax income exceeds their expenditures by over $47,000, so price increases in those categories will probably have no impact on their away-from-home entertainment spending, which in 2006 was 1.7% of their overall expenditures.
This disproportional negative impact of rising prices is sometimes referred to as the "middle-class squeeze." Poor and middle-class households suffer the most from inflation of the core items of energy, food and healthcare that they have little choice but to consume.
This middle-class squeeze is already occurring. Since 2006, prices for groceries, gasoline, health care and other basics that a middle-income American family consumes have risen 9.2% while average earnings have increased only about 5%. The price increases have already cost households, which made a median income of $48,700 in 2006, an extra $950 per year in expenditures, assuming they did not adjust the quantity of those items they bought.
Lower income households will have to pay for the increasing cost of energy, food and healthcare by cutting their discretionary spending for things like away-from-home entertainment. They will probably just stay home, watch TV or cruise the Internet, or will cut down on restaurant visits by eating more meals at home.
The same is not true for higher income households. As we explored in Part 1 of this article, there is a leisure time dichotomy between less educated, lower income households and more educated, higher income households. The lower income households have the most leisure time, so they can use their time to adjust their food spending by going to the grocery store more often and preparing meals at home. However, households with higher levels of education and income have far less leisure time. In fact, the amount of their leisure time is continuing to decrease, so time becomes far more important to them than dollars. Time is their new discretionary currency. They are willing to continue to pay the premium cost for restaurant meals because it saves time.
So, looking into the crystal ball to foretell the future, we believe the increased costs for energy and food are here to stay and will probably continue to increase faster than incomes, due to increasing global demand. And when it comes to health care, there is no reason to believe, despite what U.S. presidential candidates promise, those price increases will come under control, either.
We believe there will be a dual impact from the fundamental structural changes to household incomes made by these three increasing expenditure categories. Those households with less than college degrees and with lower incomes that represent about 70% of all households will be forced to cut their discretionary spending for entertainment. Also, a larger share of what they do spend on entertainment will shift from away-from-home entertainment to electronics, where they get a longer-term return on their investment. Thus, their spending on away-from-home entertainment will see major reductions. They likewise will be forced to save on food expenditures by shifting a greater percentage of their overall food expenditures to meals-at-home, reducing both their number of trips and amount of spending at restaurants.
The longer-term trend is much different for the approximately 30% of households with higher incomes and bachelor and higher college degrees. Their discretionary expenditures will not be constrained by increasing energy, food and healthcare costs. Rather, their discretionary time will become an increasing driver in their decision-making. The high value they place on their time means they're willing to trade money for it. They will increase their away-from-home food expenditures, as it saves them time, and they will become more discriminating in how and where they spend their leisure time. They will be willing to spend a higher price for a higher quality away-from-home entertainment experience. Saving money is not the issue with them. The issue is to make sure they get the most bang for their minutes. If you examine the data in Part 1 of this article, we believe you will see that these structural changes actually started about five years ago or so.
This trend towards higher quality, yet more expensive, away-from-home experiences will also affect those households in some of the lower income brackets. Although time will have far less, if any, weight in their decisions, their shrinking dollars available for away-from-home entertainment may very well drive them to seek out the best bang for their buck when they do decide to spend it. Their value equation will demand higher quality, since their expendable dollars will be less.
No different than the trend in which consumers are trading up to affordable luxury for some of their retail and food expenditures, we believe we will see an increasing trend to trade up to higher quality experiences in away-from-home entertainment. But in affordable luxury in retail, consumers trade down to some lower priced products to save money so they can trade up to the higher quality products. The away-from-home spending category will see a different scenario: less affluent households won't trade down to less expensive away-from-home entertainment. Instead, they'll save money by purchasing at-home electronic entertainment. (For more about affordable luxury and trading up, see our article, Affordable luxury, the new consumer paradigm.)
In summary, our predictions are:
Middle and lower income, non-college graduate households will:
- Decrease their frequency of restaurant visits and their overall food-away-from-home expenditures
- Decrease their away-from-home entertainment visits and spending
Higher income, college graduate households will:
- Increase the frequency of their restaurant visits and their overall expenditures
- Decrease their away-from-home entertainment visits, but spend more on each visit, probably increasing their overall expenditures
Households of all incomes (except the poorest) will:
- Trade up to higher quality and more expensive entertainment options when they do leave home
So our bottom line prediction is:
- Upper-middle and higher income, college graduate households will account for an increasing share of all away-from-home entertainment and restaurant spending
- To succeed in the future, away-from-home entertainment venues will have to offer high quality offerings, even if they need to command a higher price
Don't buy into what we are predicting? Here's just one example of how the trend is already in action in the away-from-home entertainment marketplace. In late 2007, the movie Beowulf was simultaneously shown in three versions in movie theaters: giant screen Imax 3-D, 3-D on regular theatre screens and without 3-D at cinemas. Here are the grosses per screen for its first week of distribution:
- 3-D Imax, $43,000
- 3-D in regular theaters, $13,000
- Non 3-D in regular theaters, $7,000
In regular theaters, the 3-D version cost at least $2 more than the non 3-D version. The Imax 3-D showings were priced $3 to $5 more than the others. Consumers were clearly willing to pay a premium to have a premium experience.
Number of babies continues to increase
The number of births in the United States has been steadily increasing since 1997. In 2006 there were 4,265,996 babies born in the United States, 10% more than in 1997 -- just short of the record high of 4.3 million babies in 1957 at the peak of the Baby Boom years. Interim data through June 2007 shows a continuing increase. The 1957 record may have been broken in 2007.
Foundations Entertainment University, May 6-8, 2008, Kansas City, Missouri
It's a little hard to believe that Foundations Entertainment University is now in its fifth year of helping entrepreneurs and existing location-based entertainment (LBE) businesses become successful with their projects and expansions.
Attendees at the last Foundations Entertainment University held in Dallas, Texas, February 2008
"Foundations Entertainment University, the school for would-be amusement facility operators, defies the old adage about those who can do and those who teach. The sharp and experienced consultant instructors who run Foundations do both, teach and work in the real world, and do them well."
Replay Magazine
click here to read the total review
The next Foundations will be held May 6-8 in Kansas City, Missouri. In addition to three days of instruction on all aspects of developing and operating centers by five of the industry's top consultants and designers, this Foundations will feature a behind-the-scenes tour of a children's edutainment center, an indoor-outdoor family entertainment center and a bowling lounge. We will be visiting Paradise Park, winner of the 2004 Golden Token Award as the best new family entertainment center, and the new Lucky Strike Lanes in the just opened Power & Light District in downtown Kansas City.
Attend Foundations Entertainment University to become part of our "Road Kill Prevention Program." Register today.
Eat, drink and be famous
We continue to see the growth of eatertainment venues, including new concepts. The latest we ran across is New York City's Spotlight Live, where the world's unprecedented obsession with getting a shot at stardom gives new meaning to Andy Warhol's iconic adage, "In the future, everyone will be famous for 15 minutes." The future comes to life with a 21st century twist on the traditional dinner theater with an eatertainment experience and a chance for American Idol wannabes and karaoke fans to perform on Broadway and be discovered. On any given day, chart-topping artists, as well as people from big cities, small towns and places in between, perform at Spotlight Live. As they perform, the audience votes on their favorites and dines on a dazzling menu of signatures dishes. This includes a whimsical take of first-rate American comfort fare created by celebrity chef Kerry Simon, which is as much a part of the entertainment as the performances on stage.
  
For customers who choose to perform, after selecting a song, they and their mates are escorted to a VIP area to sign a "record contract." Next, they're whisked upstairs to a posh green room, where they can relax in plush white leather couches with a stiff drink to calm the nerves. Finally, they're delivered to the mega-stage, where professional backup singers help accentuate (or even drown out) their tunes, which get streamed live to the web and showcased on a 25-by-40-foot Jumbotron in Times Square. Performers can also take home a CD or DVD of their performance.
At their tables, facing the main stage, customers can use an interactive touch screen to search through their song library or to IM another table.
Spotlight Live is 23,000 square feet and has four bars and five recording booths in addition to its stage. Founder Jennifer Worthington, who also developed Coyote Ugly Bar and Dance Saloon in Las Vegas, says, "Our goal is to give people the opportunity to experience stardom."
To see a video of the Spotlight Live experience, click here.
The growth of indoor hotel waterparks
The Wisconsin Dells once was the epicenter of the indoor waterpark resort industry. In fact, for sometime, it was the only place you would find indoor waterpark resorts in the United States. Now indoor waterparks have spread to the hotel industry and are appearing not just at tourist locations, but also in the back yards of many Americans. We now even have a publicly traded company, Great Wolf Lodge, that is marching across the United States and Canada developing indoor waterpark hotels, with 10 now opening and more under development.
Not only is the number of indoor hotel waterparks increasing in America with 224 expected to be open by the end of 2008, but the size of the waterparks is also increasing, setting records. Kalahari Resorts in Sandusky, Ohio, just won bragging rights for the largest indoor waterpark at a whopping 173,000 square feet. That's four acres or 1.6 hectares under roof.
Learned on women
We thought a recent Learned on Women blog made a significant point about how women are often treated by businesses, so we're reprinting part of it below.
"A recent Consumerist post included a letter from a woman had written to Apple regarding a recent, not good, experience she'd had in one of their stores. Here's just a tidbit from it ("Bill" is the name of the Apple store "genius" she spoke with):
"Well, first of all, Bill DID NOT LOOK AT ME. He did not greet me. He greeted my husband, introduced himself, and shook his hand ... and completely ignored me. He didn't ask my name, what we were there to buy, or who the new computer was for. He did not make eye contact. He simply behaved as though I were not there, and steered my husband through the crowded store -- ignoring me and leaving me behind.
"For all the guys reading this (and it is worth reading that whole letter on the Consumerist blog for the full effect), how would you feel if your wife, or, say, newly career-aged daughter was in the letter-writer's shoes? Peeved, I'm sure. Does this motivate you to learn more about marketing to women for your own brand? Would this example be helpful for training the men on your team?
 "There are plenty more stories where that came from, and I am 99.9% sure you can't say: "But that would NEVER happen in my store/industry/situation." This state of prolific bad examples is NOT because the men in your organization are intentional with their bad service or misunderstanding of how women buy. Rather, it simply reflects that those men probably aren't comfortable or experienced enough with it. Pointing to cross-industry bad examples, and relating them to someone's own mom, sister or daughter, can be an incredible training tool."
With women heading some 40% of households in America, making 85% of consumer buying decisions and running 40% of all companies in the U.S., Andrea Learned's book, Don't Think Pink, What Really Makes Women Buy, is an important read for anyone interested in learning how to appeal to this huge audience. Andrea Learned and coauthor Lisa Johnson, cofounders of the consulting firm ReachWomen, believe that too many companies either don't cater to women or repeatedly send misleading messages. The book is a solid guide for anyone who wants to reach the women's market.
Indoor Legoland headed to America
 In our December 2006 issue, we broke the news about Merlin Entertainments Group's launch of a new Legoland Discovery Centre venue in Berlin, Germany. That prototype that opened in Berlin last year now attracts more than 500,000 visitors annually.
Now Legoland Discovery Centre is coming to the United States. The giant indoor Lego world, designed for families with children aged 2 to 12, will open its first location in the U.S. in August 2008 in the 630,000-square-foot The Streets of Woodfield shopping center in Schaumburg, Illinois. The venue will occupy a 2-story, 30,000-square-foot store and feature activities ranging from hands-on Lego play to life-sized Lego adventures centered around the iconic interlocking colored bricks.
Legoland Discovery Centre in Berlin, Germany
 The facility will combine Lego model building and unusual construction challenges with theme park-like attractions such as a dragon ride, adventure trail and 4D cinema incorporating fantastical Lego creatures and Lego-based special effects. Other highlights will include a Duplo play area for younger children, birthday party rooms, a Lego cafe, a Lego store and a special room with rotating exhibitions by master Lego builders.
A second 44,000-square-foot Legoland Discovery Centre will open at the Meadowlands Xanadu retail and entertainment complex in New Jersey just outside New York City.
Xanadu's 2.3-million-square-feet complex will include entertainment, interactive attractions, sports and retail. The $2-billion center will feature five themed districts: Sports, Entertainment, Youth Culture, Food & Home and Fashion. It will be home to North America's largest climate controlled Ferris wheel, The Pepsi Globe, offering breathtaking views of the Manhattan skyline and northern New Jersey. In addition to retail stores and restaurants, Xanadu will include America's first indoor snow dome, a skydiving tower, multiple movie theaters, and a concert and live theater venue. Xanadu is scheduled to open in late 2008, but no opening date has yet been announced for its Legoland Discovery Centre.
 We have learned through our sources that Merlin Entertainment will be pairing up Legoland Discovery Centre with its Sea Life aquarium concept at some future locations in the United States. Sea Life aquariums are smaller and cost less than the typical publicly funded aquariums. Merlin currently operates 23 Sea Life aquariums throughout Europe.
All Legoland Discovery Centre and Sea Life locations are run by Merlin Entertainments Group, the world's second biggest visitor attractions operator after Disney, with 51 attractions and four hotels in 12 countries.
Center gets brand name and mascot
Our work on the production of location-based entertainment projects includes more than just site, architectural and interior design; furniture, fixture and equipment design and procurement; menu development; and management consulting. It also includes full brand development. That involves not only developing a unique trade name, but also a logo, mascot character and a unifying and comprehensive brand identity for all aspects of a project.
Finding a unique trade name that fits a project's identity often proves to be the most difficult challenge. Projects are often under construction before the trade name is finalized (contrary to the myth that all projects must start with a name). A good example is the 23,000-square-foot Lake County (Indiana) Park Department's children's play and discovery center in Lake Station/Gary, Indiana. Construction was started last year. It was only earlier this year that we finalized the project's name, logo and mascot character. BellaBoo is the name for the mascot, an endangered Indiana bat. The center, BellaBoo's, is named after the mascot. Say hi to BellaBoo.
 
Project construction progress
Several of our clients' projects are currently under construction. Here are several progress photos.
 |
 |
| Silverlake, The Family Place plans to open its new $4 million waterpark in June 2008. The waterpark site is in the foreground in front of the existing 70,000-square-foot Silverlake building. |
Wisconsin's record-breaking snows have continued to delay groundbreaking for the new 54,000 square foot StoneFire Pizza Co. in Kenosha. |
 |
 |
| BelllaBoo's, the 23,000-square-foot children's play and discovery center at Three Rivers Park in Lake Station/Gary, Indiana, is nearing completion. |
The Whopper Bar is coming
We normally don't give coverage to new restaurant-only concepts, but we believe Burger King's new Whopper Bar epitomizes several significant restaurant trends that also apply to eatertainment and location-based entertainment centers.
First, some information about the Whopper Bar planned for airports, mall food court and even casinos.
Burger King plans to unveil a mock-up of the Whopper Bar for franchisees at the company's annual convention in May in Orlando, Florida. Plans call for opening a "handful" of test sites before the end of the year.
"The concept is not meant to replace the free-standing restaurant, but to go into areas where you couldn't fit a full restaurant," said Keva Silversmith, Burger King spokesman. "The idea is to take advantage of the Whopper's trademark cachet."
The Whopper Bar will offer as many as 10 different types of Whoppers, many not typically available at all times in the chain's traditional restaurants. Examples include the Rodeo Whopper, featuring fried onion rings and barbecue sauce; the Texas Double Whopper, with bacon and jalapeños; and the Angry Whopper, topped with spicy onions.
Each Whopper Bar will be about 490 square feet with a hip, contemporary look. The preliminary design features open-style kitchens, chrome, exposed brick and plasma televisions that play looped videos of open flames of fire to evoke Burger King's flame-broiled motto. Customers also will be able to watch their burger being prepared in front of them "to put a little more theater into it," said Russ Klein, the company's president for global marketing, strategy and innovation.
The Whopper Bar will also feature a build-your-own option for customers to customize their burger. "The concept is like ‘Pimp My Ride,' " Klein said, referring to the MTV program about customized cars. "To take up your Whopper, make it your own, put you in charge."
The Whopper Bar exemplifies two major trends we are seeing spread throughout the food service industry: open kitchens and the ability to customize your food. Open or display kitchens have been gaining popularity for two main reasons. First, dining away from home needs to be all about the experience, one you can't have at home. Open or display kitchens provide entertainment and theater for the dining out experience. Second, customers like the assurance of knowing where their food is coming from and that it is being properly prepared in a safe manner. As one mother said at a focus group, "With an open kitchen, I know if they drop the hamburger on the floor, they won't serve it to me or my children."
The other trend is customization, also called mass customization, as first identified by Joe Pine in his 1992 book, Mass Customization: The New Frontier in Business Competition. Burger King, with its "Have it your way" marketing, and Starbucks, with its 30,000 ways to have your coffee customized, are probably as responsible as any companies for training restaurant customers to want to have their food offerings prepared to their preferences.
We are noticing a lot of new food concepts in their early stages of prototyping in airports where numerous restaurants are competing for hungry travelers. We recently spotted this Cereality Express at an airport.
Add more 'TLC' and charge more
by Frank Price © 2008 F.L. Price and Associates
Many owners feel they need to meet or beat the competitor's price to make it through tight times. Unfortunately, when this strategy is followed, you're setting the business up to fail. It's only a matter of time before you can no longer afford to maintain the level of quality delivery, when the price does not match the cost to deliver. When times get tough, use a contrarian approach. Add more value, become even more unique -- and charge more. This difference will set you apart, keep the word of mouth buzz alive, and allow you to grow, while others compete on price. Adding intangible value costs little to nothing, but yields the largest returns. Emotional value is HUGE. It's the simple things that are the big things, when it comes to building human relationships.
Building Relationships
Add intangible value to your parties by understanding the Relationship Bank Account Concept by Stephen Covey, The Seven Habits of Highly Effective People. The relationship bank account is similar to a checking account. You can make deposits to improve a relationship or withdrawals that will weaken it. Similar to your bank account, a strong and healthy financial situation is the result of steady deposits over a long period of time. Relationship bank accounts start whenever you cross someone's path. If you smile, you've made a deposit; if you ignore the person, you have made a withdrawal.
Once an account is opened with another person, you can never close it. It will remain wherever you left off, even after a long period of time.
Deposits tend to evaporate and withdrawals tend to remain in stone. You need to continually make deposits, especially into your most important accounts, to keep them positive.
Strong relationships are built one deposit at a time. It takes 4 deposits to equal 1 withdrawal.
Continually think, plan and act to give deposits that will build your relationship with guests, team members and supervisors. Inevitably you'll offset some of those deposits. Either by taking a withdrawal or having them fade with time. Nobody is perfect. If your account is strong, it won't be a big deal. If your account is "even" or barely to the positive, you will become overdrawn, affecting your relationship and the end results you're trying to create.
The most effective deposits that work every time are listed below. Withdrawals are listed, as well.
Relationship Bank Account Deposits
- Keep promises.
- Do small acts of kindness.
- Be loyal.
- Listen.
- Say you're sorry.
- Set clear expectations.
Relationship Bank Account Withdrawals
- Break promises.
- Keep to yourself.
- Gossip and break confidences.
- Don't listen.
- Be arrogant.
- Set false expectations.
Keeping Promises
Keeping promises, big or small, is crucial to building trust. Delivering what you promise, doing what you say you're going to do, is essential. If for some unavoidable reason, you find you cannot keep a promise, then tell the other person why.
Birthday Party Examples:
When party Mom/Dad books a party, they develop a set of expectations based on what they have been told by your event planner. When Party Mom/Dad shows up for their party and something they expect is missing or different, a withdrawal has been created. The perception is you don't care enough to get it right.
Telling party parents that their Host/Coach/Party Pro will call to ask questions about personal likes and dislikes before the party is a deposit. Not getting in touch is a withdrawal.
Frank Price is the founder of Birthday University, a must for anyone planning to run or currently operating birthday parties. You can reach Frank at <fprice@birthdayuniversity.com> or +(919) 387-1966.
Accessible sidewalks
 Sidewalks, parking lot and street crossings present unique challenges to accessibility. TheUnited States Access Board has posted a four-part series of videos on Accessible Sidewalks on its website to illustrate access issues and considerations in the design of sidewalks. The series covers access for pedestrians with mobility impairments, including those who use wheelchairs, and pedestrians who are blind or have low vision. Click here to access the videos.
New clients
Kazakhstan
Working on feasibility and concept development for family entertainment centers to be located in three different cities in this former Soviet country. Watch for coverage of Randy's trip to the Republic of Kazakhstan in our next eNewsletter.
Greater Chicago, Illinois area
Assisting a client with feasibility and site selection for a 10,000 square foot play café and children's enrichment center.
Central New Jersey
Designing preliminary plans and preparing financial feasibility for a 25,000 square foot children's play, discovery and enrichment (edutainment) center to be located in an existing building.
Greater Charlotte, North Carolina area
Working on renovation of an existing bowling center to become a bowling-based family entertainment center.
|
White Hutchinson Leisure & Learning Group
Send to a Friend
Printer-friendly
RSS Feed
