In this chapter, we will go over the three measurable variables of operational efficiency, outline the differences between new and incremental revenue, compare top-down and bottom-up approaches to customer data analysis, and demonstrate how to properly quantify these figures to keep an operation in its best shape
What to measure?
There are three key variables to bear in mind when measuring the full scope of an operation’s efficiency — time savings, cost savings, and revenue which is further broken down into two sub-categories: new and incremental revenue.
1) Time Saved
The saying “time is money” is tried and true, though thinking about the amount of time saved is more abstract than strictly analyzing the material ways of saving money.
Two ways operators can maximize time saved are through automation and employee training. Automation not only saves time, but also increases employee productivity.
Operators should consider automating employee tasks not only in terms of time savings, but in the ability to redirect their skillset to value-building activities; creating and managing new content and offers, process improvements, and turning data into actionable insights to make the team operate efficiently.
According to RocketRez’s ‘The Guest Experience Revenue Effect’ report, tours and attractions that partner with RocketRez save an average of 35 hours per week by automating routine operational tasks like pricing, data entry, and some customer service activities.
Similarly, one of the biggest hindrances to employee training for seasonal and part-time workers is the system's ease of use. Employee training time on a legacy ticketing platform equates to 142 paid hours, compared to RocketRez employee training time measuring an average of 62 paid hours.
The more operators can streamline their experience (for both their staff and customers) the more banked hours and money from the payroll are saved, and the more time a customer will have to spend money at other facilities on-site that generate incremental revenue.
2) Cost Savings
Thinking about this is a bit more black-and-white. We could mince numbers about who provides the cheapest wholesale cola for the snack bar or the best bulk hand soap for the restrooms, but neither of those necessarily help your operation run smoothly.
The average RocketRez customer uses four different Software as a Service (SaaS) point solutions, according to ‘The Guest Experience Revenue Effect’, sometimes in combination with a legacy on-premises ticketing/access control software.
Consolidating all software under the all-in-one RocketRez platform provides operators the ability to add modules as their business needs dictate, and save costs by shifting to a monthly subscription and a usage-based pricing model.
The time saved from being able to report seamlessly across the entire business is a core differentiator of the RocketRez platform. Customers can scale operations without increasing headcount. Scaling operations into new products and the latest exhibits at a tour or attraction generally comes with demands for new employees to support growth.
The power of automation on the RocketRez platform has allowed operators to do more with less.
Improvements to operations such as timed-ticketing, faster admissions and payments, pre-booking and pre-purchasing add-ons like parking, feed for zoo animals, or even gift shop items require less staff to manage.
Certain companies have an opportunity to use self-serve kiosks, running on the same user interface as the RocketRez point-of-sale, to reduce the need for several full-time employees in the ticket booth.
Automated chatbot technology reduces customer service time spent by 75%, fundamentally changing the structure of customer service on-site for many tours and attractions.
Revenue is the total amount of money coming into an operation, often from multiple streams. It can be broken down and measured in two different ways: new revenue and incremental revenue.
New vs. Incremental Revenue
What is new revenue?
New revenue is the initial purchase. An example of new revenue is a customer browsing online for fun activities to do on vacation, finding an excursion they are interested in, purchasing tickets and attending a facility for the first time. Other examples include donations, events, memberships and subscription models.
What is incremental revenue?
Incremental revenue is money spent on top of the customer’s initial purchase. Examples of this include upselling and cross-selling, dynamic pricing (algorithmic pricing based on traffic and demand) and various peripheral goods like gift shop merchandise, food & beverage, higher-level tour packages like VIP access and skipping the line.
When the attractions provide an attendee with a remarkable customer experience (see RocketRez Customer Flywheel) during their new revenue period, their incremental revenue lives on in second, third and future visits. They continue to try new upsold activities and purchase snacks/merchandise they may have missed during their initial visit.
Quantifying the Data
To predict, measure and report this data, operators must put themselves in the position of the customer and their hard-earned dollar.
What do their patrons spend their money on most? When are they spending it? Why are they spending it?
A platform like RocketRez — where all the operational systems from ticketing to food and beverage, retail, and communications with visitors are housed in a single system — provides operators with a centralized data hub that makes the answers to these questions much clearer.
With an overview of an operation’s revenue sources, operators can answer the tough questions about what facets of their attraction are making and draining money, what aspects of their operation can be improved, and which money-making aspects of their operation are crucial to be running seamlessly to ensure profitability.
Re-Thinking Customer Data Analysis
There are two ways to look at and re-evaluate the data of an operation: top-down and bottom-up.
Top-down is a term for the total amount of revenue received by an attraction in a period, divided by the number of visitors to that attraction in that same period. For example, if an attraction made $45,000 in a single day of operations, and 1,500 people visited on the same day, the average top-down revenue would be $30 per person. This is often referred to as per-caps — the revenue generated per capita (per person).
Top-down revenue helps an operator realistically quantify how much money they will earn in a day, month or year based solely on the number of people that pass through a ticket turnstile in a single day, whether they end up spending $9 or $900.
Conversely, bottom-up analytics are more detailed and focus on the individual customer’s buying habits, measuring each purchase as a unit of data contributing to their full guest experience (advertising, ticketing costs, wholesale food costs, parking expenses, etc.).
This allows you to measure the total revenue from a single customer in a way that gives you much more information. For example, a visitor spent $70 in an entire day at an attraction; $35 on an upsold entrance ticket, $15 on food & beverage using a coupon they got for referring a friend, $15 on a gift shop souvenir and $15 on parking.
There is money being made at each step, and RocketRez data shows you where the money was made, and where it could be made in future visits.
Legacy res-tech providers offer top-down measurements, while RocketRez looks at data from the bottom up. That is because it’s the clearest way to view your useful and actionable data.
The data is more detailed, analyzing single and family-sized parties, age, gender, the timeframe of visit, etc.
It’s comprehensive data, tracking a guest from the preliminary stages of internet browsing, to on-site behavior, all the way to their post-visit review and re-engagement. This information offers far more perspective than top-down data because operators know where their opportunities lie.
They know what offers to send to their customers, and how they are likely to respond.
Being able to report on and understand your data is no easy task, but gaining insight into visitor activity and behavior will aid in seeing growth year-over-year. Consider the story your current tech stack tells you about your data, and more importantly, what it does not tell you.
- There are three key variables to bear in mind when measuring the full scope of an operation’s efficiency — time savings, cost savings, and revenue.
- New revenue is the initial purchase; Incremental revenue is money spent on top of the customer’s initial purchase.
- With an overview of an operation’s revenue sources, operators can answer the tough questions about what facets of their attraction are making and draining money, and what aspects of their operation can be improved.
- There are two ways to look at and re-evaluate the data of an operation: top-down and bottom-up. Top-down analytics is the total amount of revenue received by an attraction in a period, divided by the number of visitors to that attraction in that same period; bottom-up analytics focuses on the individual customer’s buying habits, measuring each purchase as a unit of data contributing to their full guest experience.
- Bottom-Up analytics are most beneficial to operators, with useful and actionable data.