Vol. III, No. 2, February 2003

The Only 5 Ways to Grow Your Business?

There are only five ways for any location-based leisure facility to grow its business. The five, in increasing degree of effort, are:

Lower the guest defection rate (guest who don't return for various reasons).
Get existing guests to spend more on each visit (higher per capita spending).
Get existing guests to visit the location more frequently (higher repeat business).
Attract new guests from within the existing market area.
Expand the geographic reach of the market area (almost impossible).

The first three, which focus on existing guests and their experiences when they visit a facility, are the easiest to accomplish, both from the standpoint of expense and effort. The last two are focused on attracting new guests and generate a much lower return on investment.

Unfortunately, many businesses mistakenly focus on the last two, assuming they are the best way to grow, while in the process, they fail to concentrate on the first three where there is the highest probability of success. Those businesses are constantly chasing after new customers, while existing customers are leaving them. In many leisure businesses, between 25% and 50% of customers defect (never come back) each year. The business is like a revolving door. The truth is that focusing on the first three, and especially the first - pleasing existing guests so they don't defect - will usually take care of attracting new customers through positive word-of-mouth marketing. Focusing and investing on current guests rather than the ones you don't have realizes the greatest return.

Sure, we all know as simple as this may sound, its much more complicated. However, keeping the big picture in mind to stay focused will help businesses become and stay successful.

Vol. III, No. 2, February 2003

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Vol. III, No. 2, February 2003

The Only 5 Ways to Grow Your Business?

Vol. III, No. 2, February 2003

LOCATION-BASED LEISURE & ENTERTAINMENT