Tracking Numbers: Measuring Performance for Attractions
How do you track your performance? In working with our clients, we carefully review their metrics, and set goals for performance enhancement. Below are just some examples of the performance metrics that we routinely use:
Annual Attendance: Simple enough, how many people visit each year.
Seasonality: The distribution of visitors throughout the year.
Competitive Set: The attractions that you would compare yourself to, using various performance metrics.
Average Ticket Price: The average of all tickets sold, including discounts, tiered pricing, etc.
Length of Stay: Of crucial importance, how long they stay is usually directly related to how much they spend.
Guest Satisfaction Rating: A measurement of reported satisfaction by individual guests.
Per Capita Spending: How much each visitor spends on food, merchandise, premiums, and other offerings.
Sales/Square Foot: The productivity of your facilities.
Average Transaction: The amount of each sale.
Average Cover: How much each person is spending on food at an individual meal.
Market Awareness: What potential visitors know about you.
Market Share: How many of your potential visitors actually come to your attraction.
Instantaneous Capacity: The number of visitors your facility needs to support at any particular time.
Penetration: How many times visitors pass through revenue-generating areas during their stay.
Arrival Curve: The measurement of how many visitors arrive at various times of date.
Design Day: The number of people that your facilities are designed to accommodate in an individual day.
Turnover Rate: The number of times an attraction can turn its entire capacity over in a given day.
Transaction Time: How much time each sale takes.
Dwell Time: How long a guest stays in an individual experience.
Attraction Inventory: How many tickets you can sell for an attraction.
Conversion Rate: How many tickets you actually sell, compared to attraction inventory.
From What… To What…
In their book Execution – The Discipline of Getting Things Done, Larry Bossidy and Ram Charan describe a planning session held by the leadership of a Fortune 20 company. In their deliberations, the group discussed the need to change their company’s culture. But what kind of change? Statements like “Make it better” just weren’t clear enough. Finally, in a breakthrough of insight, the CEO focused the discussion of cultural change by challenging the team: “From what, to what?” Focusing on this question enabled the team to become specific, develop measurable goals for change, and strategies to achieve these goals.
We do a great deal of planning for clients with existing destinations. In almost every case, this planning is undertaken to achieve not just one, but many key outcomes that will dramatically influence the future of their enterprise. While we ultimately get into strategies, new products, design concepts, and implementation plans, much effort is often first expended in seeking this kind of specificity and measurable goals.
They want to further their mission? From what, to what? Increase their attendance? From what, to what? Improve their employees’ work environment? From what, to what? Strengthen their brand? From what, to what? Grow their revenues? From what, to what? In planning, we usually seek the How, but first we often need to help our clients determine the What.
Some outcomes are more easily measured than others. But good planning should seek to articulate these goals, and find innovative ways to measure results.
In this issue, we will examine many dimensions of articulating and measuring results. Chris Cavanaugh, President of Magellan Strategy Group gives us a primer on measuring performance at his lemonade stand. Lalia Rach, our Partner Profile, gives us an overview of measuring results in higher education at New York University’s leading program for hospitality, tourism, and sports management. Carol Saunders of the Brookfield Zoo discusses the measurement of visitor attitudes towards conservation at zoos and aquariums. And finally, we will describe our some of the metrics we use in measuring attraction performance.
Measuring Visitor Spending at America’s Most Historic Square Mile
Last year, more than two million people visited the Independence Visitor Center during their trip to the Independence National Historical Park in Philadelphia, home of Independence Hall and the Liberty Bell. Opened in 2001, the Visitor Center inspires visitors to stay longer in the region, participate in more attractions, and plan return visits. In the 2006 fiscal year, the Independence Visitor Center induced $62 million in spending. This resulted in a regional economic impact of $162 Million!
PGAV has recently been retained to develop a new master plan for the Independence Visitor Center.
Lalia Rach, Ed.D.
Divisional Dean, Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management
School of Continuing and Professional Studies
New York University
How did you get into this industry?
We have to go back to my roots. I was born into a family-owned tourism business. My grandmother owned a restaurant in a small resort town, and as a young girl, I gained insights into business survival. During high school and college, I worked in a restaurant and upon graduating, spent ten years in hotel management.
What made you transition to education?
I went for my MBA and developed an interest in the future of the industry and a passion for the next generation of leaders. What drives me is preparing my students to lead the industry.
You talk about taking educated risks.
I’ve certainly taken risks with my career; in fact, coming to NYU was a risk as I was charged with developing a Center from the ground up in July 1995. Today, we have two undergraduate programs, three masters programs, 650 students and 10 full-time faculty. Just like individuals, organizations must be willing to take chances.
You translate theory into reality.
It’s not enough to know the definition; successful professionals understand how to translate data into useful information. While earning my doctorate at George Washington University, I refined my teaching skills and consulted with businesses on aspects of economic development. This kept me intimately connected with industry, which is critical and different from a strict academic approach.
What are your priorities?
Helping my students grow and succeed. We must provide students with subject matter, expertise and professional development opportunities. I invite cutting-edge companies like PGAV to bring life to ideas. We use the world as a learning laboratory and recently took a graduate class to Gettysburg Battlefield to see PGAV’s work. Our students intern all over the world to have global experiences that prepare them for professional life in the 21st century.
How do you measure results?
We know our students are highly successful by their career placements and active roles as alumni. For a company, success is measured by the quantitative bottom line. But if that’s the primary motivation, a business will never realize its full potential. Success is really based upon what you provide, how well you do it and how it resonates with the customer.
Your advice for success?
Love what you do, work hard, always see possibilities, believe in details and generate a certain amount of luck. Measure success in incremental terms; incremental change becomes ingrained in an organization’s culture.
Dr. Rach identifies some industry trends:
If you can’t have it all, have a fraction! Enjoy at least one aspect of life that you can’t afford all the time.
Example: Rent expensive designer handbags rather than buy one bag that you have to use forever.
Redefine the faraway place! It’s a state of mind, not a geographical reference.
Example: Visit a day spa or an in-town hotel to step out of your regular routine.
Experience what few have done! Think differently, look at the World upside down.
Example: Spend the night in a luxury tree house in the jungle.
Outsource the mundane! Get out from under the minutia.
Example: Hire a life coach, personal consultant or personal shopper.
Improving the Odds for Success in a Crowded Marketplace
Chris Cavanaugh
President
Magellan Strategy Group
Like many of us as kids, I prided myself on being a warm weather beverage entrepreneur, a pint-sized Donald Trump bent on dominating the neighborhood lemonade market. Doing business was easy then – raid the pantry for sugar and lemons; find the plastic cups that had been sitting idle since last summer; empty the ice cubes out of their blue freezer trays; get the card table out of the attic; and scratch out some signs in my best magic marker penmanship. At the end of the day I never worried about whether I made a profit, or about compensating Mom for the supplies used in my startup.
Unfortunately, it never works like that in the “grownup” world of really big lemonade stands. There’s usually a less understanding “Mom” from whom we beg startup resources – someone who is going to want profits in return for the use of their lemons, sugar, and card table.
Figuring out how to plead to “Mom” for money, or whether we should ask her for the resources at all, is one of the trickiest steps along the road to creating new memorable visitor experiences. It’s a matter of knowing how to quantify the positive anticipated impact of our new ventures, and understanding the total costs involved.
Let’s use our mythical lemonade stand as an example of how to make a successful entry into the high-flying world of “destination beverage experiences.” Assume for a minute you’ve been asked to create the world’s largest stand at your local theme park. Where would you start?
Know the competition, both direct and indirect. What makes your lemonade truly better than the other guy’s? Looking at the total customer experience, where are you superior? Inferior? Would the consumer perceive enough difference in quality to pay more for your lemonade? How does your lemonade experience compare to other consumer choices, such as soft drinks?
Do your consumer research homework, during both the concept phase and after the ribbon-cutting. Ask the consumers to whom this new attraction is targeted if the concept will make them likely to visit and spend money. How much more likely? Are your target customers unhappy with the current beverage choices available to them? How much of a dissatisfaction with the status quo (my definition of marketing) do you need to create in the marketplace, and is it enough to drive new business?
(Always remember, too, that consumers don’t always do what they say they’re going to do. That’s why it’s best to take a very conservative approach in projecting the results of your market research.)
Once your lemonade stand is open, do follow-up research with your customers. Did they plan a special trip to see you, or were they just passing through the neighborhood? Would they have come to your theme park anyway, even without the addition of your destination beverage experience? Were they motivated by your advertising (and are truly incremental guests)? Did they stay longer, spend more money, and enjoy themselves more because you made lemonade out of lemons? Is there the possibility of future new products?
Know the true cost of doing business. Accounting for the cost of goods to build and supply your stand is relatively easy. But remember that marketing is a real (and necessary) cost, too. “Build it and they will come” may be a convincing argument for Mom, but it doesn’t impress your financiers. And those flyers posted around the neighborhood don’t come for free.
How much should you spend on marketing? Start by finding out how much money your competition spends, or what the budget is for similar kinds of attractions. A good metric for making informed comparisons is advertising as a percent of total revenue. If it’s not practical to get the information from competitors or colleagues, industry averages can often be obtained from trade groups, or through Advertising Age’s annual survey of ad to sales ratios. (Amusement parks are one of the industry categories reported, for instance.) Be prepared, too, to account for inflation in future years – the cost of advertising in particular never stagnates.
Identifying the return on those advertising dollars is essential. How much total revenue will your incremental customers generate? Will it be enough to generate a return that not only pays back the advertising dollars but also generates a profit consistent with the organization’s financial objectives? After all, the goal should be more than simply getting your money’s worth—it should be about making a profit that can be invested in making the guest’s beverage experience even better in the future.
Identify the incremental profit you’ll produce, not just added revenue. Per capita revenue – the amount of money generated by visitor spending–is a familiar metric. But incremental per capita profit—the amount of net income generated by every customer that otherwise wouldn’t have visited–is a more valuable measure of our success. Will your lemonade stand succeed in attracting truly new customers? Will it cannibalize business from the park’s smoothie concession? And will that incremental revenue drop straight to the bottom line, or are there hidden costs to be accounted for, such as more parking or the sudden, mysterious need for more restrooms?
Increased value should usually mean increased price. Price sends a strong signal to the marketplace about how much value you place on your product. If your customer tells you their experience of visiting the local theme park really is improved by the addition of the world’s largest lemonade stand, or by another significant enhancement, shouldn’t the price reflect that perceived increase in value?
After all, the goal should be more than simply getting your money’s worth – it should be about making a profit that can be invested in making the guest’s beverage experience even better in the future.
Account for other positive financial impacts. All those baristas you’ve hired to peddle sugar water will create their impact upon the local economy in spending and taxes. Those lemonade groupies rushing from all over the world to see you will need places to sleep in your city, too. Quantifying your total economic impact means you’ll make new friends in the community or among potential funding sources.
Following the guidelines above won’t guarantee success for your grown-up venture, but it will give you a much better understanding of your chances for success, and your odds of getting “Mom” to go along with your scheme.
Measuring Attraction Industry Performance in England
In most places, there is little official national data produced that gives an indication of how the attractions sector is performing throughout the year. In January 2006, VisitBritain commissioned an industry-wide database, called the England Attractions Monitor. This online panel provides the attractions industry with rapid feedback on current trends in visits to attractions in England.
In the first quarter of 2007, 551 attractions provided information regarding visitation trends, attendance projections, and other key performance information.
Conservation Psychology
Carol D. Saunders, PhD
Director of Conservation Psychology
Chicago Zoological Society
For organizations that want to measure their progress towards missions related to conservation, the new field of Conservation Psychology (CP) offers some helpful tools. Usually when we think about environmental research we think of the natural sciences. Yet, because humans are the source of most of our environmental challenges as well as the hope for solutions, the role of the social sciences has grown in importance. Psychology is one of the fields that helps put people in the conservation picture, and it provides a wealth of approaches for understanding the way people think, feel and act.
Most psychologists focus on people-people issues, but conservation psychology (CP) is the scientific study of the reciprocal relationships between humans and the rest of nature. Like conservation biology, conservation psychology has a strong mission focus related to biodiversity conservation and environmental sustainability.
Most of the research questions address the following outcome areas:
- How humans care about/value/respect nature, with the goal of creating harmonious relationships and an environmental ethic.
- How humans behave towards nature, with the goal of creating durable individual and collective behavior change.
Research topics in conservation psychology include studies of:
- human-animal relationships
- empathy
- how caring about the natural world develops
- the formation of an environmental identity
- relationships between a connection with nature and environmental sustainability
- significant life experiences related to environmental concern
- development of a sense of place
- moral reasoning in relation to the natural environment
- risk perception
- conflict resolution
- the significance of direct nature experiences
- environmental attitudes, beliefs, values, and behaviors
Interest in Conservation Psychology has been building ever since the Chicago Zoological Society hosted the first CP conference in 2002. This resulted in a special issue of Human Ecology Review (2003) that is entirely devoted to CP and a website that identifies many of the key resources and researchers in the field. Another tool that has emerged is a manual of resources for teaching topics related to CP.
One application of conservation psychology can be seen at the Hamill Family Play Zoo at Brookfield Zoo. In 1997, the Chicago Zoological Society invited social scientists and other experts to share what was known from the research literature about how children develop caring attitudes toward nature. The principles that emerged were directly applied to the design of the exhibit. For example, Louise Chawla talked about her interviews with adults who were committed to protecting the environment. The majority identified “the experience of natural areas and the influence of family members who directed attention to the value of the environment” as the main reasons why they cared about nature. Such findings were the basis for including specially trained Play Partners in the exhibit to serve as models for how parents can encourage their children to enjoy playing in nature. Research also suggested that to develop caring for nature, children need to have the chance to practice caring behaviors. So the Play Zoo gives them plenty of opportunities to do so, whether by grooming a dog or misting a garden plant. An additional eleven research principles were applied.
Not only did research guide the development of the Hamill Family Play Zoo, conservation psychology principles aided the design of the evaluation tools that monitor whether the exhibit is achieving its goals. It is now an award-winning model for zoos, aquariums, botanical gardens and other learning environments that focus on nature and child development. The exhibit content and philosophy has been emulated, as well as the joint researcher-practitioner process by which the exhibit was created. Furthermore, there is growing interest in this topic, thanks to Richard Louv’s book Last Child in the Woods which has popularized the need to help children reconnect with nature given the many factors that are keeping kids inside.
An increasing number of conservation psychology sessions are appearing at conferences and more collaborative projects are emerging between universities and conservation organizations. In addition, innovative measurement tools are being created to measure concepts like “connectedness to nature” and intentions to engage in conservation behaviors. Such instruments are helping researchers and practitioners evaluate the impact of programs on desired conservation outcomes.
