Everywhere you look, there’s a new center popping up in every market. Savvy new owners and businesses in expansion mode are probably evaluating your market as we speak.
If you’ve noticed any downward trends in your sales after new competitors have opened their centers, it’s a sign of a decline in your market share. Market saturation occurs when the demand for location-based entertainment decreases due to higher competition.
Before we dive into how to gain a competitive advantage, let’s look at what a competitive advantage is and why you need it. A competitive advantage is simply a factor that distinguishes your business from others and makes customers more likely to choose your facility over the competition.
To illustrate this concept, let’s use Seth Godin’s brilliant analogy of the purple cow.
Picture a drive through the countryside with farms and a bunch of cows. Nobody is going to stop their car and say, “Look, there’s a cow!” Now, if you saw a purple cow, you’ll likely get people to pull over.
If you are just blending in and offering something that everyone else is offering, you aren’t going to turn many heads. In a saturated market, you need to stand out. That’s why you need to create a competitive advantage.
Here are a few strategies to give you an edge over your competitors:
Get a new attraction or upgrade your existing ones.
Wouldn’t it be nice if you could coast along for the next ten years with the same attractions and continue to grow year after year? Sadly, that’s how many centers end up closing their doors. The goal of adding or upgrading your equipment is to offer something that will raise demand and take market share away from competitors. An example is adding a laser tag arena if nobody else is doing it. If you already offer laser tag, you can stand out by introducing next-generation equipment.
Build Customer Loyalty
One of the most effective ways to gain a competitive advantage is to obsess over your customers—instead of the competition. Delivering an optimal customer experience is what helps you build loyalty. As we shared at the recent Birthday University session in Orlando, you have to walk a mile in your customers’ shoes to improve the quality of interactions.
Remember, customer loyalty doesn’t begin after they become a customer. It starts at the first touchpoint and every interaction with your company. In addition to copying what your competitors are doing to delight customers, study what the most beloved brands are doing well.
Offer Value-Added Services.
As Warren Buffett wisely said, “Price is what you pay. Value is what you get.” While undercutting competitors or offering killer promotional offers may give you a short term boost in sales, racing to the bottom is one of the surest ways to go out of business.
Instead, think about ways you can add more value to your customers. To justify the price of admission, Disney offers tons of value-added services such as an online portal to plan your itinerary, baby care centers, parades, and fireworks shows.
It’s Your Turn
The silver lining in the face of market saturation is that successful businesses will continually improve the customer experience and raise the bar in the quality of attractions. By focusing on your customers, you’ll think of new attractions, get better laser tag equipment, and offer more value. Instead of copying promotional offers, try emulating what competitors are doing to build loyalty.