Michael Bahr: Is Your Event Model Broken?
By Michael Bahr, managing partner of Desert Sky Games and Comics
Focusing on organized play (OP) is a natural step for a modern game retailer to take. The brutal efficiency of online distribution has greatly disrupted the “traditional” retail model, where manufacturers, distributors, and retailers all direct products toward the customer.
Online distribution doesn’t serve all needs—try buying a set of tires on an auction site and see how that goes for you—but it does lead to the commoditization of pure goods. Which means the open opportunities for us come from goods that are improved by the services, interactions, and experiences we can deliver.
Creating those experiences with OP is our best tool. But unless you're careful to make sure OP is serving your business, you could find yourself with thinning shelves and nothing to show for it.
To make OP serve your business, it needs two things:
1. To deliver a sensory and emotional experience to the customer
2. A sustainable economic model
The first part tends to gets all the attention, but without the second, all that effort at creating an engaging experience will go for naught.
There are a lot of adjustments you can consider to guarantee sustainability. There's prizing, both in volume and dispersal. There's tournament structure. Or you may create some structural advantage, like a luxury game room that's so awesome players will pay just to be there. A few stores have managed that.
But no matter what adjustment you make, you cannot survive without revenue. In-store play either is revenue (like in the luxury game room example) or drives revenue, or it's not serving the business.
So how do you know which dials to turn?
Here's one simple exercise you can do that I strongly believe will improve your store’s profitability:
Find your revenue conduit and make sure funds are flowing through it.
You know what your bills are. You know what your payroll is, your fixed expenses, and you know what kind of cost-of-goods you’ve been paying.
Now map out your OP mechanism from beginning to end so you know what’s happening with the money, and that enough of it is reaching your bottom line.
|Per Player||Number of Players||Total|
|Sales Tax Out|
|Credit Card Processing|
As you fill it out and find the pain points, here are some red flags to watch out for:
1. Do you run break-even or loss OP to move deeply discounted merchandise? Discounts may boost sales, but if your marketing spend goes into that, you need to recoup the difference somewhere.
2. Are events going too long or too late? The biggest overlooked cost in OP is labor. The present industry best practice is to run fixed rounds for events toward the bottom of the competitive curve, like FNM and Prerelease.
3. Do prizes focus on top finishers? Experienced players tend to already have large collections. Flatten your prize structure to draw different player types and you may find that the revenue conduit more reliably flows to your bottom line.
Adjusting your OP model can be daunting. You might be wary of scaring off existing players. But if OP isn’t driving revenue, does it matter? Anything you do to repair a broken model is an improvement over losing money.
Now get that conduit clear and flowing so you can get back to the fun side of OP, making it an immersive and exciting sensory and emotional experience!
Michael is the managing partner of Desert Sky Games and Comics, with two store locations near Phoenix. He served four years as a Level 3 judge, holds a law degree from Arizona State, and spent seven years in government health care administration.